Pin bar: reading rejection
A single candle that shows one side of the market being rejected, and how to use it to time an Elliott Wave entry.
Anatomy of a pin bar
A pin bar has a small body at one end of the candle and a long wick, at least twice the body, on the other. The wick shows where price was pushed and then rejected within the same candle.
Bullish and bearish
A bullish pin bar has a long lower wick and forms after a decline: sellers pushed lower and lost. A bearish pin bar has a long upper wick and forms after a rally: buyers were rejected.
Where it matters
A pin bar in the middle of nowhere means little. One that forms at the end of a wave 2 or wave 4, inside the Fibonacci zone of the count, is a strong timing signal. At Eightwaves we use it on M15 and M5 to confirm that the correction has ended.
Entry and stop
Enter when price breaks the high of a bullish pin bar, or the low of a bearish one. Place the stop just beyond the tip of the wick. If the wick tip also sits beyond the count's invalidation level, both signals agree on the same risk.
Key takeaways
- Small body, long wick at least 2× the body
- Location matters more than the candle itself
- Best at the end of wave 2 or 4 in the Fibonacci zone
- Stop beyond the wick tip
Analysis and education only, not a recommendation to trade. Trading forex, commodities and crypto carries a high risk of loss.