The pin bar method is a very popular binary options trading strategy among traders. One of the main reasons behind the popularity of this binary options trading strategy is the simplicity, which is very easy to understand even by the most novice traders.

What is a Pin Bar?

A pin bar is a price action (PA) bar that at first, goes in one direction, then suddenly go into the opposite direction, creating a long tail looking candlestick or bar pattern in the process. Regardless of the pin shape of the bar, the name “pin bar” actually derived from the fictional character Pinocchio. The pin bar resembles how Pinocchio’s nose use to grow when he was under stress from lying. Pin bars, in reality, do lie about their initial direction, then go the other way.

There are basically two types of pin bars. With a bullish pin bar, the price goes down, then comes up and with a bearish pin bar, the price goes up first, then closes near its opening price.

How to Apply the Pin Bar Method to Trade Binary Options?

Pin bars work best with a trend. Hence, it is strongly advised that binary options traders try to find an established trend and only then look for pin bars to trade. With this strategy, you would be using the pin bar as an entry trigger, which will in turn increase the probability of catching a good trade with minimum downside risk.

While many aggressive binary options traders choose to enter when the pin bar forms or when the daily bar closes, other experts highly recommend that you should wait for the price to break higher (for bullish) or lower (for bearish) of the pin bar.

While trading the pin bar against the trend may offer more rewards in traditional trading, trading with the trend will provide you with a higher win rate in binary options. This is because, with binary options trading, you are not only predicting the direction of the price, but the price needs to close “in-the-money” As well. Hence, in the beginning stage of trading binary options, you should focus on trading pin bars with the trend, as will increase your odds of winning.

Once you have identified a prevailing trend in the market, in order to properly apply the pin bar method, you need to wait for the price to break above the high of a bullish pin bar and low of a bearish pin bar. For example, in the USD/CAD daily chart above, we can easily identify five bullish pin bars in an uptrend. Here, the red lines above the pin bars should be your entry price.

For a long-term success traders should well know a lot in the market. Therefore, it is to be thrown importantly always a look at the market development and to act only with base values with which one also knows a lot. Who knows a lot, for example, well about shares, should also choose mainly shares as a base value. Besides, traders should use the extensive educational offers of the brokers absolutely.

As by all finance instruments traders to themselves also for binary options had to do a good strategy "zurechtlegen". There is for this a rather big number of possible strategies. Whether now the technical strategy or the Martingale strategy is possible, every trader must decide himself this. Here it is advisable to orientate itself by the experiences of other traders. Also here is valid, with a free demo account traders can test the complete choice in commercial strategies extensively. The demo accounts which are not limited with regard to her useful life are especially recommendable. Thus also experienced traders have the possibility to test new strategies in the approach for her practise suitability.

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