Pin bar candlesticks are considered one of the most practical patterns in technical analysis. Put simply, this pattern features a single candlestick with a long shadow, either above or below. What does this signify? The price has been clearly rejected at a key level.

Specifically, a pin bar consists of two parts—a very small real body and a prominent long shadow. A small body indicates that buying and selling forces are roughly balanced, but the long shadow shows that someone aggressively sold or bought at a certain price level. An upward long shadow indicates resistance preventing further gains, while a downward long shadow suggests support holding back further declines.

How to determine if a pin bar is genuine? There are two strict criteria: first, the real body should be less than 20% of the entire candlestick length; second, the shadow should occupy more than 80%. Only when both conditions are met can it be considered a standard pin bar pattern.

The beauty of this pattern lies in its ability to predict market reversals. But there's a trap—price reversals are not always genuine. Often, large funds intentionally create false signals. Major institutions use this tactic to wipe out retail stop-loss orders and disrupt the formation of new trends. Therefore, traders who can read pin bars often capture more accurate turning points.