Trading term

What is Pin bar?

A pin bar is a candle with a long tail and a small body at the opposite end, showing price pushed into a level and was firmly rejected. The tail is typically at least two-thirds of the candle's total range.

The name is short for Pinocchio bar — the candle 'lied' about where price was going. Sellers drove price well below the open, then buyers rejected it so completely that the candle closed back near its high. What is left on the chart is a long lower tail with a small body at the top, and it means the move into that area found no acceptance.

Direction comes from where the tail points. A tail below the body is bullish — the low was rejected. A tail above the body is bearish. The pattern is the same idea as a hammer or a shooting star; pin bar is the price-action community's term for the whole family, and it's usually defined by proportion rather than by exact open/close rules: the tail should dominate the candle, and the body should sit at the far end.

Where it appears matters far more than the shape. A pin bar rejecting a support level, a trendline or a prior swing is meaningful. The same candle in the middle of a range is noise, and there are a great many of those.

A tail where price was refused
IN CONTEXTA downtrend, then one candle rejects the low — and the trend turns.ZOOMED INsmall body, near the toplong tail — many× the bodythe rejected lowbullish pin barThe long tail is the signal: price went there, and was refused.

Sellers drove price to $51.20 and buyers took it all back within the period, leaving a tail roughly three times the body. The downtrend turns from there.

For example

A stock falls for five sessions and the sixth candle opens at $55.40, drops to $51.20, then closes at $55.90 — near the top of its range. The tail runs about $4.20 against a body of roughly $0.50, so buyers erased the entire day's decline, and price rallies over the following week.

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Why it matters to you

A pin bar hands you an unusually tight risk definition. The tail's extreme is the exact price at which the rejection idea is wrong, so a stop just beyond it is both logical and small — often a fraction of the distance to a sensible target. That geometry is why the pattern remains a staple of price-action trading even though it's centuries old.

⚠ Location is the signal, not the shape

Charts are littered with pin bars, and most mean nothing. Trading every one is a reliable way to lose money slowly. The pattern only carries information when the tail rejects something that already mattered — a tested support level, a trendline, the edge of a range. If you cannot name what the tail rejected, there is no setup.

Frequently asked questions

What is a pin bar in trading?

It's a candle with a long tail and a small body at the opposite end, showing price moved into an area and was rejected. A tail below the body is bullish; a tail above it is bearish.

What's the difference between a pin bar and a hammer?

Very little — a hammer is a bullish pin bar by another name. 'Pin bar' comes from the price-action tradition and is defined loosely by proportion, while hammer, shooting star and hanging man are the classical Japanese names for specific versions of the same shape.

How do you trade a pin bar?

Most traders wait for price to move beyond the pin bar's body in the direction the tail points, and place a stop just past the tail's extreme. Because the tail defines exactly where the idea fails, the risk per share is small and easy to size around.

How reliable is a pin bar?

On its own, not very — they're common and most lead nowhere. Reliability comes almost entirely from context: a pin bar rejecting a level that has already held, in the direction of the larger trend, is a far better signal than an identical candle in the middle of a range.

Related terms

Anchored VWAPAnchored VWAP is a volume-weighted average price that starts from one candle you choose, rather than resetting at the start of each session. You anchor it to a meaningful event — an earnings gap, a major low, a breakout — and it tracks the average price everyone has paid since.Ascending triangleAn ascending triangle is a bullish continuation pattern: a flat horizontal resistance line on top, with a rising trendline of higher lows beneath it. As the higher lows squeeze price against the ceiling, pressure builds — and it usually resolves with a breakout up through the resistance.ATR (Average True Range)ATR (Average True Range) measures how much a security typically moves in a period — its volatility — as an average of recent trading ranges. It doesn't say which direction price is heading, only how far it tends to travel, which makes it a core tool for stop-losses and position size.Bearish engulfingA bearish engulfing is a two-candle reversal pattern in which an up candle is followed by a down candle whose body completely covers it. The second candle opens above the previous close and closes below the previous open.
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