Pin bars illustrate a period where the movement of price in a particular direction has met with so much opposition that it reverses within the time of that period. In certain cases this is an indication that the move in the opposite direction will be continued and can be traded with the expectation of profit.
In order to assist in his thought experiments, the Philosopher Plato devised the idea that for everything that existed on Earth which, from simple observation, was seen to be far from perfect, there was in Heaven a perfect model or prototype.
We have moved on from Plato and the ancients, and we
understand that to get knowledge it is necessary to go much further than simple
observation. We must carefully gather data and we must analyse it objectively.
However, Plato’s idea of a perfect model has some
value, because we can at least describe what a perfect trade trigger, for
example, might look like, use this to evaluate how far away from perfection the
ones that we find in reality are and use all this knowledge in turn as a
measure of how valid or useful each one is.
The video above describes a perfect pin bar.
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