Page 75 - CMA Journal (July-August 2025)

Articles Section
Articles Section
Stock Market Pin Bar Strategy:

Using Candlesticks and Moving Averages

Introduction Pin Bar Trading
People who are attached to the stock market/forex/ Strategy
crypto are very much familiar with candlestick. In the above example there
Candlestick helps in understanding market situations is a red candle bar which
efficiently. One advantage of candlestick over other represents the bearish
methods is its visual representation of the situation. trend and it is shown in red

There are two types of indicators in the market: one is color, and when a pin bar is
leading and the other is lagging. 99% of the indicators formed, we can see a
used in analysis are lagging, which means that they give change in trend and also,
an indication when the incident happens, leading to we are entering the market Rizwan Ahmad Khan, FCMA
wrong decisions and loss to the trader. In the case of near support and Expert in Financial Astrology
candlestick, it happens to be both a leading and lagging resistance. Support and and Stock Market
indicator depending on how it is used. In this, potential resistance are the levels
price movement is leading, and visual representation of where we can anticipate that the market will stop and
historical price action is lagging. change the trend; like in the case of resistance, if the
market is in a bullish trend, then when price comes to
There are many kinds of candles in candlestick and every that level it will hopefully bounce down.
candle has a different meaning for the presentation.
Today we discuss only one form of candle to enhance
your trading potential.
First, we understand the formation of Pin Bar candle.
• The fat part of the candle is known as the real body.
• The two thin lines are known as wicks or tails.
• The main difference between bullish and bearish
candles is in the prices they open and close at; the
high and low represent the extremes of the period.
Similarly, for the bearish trend, when price comes to the
support level, it will hopefully stop there and bounce up.
And if the trend is very strong, then we consider the
market in a bearish trend. How the resistance and
support line is prepared—that is another topic, and I will
discuss in detail different techniques on how the support
and resistance levels are determined. Candle forming
near these levels is very much confirmed and gives very
good results as shown in the below figure.
When Not to Use Candlesticks
Candlestick analysis should be avoided in the following
situations:
1) When the market is sideways.
2) When there is no volume in the market.
3) When there is a continuous inconsistent pattern.

4) When not aligning with any news that is in float.
5) If you are constantly updated about the market.
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