Next graph will show why we did not trade the daily pin bar that formed last week. That pin bar on the daily chart was actually a hanging man candlestick.
For those of you who don't know what a hanging man is, it's basically a pin bar that forms at a swing high or low. The difference between this type of pin bar and the pin bars we want to trade is that the hanging man is inverted. It also typically occurs at support or resistance.
The hanging man doesn't mean the bulls have definitely lost control of a rally, therefore we don't use it as a sell signal. Instead we use it as an early warning sign that the rally may be coming to an end.
See below Gold daily chart of the hanging man: (Also note the three inside bars on the daily chart) See how to trade our Inside Bar Strategy
For those of you who don't know what a hanging man is, it's basically a pin bar that forms at a swing high or low. The difference between this type of pin bar and the pin bars we want to trade is that the hanging man is inverted. It also typically occurs at support or resistance.
The hanging man doesn't mean the bulls have definitely lost control of a rally, therefore we don't use it as a sell signal. Instead we use it as an early warning sign that the rally may be coming to an end.
See below Gold daily chart of the hanging man: (Also note the three inside bars on the daily chart) See how to trade our Inside Bar Strategy