#529: What’s the Difference Between a Pin Bar and a Hanging Man?

What’s the Difference Between a Pin Bar and a Hanging Man?  Podcast: Signup For my Forex Masterclass Find out more about Blueberry Markets – Click Here Find out more about my Online Video Forex Course Book a Call with Andrew or one of his team now #529: What’s the Difference Between a Pin Bar and a Hanging Man? In this video: 00:29 – Pin bars and a Hanging Man candle. 00:52 – I trade neither candle. 01:12 – How to use a Pin bar or Hanging Man candle.  01:52 – How the Pin Bar and Hanging Man are formed. 04:35 – Find out more about how we trade and how we can help you. 04:55 – Book a call and have a chat with us. 05:06 – Trade through Blueberry Markets. What's the difference between a pin bar and the hanging man candle formation? And how can they help you to increase your performance as a trader? Let's get into that and more. Right now. Hey traders. Andrew Mitchem here at the Forex Trading Coach with video and podcast number 529. Pin bars and a Hanging Man candle. Now I want to talk about two candle patterns that often cause confusion for people. And one is a pin bar and the other is a hanging man. And for a lot of people, they kind of look the same and they don't quite understand how to use them and what's actually happening behind the scenes in the market conditions to create those patterns within your charts. I trade neither candle. It's important to note also that I do not trade a pin bar or hanging man purely as a candle pattern. However, they can be really influential in my trading because they give me an early warning system or give me a clue as to a potential change of direction. How to use a Pin bar or Hanging Man candle So if I'm not in a trade, they can give me the clue that. “Hey, look, the market may be just stalling here, here, or potentially changing direction.” I still need confirmation after the pin bar or the hanging man. The other scenario is if I'm already in a trade and I see a pin bar or hanging man pattern show on the charts, but I haven't quite reached my profit target yet. So what that is telling me is, “Hey, look, this could be a really good opportunity now to potentially really look at closing some of the trade or X thing and total the entire position and early because we could now be getting a change in direction against where we're looking for the trade to move.” So what is a pin bar? What is a hanging man pattern? Well, basically to me they both are Indecision Candles. They tell me there's a lot of movemant in the market, but the market's not quite decided which way it's heading. So let's use an uptrend as an example. If the market's currently in a really good, strong uptrend and we see a pin bar show, a pin bar will be a candle with a small body but a long upper wick. And what that means is that the uptrend has continued and it's gone really strongly upwards. And at some stage during that candles formation, that would have been a good, strong bullish candle. However, before the candle is closed, the price has come all the way back down to either just above its open or even potentially just below. It's opened, it's open price and it's formed that small body, but with the long upper wick in an uptrend. So that tells me that the price is exhausted. It may have hit a certain level and now the sellers are starting to push the market down. I still need a confirmation candle to come next. So next outside bar and engulfing bar, probably an engulfing bar in that scenario. To suggest that, yes, the downtrend is about to then be strong enough to justify a trade. If we use that same bullish uptrend, but instead of the pin bar, we get a hanging band pattern that means that we get a small body near the top of the candle, yet along with lower wick. What that tells me is that the price has moved up and then when the hanging man pattern is formed during that candle formation, the sellers really took over and pushed the price down. However,

Episode Transcript

(00:00):
What's the difference between a pinba andthe hanging man candle formation, and how
can they help you to increase yourperformance as a forest trader. Let's get
into that more right now, Heytraders. Andrew Mitcham here at the Forest

(00:24):
Trading Coach with video and podcast numberfive hundred and twenty nine. Now,
I want to talk about two candlepatterns that often cause confusion for people.
And one is a pinbar and theother's a hanging man, And for a
lot of people they kind of lookthe same and they don't quite understand how
they use them and what's actually happeningbehind the scenes in the market conditions to

(00:48):
create those patterns within your charts.It's important to note also that I do
not trade a pinbar or a hangingman purely as a candle pattern. However,
they can be really influential in mytrading because they give me an early
warning system. Well, I giveme a clue as to a potential change

(01:08):
of direction. So if I'm notin a trade, they can give me
the clue that, hey, look, the market may be just stalling hill
here or potentially changing direction. Istill need confirmation. After the pinbar or
the hanging man. The other scenariois if I'm already in a trade and
I see a pin bar or aHangingman pattern show on the chart, but

(01:30):
I haven't quite reached my profit targetyet. So what that's telling me is,
hey, look, this could bea really good opportunity now to potentially
look at closing some of the tradeor exiting in total the entire position early,
because we could now be getting achange in direction against where we're looking
for the trade to move. Sowhat is a pinba what is a Hangingman

(01:53):
pattern? Well, basically, tome, they both are in decision candles.
They tell me there's a lot ofmovement in the market, but the
market's not quite decided which way it'sheading. So let's use an up trend
as an example. If the market'scurrently in a really good strong uptrend and
we see a pinbar show, apinbar will be a candle with a small

(02:16):
body but a long upper wick.Now what that means is that the uptrend
has continued and it's gone really stronglyupwards, and at some stage during that
candle's formation that would have been agood, strong bullish candle. However,
before the candles closed, the pricehas come all the way back down to

(02:37):
either just above its open or evenpotentially just below it's opened it's open price,
and it's formed that small body butwith a long upper wick in an
up trend. So that tells methat the price is exhausted. It may
have hit a certain level, andnow the sellers are starting to push the

(02:58):
market down. I still need aconfirmation candle to come next, so in
an outside bar and a golfing bar, probably in the golfing bar in that
scenario to suggest that yes, thedown trend is about to then be strong
enough to justify a trade. Ifwe use that same bullish uptrend, but
instead of the pin bar, weget a hanging Man pattern. That means

(03:19):
that we get a small body nearthe top of the candle, yet a
long lower wick. What that tellsme is that the price is moved up.
And then when the Hangingman pattern hasformed during that candle's formation, the
sellers really took over and pushed theprice down. However, by the close
of the candle, the price ofretraced back up again and the buyers were

(03:43):
still pushing it higher. And thatcould be a close higher, it could
be a close lower. Than theopen but in general it's like a small
body of the candle near the higherthe candle and a long lower wick.
So that tells me again there's abit of indecision the sellers and over the
buyers pulled back, but there arecertainly sellers in the market. Again,

(04:04):
I need confirmation with an engulfing candleor an outside candle next to confirm that
the down trend really is in play. So two different ways you can trade
there, both in an uptrend scenario, and both the pinbar and the hanging
man give two different types of ideasof what's happening in the market, but

(04:26):
they give us that early warning thatthe trend may be starting to turn downwards.
So that's how you use them.If you like to find out more
about how we use them in detailand in want context, in what part
of the chart. The other thingswe look at as well, the rand
numbers, the trend min break,all those type of things. Have a

(04:46):
look at the link here below,and I'll put a link to my masterclass
where you can jump on to anhour long session if you like to talk
to us personally about how we tradeand how we can help you up to
so you can call or book acall with one of us as well.
And if you're out there looking fora fantastic broker, I can highly recommend

(05:09):
Blueberry Markets. I'll put a linkto them as well. They offer the
Empty four and the Empty five tradingplatform and they're just a great bunch of
people, incredible customer support and I'vebeen with them for years and years and
hundreds of my clients use them aswell. We always get amazing feedback from
Blueberry Markets, so I hope thathelps. That's today's lesson about Hangman candles,

(05:32):
about the pinbar candles, how youcan use them, Book a call
or jump onto the Masterclass free webinarto find out more about how we use
them and how we can help youto use them to be a profitable trader.
This is Andrew Mitcham at the ForestTrading Coach. I see this time
next week with another video and podcastsby Finet