Pin Bar Recognition and Stop-Order Levels from Bar Geometry

Summary

This document describes a price action indicator that identifies pin bars and marks suggested stop-order entry and stop-loss levels. It treats a pin bar’s long shadow as a signal in the opposite direction, with the author recommending its use on daily-to-monthly charts. Signals are calculated only after a bar is complete.

Recognition depends on configurable filters: minimum bar range, the ratio of full range to body, the long tail’s size relative to the rest of the bar, optional body direction and close location, and whether the bar is an extreme relative to prior bars. The document explains that filters can exclude bars that otherwise look like pin bars, so results depend on parameter choices. It offers no performance study or evidence that the signal is profitable; the suggested levels and timeframe are presented as indicator guidance rather than validated trading results.

Key ideas

• The indicator looks for pin bars and interprets the long shadow as a signal in the opposite direction.
• Signals are generated only from completed bars.
• Configurable shape, close-location, body-direction, and prior-extreme filters determine which bars qualify.
• The indicator provides separate recommended levels for a stop-order entry and a stop loss.
• The document gives no empirical performance evidence, so the signal’s effectiveness is unestablished.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.