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2.
3. Exhaustion Bar
With its long tail, a pin bar breaks a support or resistance momentarily to trick traders into entering the
wrong direction. These traders are trapped, and there is always money to be made when you find
trapped traders.
How do we trade it?
1. Buy above a bullish pin bar that is rejected from support level
2. Sell below a bearish pin bar that is rejected from a resistance level
5. Two-Bar Reversal
6. Three-Bar Reversal
1. A bearish bar
2. A bar has a lower high and lower low
3. A bullish bar with a higher low and closes above the high of the second bar
Accordingly, the bearish pattern is made up of:
1. A bullish bar
2. A bar has a higher high and higher low
3. A bearish bar with a lower high and closes below the low of the second bar
What does it mean?
A three-bar reversal pattern shows a turning point. Compared to the other reversal patterns, the three-bar
reversal pattern is the most conservative one as it extends over three bars, using the third bar to confirm
that the market has changed its direction.
How do we trade it?
1. Buy above the last bar of the bullish pattern
2. Sell below the last bar of the bearish pattern
7. Three-Bar Pullback
8. Inside Bar
1. Place bracket orders around it to trade its break-out in either direction. (A buy stop order above
its high, and a sell stop order below its low. Once one order is triggered, cancel the other.)
2. Place only one order (buy or sell) according to the market trend.
3. Wait for a break-out of the inside bar and trade its failure.
9. Outside Bar
10. NR7
Whats Next?
Hybrid Patterns
These ten patterns are not mutually exclusive. In fact, there are many combinations that produces
effective bar patterns.