Typically, they form after a bullish or bearish trend. With an extremely small body due to the same opening and closing price and long shadows, they’re hard to miss. The pattern begins with a small bearish candlestick, indicating initial selling pressure. The second candlestick, a large bullish one, completely engulfs the first, signaling a shift in market control.

• For this pattern to be valid, each candlestick has to open near the previous candlestick’s close price.
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• The bearish pin bar is the opposite of the bullish pin bar.
• This is followed by a third bullish candlestick that closes even higher, confirming the reversal.