Price Action Basics, Pin Bars and Engulfing Candles
Posted: Thu Oct 01, 2026 7:35 pm
Price Action Basics, Pin Bars and Engulfing Candles
Indicators lag. Price action doesn't. Candlesticks show you what buyers and sellers did in real time, and two patterns are worth mastering first.
The pin bar (rejection candle). A candle with a long wick and a small body. A long lower wick means sellers pushed price down but buyers rejected it strongly. A long upper wick shows the reverse.
The engulfing candle. A candle whose body completely covers the previous candle's body. A bullish engulfing after a decline shows buyers overpowering sellers. A bearish engulfing after a rally shows the opposite.
How to use them properly:
1. They matter only at key locations: support, resistance, order blocks, or after a liquidity sweep.
2. Check the trend. A bullish pin bar in a strong downtrend is weaker than one in a pullback within an uptrend.
3. Wait for the candle to close before acting.
4. Place your stop beyond the wick or the engulfing candle's extreme.
5. Target the next logical level.
Warning: a pin bar in the middle of nowhere is just a candle. Context is everything.
Many liquidity sweeps produce pin bars, so combining your SMC knowledge with candlestick reading makes both stronger.
Scroll back through your chart today and mark ten pin bars. See how many occurred at key levels, and what happened next.
Indicators lag. Price action doesn't. Candlesticks show you what buyers and sellers did in real time, and two patterns are worth mastering first.
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The engulfing candle. A candle whose body completely covers the previous candle's body. A bullish engulfing after a decline shows buyers overpowering sellers. A bearish engulfing after a rally shows the opposite.
How to use them properly:
1. They matter only at key locations: support, resistance, order blocks, or after a liquidity sweep.
2. Check the trend. A bullish pin bar in a strong downtrend is weaker than one in a pullback within an uptrend.
3. Wait for the candle to close before acting.
4. Place your stop beyond the wick or the engulfing candle's extreme.
5. Target the next logical level.
Warning: a pin bar in the middle of nowhere is just a candle. Context is everything.
Many liquidity sweeps produce pin bars, so combining your SMC knowledge with candlestick reading makes both stronger.
Scroll back through your chart today and mark ten pin bars. See how many occurred at key levels, and what happened next.