Hello, how are you?
Here is another question, this time regarding your article “Pin Bars Do Not Show A Rejection Taking Place In The Market”.
You say the wick can mean one of those four things:
Stop losses being hit.
Banks traders placing trades.
Bank traders taking profits.
Bank trades closing trades.
I understand the first 3 scenarios (stop loses being hit is actually stop loses being hunt and then price reverse, right?) but I have problems understanding the last scenario, bank traders closing trades.
How is that different from “bank traders taking profits”? Taking profits means closing trades, and closing trades results in taking a profit (or a loss, but for the bank traders this seems unlikely).
Is not an important question, but the thought that I’m not able to understand bothers me…
Thanks!
Have a great weekend!
Response:
Just to clarify on the pin bar topic…
Imagine a situation where a bank buys 100,000 EUR.
As the market climbs, they decide to sell 20,000 EUR.
This action triggers a bearish pin bar, and it’s actually initiated by profit-taking. Bear in mind, they still have a significant portion of their position open— they’ve only sold 20,000 out of their initial 100,000 EUR.
Here’s where it gets interesting…
If they now decide to sell the remaining 80,000 EUR, the result would also be a bearish pin bar. However, this time it’s created by the banks closing out their trades entirely, not merely taking profits.
But let’s be real here… we can’t truly differentiate whether a pin bar is formed due to banks taking profits or closing their trades.
So, it’s more practical to consider them one and the same.
I hope that clears up any confusion.
PAN.