Sunday evening 15 pip gap up open followed by initial mostly sideways action. The highlighted pinbar doesn’t mean anything to me until the following fade downward, slow reverse & impulsive break of the Tenkan.
At that point I see the top of the pinbar as a likely magnet & resistance, and I look for entries close to the Tenkan (equilibrium) if it appears to be support. The white arrows mark my entry points for binaries that expire at the close of the following candle. I considered entries in the highlighted area 2 & 3 candles later but felt that there wasn’t enough room to the top of the pinbar.
The red, blue & green colors come from an indicator called Elder Impulse. Consider the following chart that illustrates the area of entries 2, 3 & 4 on a one-minute chart, as opposed to the five-minute chart I was trading.
Compare the two highlighted candles – the first is red & the second green even though they are roughly the same size & at the same price level & are both up candles. It’s pretty clear from a glance that the red candle is a possible pullback to roughly the midpoint of a move & that the green candle is a likely breakout, but the elder indicator doesn’t know that and still gets it right. It compares a moving average & a MACD Histogram for the current candle to those of the prior candle. If both are bigger or smaller the candle is green or red, else it’s blue. Moving averages & MACD Histograms are great indicators. This indicator combines them both in an intuitive & clear manner.