The first thing you need to learn about is a ‘ pin bar ’ pin bars form on all time frames where price tries to push up or down through a resistance level but fails creating a price bar which looks like a pin see images below.
This price bar is very, very accurate at pointing out reversals on the larger time frames. In fact I know of many people that simply trade these and nothing else.
The pin of the bar must be at least twice the length of the head (part between the open and close).The longer the pin the stronger the signal.
The close of the pin bar must be inside the high or low of the previous bar or very close.
The first pin bar in the picture below was perfect the second only just passed as a pin bar due to the fact that is close was only just even with the low of the previous bar.