I'm not exactly sure what it had to drop. The way you even draw your range seems a bit random to me, too hindsight. Here is what I propose. If I use my yellow lines, you can maybe start to see a range forming if we use the highs and lows of the bars I've picked (and even that is subjective. But that one pin bar is very much a failed breakout (or breakdown in this case). Its only 2 bars later, on that first big red bar, what we see the rally is failing. We can contrast this with the whole range of a day from the open. One big range, and we also have initially a FBO on the first thrust up after FOMC. We see price went back into the range, and even twice, before it continued higher. Now in the blue case, it didn't go back down to the low of the range, and in the yellow case, same thing, price only went back into the range but didn't hit the top of the range, or maybe it even did if you used the body and not the wick. But I think my point still stands that there was no way to know which way it would break until it did. The first attempt to break down was met with lots of buying at 5100, so who is to say it will try again and be successful on the second try??
I agree that you can't just go long on a pin bar that has the head at the top, but what you can at least see is that its a V reversal. This market is full of V reversals, and these represent strong buying that completely turns around all the selling. As for whether the buying continues or not is unknown, but there can be no doubt that the buying at 5100 was strong, which of course happens at round numbers. If we are going to just play support and resistance, then clearly at support, we will see buying, and some of these will produce bars that look a certain way. Of course if you change up the time frame, then that bar will look different, so each trader needs to decide what they need to see before jumping on board a trade. But I was just trying to figure out why schizo said it was an easy sell. After such strong buying post FOMC with Powell holding on rates, but saying there likely will not be a hike, and scaling back QT quite strongly, it makes sense for the market to keep rallying, and that area of congestion could have just been consolidation before another move higher. I see no reason why that price action said a drop was guaranteed.
Ones a Hammer. ones a Hanging Man I'da thought - Bullish and Bearish. But, I'm no expert. Maybe The Great @Overnight can adjudicate.
There was some crazy range chop inside that first blue pin bar, at that moment, it felt like a BO failure and failure rinse and repeat. Can't complaint with the second pin bar and rest of the action, I saw it as a lower low followed by lower high.
So was it a false breakout? No it wasn't. Is it a false breakout this time? I don't think so. I'm gonna leave it at that.
But the question is, where is the short entry? If you wait for the range to break, its a risky time to short because it can always go back into the range, which both of my examples show on the first breakout attempt. And if its still in the range, sometimes you're just guessing about which way it will break. Since you said it had to drop, I'm just trying to figure out at what point you say this. Where is the short entry???
I won't claim it was an easy sell, but I did short that area and made a good profit. From my point of view, the market rallied hard post FOMC, but clearly ran out of momentum, so I expected at least a decent retrace back to mid range. I didn't use "pin bars" to observe that. The point I was trying to make earlier was context. For example, a buy signal coming out of a bottom is more likely to be valid than the same buy signal coming after the market already rallied 80 points.