Double high/Low - I need your help!

Trying to get a grasp of this formation/set-up...

Does the second bar has to be longer (than the first bar) in the direction of where you want to trade (in the direction with the close of the second bar)?

Or can the bars be of the same high/low, and still be considered a good set-up? Perhaps with the close of the second bar in the extreme of the direction where you want to trade?

I know my questions are highly subjective, but please give your input
and opinion. I know you should always look for confluence. Im just trying to set some rules to remind me of in the heat of trading

Thanks for your time!

Ive attached a picture for you looks like you dont clearly understand what this setup is.. all "price action" is wave movement that evaluates psychology.. this is why how the bars form is more important than the bars forming.. btw forgive my drawing skills

oh yeah and depending whether its located at a swing high or low matters to which way it breaks.

Personally i always wait for the second bar to go past the previous bar before entering

One thing I sometimes do is look at the two bars as one - i.e. take the ohlc of the two bars or candles and draw one. This will usually give you a pin bar or shooting star/hammer whatever you want to call it.

You should know that these are traded off a swing high/low but in the direction of the main trend, a la J16 thread. It helps if they also come off support or resistance of some kind, the nearer the better. Also that you are not trading into close by s/r.

I tried to condense a lot of information into a few words here. Don't know if it worked!

Spot on, the 2 bars depending on TFs and where they stand could form a pin bar on a higher TF, which if at an area of S/R is a great reversal potential.

Depending on the traders scope and the TFs they are looking at, whether they are short or long term traders, then there can be a great chance to net some profit on the break of the pin. If it is a swing back into the major trend and of a solid level of S/R then the potential for green pips is stronger.

Razor

Does the second bar has to be longer (than the first bar) in the direction of where you want to trade (in the direction with the close of the second bar)?

If the second bar has length then there could be greater conviction that the area has held firm and the rejection confirmed. It is dependant on other factors too but as smikester mentioned you can join them together to get a pin bar. Pins are a very strong reversal signal at areas of S/R. The higher the timeframe they appear on the more convincing they are. So a pin on a weekly to me holds more than say a 15m plus the window of opportunity can often flow down so if we have come from a solid ceiling and theres a pin bar on the weekly then the window for a potential downside is not only stronger but it may last longer.

In the above (and this will answer the second part of your question) you want to trade the break of the pin in the direction it is heading. So in the case of the 2 bars being of equal length and body or the second being longer they both represent the same thing and that is market rejection at a major point and a potential to swing. You trade the break at a number of pips below or above (depending on whether you are long or short based on the formation). The number of pips would be relevant to the risk involved and the timeframe and by only trading that break you give yourself room for error.

Hope these posts have helped

Razor

You guys have been terrific. Thanks for such elaborate responses. I really appreciate it.