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Inside Bar

Overview

  • An inside bar is a candlestick pattern where the current bar's high and low are completely contained within the previous bar's high and low.
  • It indicates a period of consolidation and indecision in the market, often preceding a breakout in either direction.
  • it's basically volatility contraction on smaller time frame

How to Trade Inside Bar

  • Identify an inside bar pattern on the chart, where the current bar is completely contained within the previous bar.
  • Wait for a breakout from the inside bar pattern, which can occur in either direction (upward or downward).
  • If the price breaks above the high of the inside bar, it may signal a bullish breakout
  • If the price breaks below the low of the inside bar, it may signal a bearish breakout
  • Consider using additional technical indicators or chart patterns to confirm the breakout and increase the probability of a successful trade.
  • As shown in below image there's no correct way to enter
  • all entry points are trade off between capturing a move with a big size vs getting shaken out, or even entring in a move that was never there

Inside Bar Example