Candlestick patterns
Inside bar pattern
A candle whose high and low stay inside the range of the previous candle (the “mother bar”).
Why it works
It is a pause: the market is compressing. When price breaks out of the mother bar, the move usually continues in that direction.
How to use it
In a trend, trade the break of the mother bar in the trend’s direction. Stop on the other side of the mother bar.
The typical mistake
Trading inside bars in a choppy range, where breakouts in both directions fail.
FAQ
What is Inside bar in trading?
A candle whose high and low stay inside the range of the previous candle (the “mother bar”).
How do you trade Inside bar?
In a trend, trade the break of the mother bar in the trend’s direction. Stop on the other side of the mother bar.