What is the Inside Bar and what does it mean?

You must be too familiar with the basics of Inside Bar. It is a candle enclosed entirely from top to bottom by the preceding candle, called the mother bar. When it comes to Inside Bar, it is implied that this setup consists of 2 candles.


When we see the Inside Bar, we confirm that the volatility of the market is low, like a compression spring. So often we will rely on the dynamics of the market after breaking the Inside Bar to trade. But things are not so simple, the win or loss depends on how you see and judge whether an Inside Bar is qualified or not.

Inside Bar - Types of Inside Bar and Meaning

Here are the types and variations of the Inside Bar:

1. Inside Bar is small in length:

This is the Inside Bar with a candle behind it of a small length, i.e. the highest price is close to the lowest. This candle shows that the market is confused and the volatility is very low.


When the Inside Bar is of a small length, the possibility of market continuation or reversal is equal, because this is only a sign of market confusion.

2. Inside Bar with large length:

This Inside Bar has a large candlestick length, but must also be completely surrounded by the big candle in front. Great length means great variation.


Now, depending on the closing price of the Inside Bar, we can "read" that is the confusion or reversal of the market.

If the Inside Bar is of a large length and a large real body of the same color, it is a sign of strength (if both the mother candle and the inside bar are bullish), or weakening (if both the parent candle and the inside bar candle are bearish). . When we meet this candle, we are inclined to continue the trend more, because the weakening of the strength of the market is showing a lot.


Inside Bar candlestick has a large length and small body is a sign of market confusion:


When meeting this candle, it will be inclined to the possibility of a reversal. Because this Inside Bar resembles a pin bar to 80%, the market's distrust is tilted to the REFUSE UP, shown through the long upper tail.

3. Multiple Inside Bar:

This is a very strong inside Bar pattern, stronger than the regular Inside Bar because at this time the market is for a long time accumulation, and the longer the accumulation is, the stronger the price will run when it explodes. Ideally, a multi-candle Inside Bar consists of about 3-4 candles, if more, a false break is more likely to occur and is more difficult to trade.


When meeting the Inside Bar with many candles, the trend will continue, because this explosive accumulation is supported by a previous trend.

Thus, each type of Inside Bar has a different meaning and story, you should adjust your strategy when meeting each type of Inside Bar. Do not see the Inside Bar, which is going to continue, or entering the 2-headed order, stubbornly is unavoidable.

Inside Bar - Don't trade the 2-headed block when meeting the Inside Bar

The two-headed block trade is placing 1 buy stop, a sell stop order at the top and bottom of the mother bar, with the hope that the market breaks. In any direction, you can make a profit. 

For example to understand immediately:


Inside Bar is on EURUSD H4, brothers put a buy stop at the top and a sell stop at the bottom of the mother bar at the same time. The third candle broke out, the buy stop order was matched. Through the 4th tree, the price dropped, causing this buy stop to stop loss, and at the same time match your sell stop order. This sell stop order immediately followed by a stop loss because the market increased.

Every start is dead. Do you use One Cancel Other order (OCO, one order is matched, the other order cancels itself), you also die.

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