Inside Bar is a very powerful pattern in Price Action Trading. Inside Bar is the only pattern where you can both reverse and continue the trend and still maintain a high probability of winning.

But why do we still face many times when trading Inside Bar? Why as soon as the order is entered, the price immediately reverses and forms a false breakout?

This article will explain to you the thinking and some ways to increase the probability of winning the Inside Bar trade.

What is the Inside Bar and what does it mean?

If you have basic knowledge about Inside Bar, you are probably too familiar. It is a candle that is completely surrounded from top to bottom by the previous candle, called the mother bar. When it comes to Inside Bar, we understand that this setup includes 2 candles.

When we see the Inside Bar, we confirm that the market's volatility is low, like a compressed spring. So usually we will rely on the momentum of the market after breaking the Inside Bar to trade. But things are not so simple, winning or losing depends on how you see and evaluate whether an Inside Bar is qualified or not.

Inside Bar - Types of Inside Bars and meanings

Here are the types and variations of the Inside Bar:

1. Inside Bar has a small length:

This is an Inside Bar with a small candle behind it, i.e. the high is near the low. This candle shows that the market is indecisive and volatility is very low.

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

2. Inside Bar with large length:

This Inside Bar has a large candle length, but must also be completely surrounded by the previous large parent candle. Big length means big volatility.

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

If the Inside Bar has a large length and a large body of the same color, it is a sign of strength (if both the mother and the Inside Bar are bullish), or weakness (if both the mother and the Inside Bar are bearish). . When we meet this candle, we are more inclined to continue the trend, because the weakness or strength of the market is showing very clearly:

If the Inside Bar has a large length and a small real body, it is a sign of indecision of the market:

When meeting this candle, Hoai will lean towards the possibility of a reversal. Because this Inside Bar resembles a pin bar 80% of the time, the market's skepticism is skewed towards the UP NOVER, as shown by the long tail above.

3. Multiple Inside Bar (multiple Inside Bar):

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

When meeting the Inside Bar with many candles, Hoai will continue the trend, 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 encountering each type of Inside Bar. Don't see the Inside Bar that is a continuation attack, or a 2-headed order, face down is inevitable.

Inside Bar - Don't trade with a 2-way block when you meet an Inside Bar

A double-block trade is to place a buy stop order and a sell stop order at the top and bottom of the mother bar at the same time, in the hope that the market breaks In either direction, you can make a profit. According to Hoai, this is an easy way to trade that makes you face heavy.

Why? Take an example to understand immediately:

Inside Bar on EURUSD H4, you put buy stop at the top and sell stop at the bottom of mother bar at the same time. The 3rd candle broke, the buy stop order was matched. Through the 4th tree, the price dropped, making this buy stop order stick to a stop loss, and also matched your sell stop order. This sell stop order was immediately followed by a stop loss because the market went up.

Every beginning is dead. If you use the One Cancel Other command (OCO, if this order is matched, the other order will self-destruct), you will also die.