Inside bars: do you trade the breakout of the mother bar?

An inside bar — a candle contained by the previous one's range — signals compression, and the trade is the break of the mother bar's high or low. In ranges it whipsaws; in trends it catches continuations.

Inside bars: do you trade the breakout of the mother bar? — support and resistance diagram
Price bouncing between support and resistance

How do you trade them?

  • the conditions that make an inside bar tradeable
  • your entry, stop and target on the break
  • the regime where inside bars burn you
Inside bars: do you trade the breakout of the mother bar? — trend versus range diagram
A trending market compared with a ranging one

The candlestick guide covers the pattern's structure.

Comments

Log in to join the discussion. Comments follow the community guidelines.

Log in to comment

Loading comments…