Inside Bar is one of my favorite models when trading under Price Action. It is a highly effective strategy that provides traders with a good profit / loss ratio because it requires a lower level of Stop Loss than other models.
What is Inside bar?
Inside Bar is one or more bars that are completely within the price range of the previous bar, meaning it has a “higher low” and a “higher price” the bar before it. On time frames smaller than the Daily Chart, Inside Bar pattern is like a triangle.
Notice that in the example example chart below, we have two inside bars that fall within the price range of the previous Bar, we call it “Mother Bar”. The example below shows Inside Bar creating a breakout into an bull market.
Signification of Inside Bar
Inside Bar in forex is a “flash”, a leading signal that the market will reverse or continue the current trend. Inside Bar indicates whether this is a time of market hesitation, hesitation or accumulation. Inside Bar usually happens after a strong trend movement takes place, which can occur at market turning points or at strong support / resistance levels.
They usually give us an entry point with a low risk ratio or a reasonable exit point. Notice that the picture below is two examples of Inside Bar, one signaling a trend will continue and the other signaling a reversal.
Best time to use Inside Bar
The most appropriate time to use Inside Bar is when a strong trend is forming and the market is clearly moving in a trend and then decides to stall for a short time. If you trade on a breakout, the Stop Loss can be placed below mẹ of the mother candle, or under the mother candle if you are more careful.
Inside Bar can be used when trading on 4H or Daily charts, but I personally prefer the daily chart and I recommend all new traders to follow the daily chart until they have mastered, mastered and achieved the Certain success with Inside Bar.
Pay attention to the AUD / USD chart below, we see 2 Inside Bars which occur near the beginning of a new trend, and a strong move continues after they are formed.
Synthesized by top4forexbrokers.net