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Inside Bar

Education post 3/100 – How to trade inside bar?What is an Inside Bar ? The inside bar is a two bar candlestick pattern, which indicates price consolidation. In order to confirm this pattern you need to see a candle on the chart, which is fully contained within the previous bar. In this manner, the inside bar candle should have a higher low and a lower high than the previous candle on the chart. The Inside Bar is fairly easy to spot on the chart, but using an Inside Bar indicator can assist the trader in quickly finding these patterns on their price chart as well.  Psychology behind the Inside Bar Since the inside candle has a lower high and a higher low than the previous candlestick on the chart, this indicates that the currency pair is consolidating. Why is it consolidating? It is consolidating because the bulls cannot manage to create a higher high and at the same time the bears fail to create a lower low. As such, there is not sufficient buying or selling pressure to break the previous bar’s high or low. Entering an Inside Bar Trade When the price action completes an inside candle on the chart, you should mark the low and high of the Inside Bar consolidation range. These two levels are used to trigger of a potential trade. Remember, the inside candle clues us in to the eventual breakout and likelihood of a continuation outside the range in the direction the break, however, it doesn’t give us information about the direction of the breakout through the range, prior to the actual move. In simple terms, if the price action interrupts the range upwards, then you should go long. If the price action breaks the range downwards, then you should trade the short side. Stop Loss when Trading Inside Bars The usage of a stop loss order is recommended for any Forex trading strategy. The inside bar trading system is no different. You should always put a stop loss when trading inside candles. But where? The proper location of your stop loss is slightly beyond the inside candle’s top, or bottom, depending on the direction of the break. In other words, if the inside range gets broken upwards, you can buy the Forex pair and place a stop loss order right below the lower candlewick of the inside candle. The same is in force for bearish breakout of the inside range, but in the opposite direction. In this case you could sell the Forex pair and you put a stop loss right above the upper candlewick of the inside bar. Take Profit on Inside Bar Setup Projecting the potential move with Inside Bar Breakouts can be challenging. Often Inside Bar trades can lead to a prolonged impulse move after the breakout, so employing a trailing stop after price has moved in your favor is a smart trade management strategy. Along with this, I typically like to use a fixed Take Profit target at 1.5:1 or 2:1 reward to risk ratio to scale out of inside bars trades. In this manner, if the stop loss is 80 pips from the entry, then the minimum target would be located at 120 pips distance. Let’s take a closer look at the inside bar pattern on the Forex chart upside.
Education
by GroundStoneHoldings
DXY Fresh supply zone after inside bar breakdownYesterday DXY was an inside day breakdown to make a new pivot low, what a nice inside bar trading day yesterday! The breakdown formed a fresh supply zone that will interest me very much! Both EURUSD and GBPUSD have a corresponding set-up right there. While, this will be a little tricky as what this trade really want is a fast and direct pullback, if it has some consolidation , making lower lows, and forming a new little uptrend to test the zone, actually the trade will be a much lower rating trade. So let's try to define a time frame limit for this trade, I would love to stay in this idea until next Friday lol. Let's see how it goes!
TVC:DXYShort
by Trader_Joe_Lee
3
XAUUSD inside day and intraday harmonic patterns and S/D zonesGold had an inside day yesterday in a very tight consolidation. In this hourly chart, it's clearly that there will be a harmonic patterns and S/D zones combination trade whichever way it breaks. That did make some sense to better interpret the inside day. After all, inside bar trading in consolidation is kinda a high risk / low reward trade, won't be willing to trade both side as it will hit one of the combination before 1st kick. While, in an day-trade perspective, the direction it breaks still matters.(but not worth trading directly) Accordingly, my conclusion is that I'll still pay attention in the direction it breaks today, but find a intra-day low risk set-up to follow the direction; Once it hit one of the combination trade, turn into the consolidation mode to look for reversal sign. Let's see how it goes!
FX_IDC:XAUUSD
by Trader_Joe_Lee
9
EDUCATION INSIDE BAR FOREX TRADING STRATEGY RULESNormally INSIDE BAR will give us two trade 1. the first trade is to trade at the breaking out 2. the 2nd trade is to trade after the breakout + pull back the first trade normally can quickly take you to 1:1 risk/reward the 2nd trade can give you a higher R/R WHAT IS AN INSIDE BAR? If you are wondering what an inside bar is, then here’s an explanation. - the inside bar is a 2 candlestick formation - the first candlestick that forms may be called the “mother candlestick” - the second candlestick that forms after the “mother candlestick” is engulfed completely within the shadows of the mother candlestick . That second candlestick is called the “inside bar. - the preceding candlestick can be either a bullish or bearish bar ( candlestick ). - the inside bar itself can be bullish or bearish candlestick . WHY INSIDE BARS FORM? Inside bars, when they form show a time period of market consolidation. This market consolidation can be due to: - a time of indecision as traders are figuring out if they are going to buy or sell or not - a period of low trading activity (low trading volume ) - it can also be a time where the bulls and bears of market forces are also almost of equal strength and each really don’t know what direction to take on their trades. Where Do Inside Bars Form? Well, inside bars can form anywhere. But the inside bars that are of significance that many traders take notice of must form on these level(areas) listed below: - support - resistance - pivots - Fibonacci levels - trend line touch areas Its best to only pay attention to inside bars that form in the price levels listed above. INSIDE BAR FOREX TRADING STRATEGY RULES Selling Rules: - the market must be in a downtrend. - when you see an inside bar form, then place a sell stop order anywhere from 2-3 pips below the low of the inside bar . You do that soon as that that inside bar closes. - For Stop loss, place it anywhere from 5-10 pips above the high of the inside bar . Buying Rules: The buying rules for the inside bar trading strategy are just the exact opposite of the selling rules. Here they are: - the market must be in an uptrend. - when you see an inside bar form, then place a buy stop order anywhere from 2-3 pips above the high of the inside bar . You do that soon as that that inside bar closes. - For Stop loss, place it anywhere from 5-10 pips below the low of the inside bar . DISADVANTAGES OF THE INSIDE BAR FOREX TRADING STRATEGY - false breakouts do happen and you will get stopped out as price reverses and hits your stop loss. - avoid trying to use smaller timeframes to trade inside bars, there will be too many “noise” and false signals. ADVANTAGES OF THE INSIDE BAR FOREX TRADING STRATEGY - pure price action trading - if you trail stop your trades to lock in profit as shown in the previous chart above, you can make a lot of profit if the trend is strong. - if you trade using the daily chart , you need only a few minutes each day to check your chart, place your pending order (when you spot an inside bar ) and walk away. Check later during the day to see which pending - - order was activated then cancel the other that was not activated. - its a very easy candlestick pattern to spot, even a housewife who has no prior experience in trading forex can use this system and make money trading forex.
Education
by asdfghjhhg
3
ETHUSD inside day , how to choose...Every inside bar is a multiple choice question, we inside bar traders have to decide : A. only want to take the long B. only want to take the short C. both sided D. none of the above (no trades) That's the most interesting part of inside bar trading, and that's how it cooperates with other technical analysis~ Here we got this inside day in a perfect downtrend that just finished EMA correction, while at the same time, there is a tiny intraday bullish bat pattern that already got tested once. That is, if it breaks to the upside, that'll be the confirmation entry for the bat; if it breaks to the downside, that'll be a great with-trend trade. Of course, it's still kinda hard to decide to choose C or D in many of these kind of cases, so I would more like to choose a E, which won't trade the inside day directly but wait for the direction it breaks and look for intraday trades that corresponding with the inside day breakout direction. Let's see how it goes yo!
BITFINEX:ETHUSD
by Trader_Joe_Lee
1
USO / CL - Bullish price action buy signal from key support**Market Structure** *Market has been making higher highs *Large rejection off of the key support zone of $67 - $66.40 *Intra-day pattern is a 2 bar reversal, daily is a bullish pinbar **Trading Ideas** *Go long at an upper break of the pattern for a less aggressive entry ($68) or enter long on a pullback for a more aggressive entry($67-$66.80) *IV rank in oil is still very high so either get long by selling puts to collect on both direction and premium, or simply get long via /CL or USO
NYMEX:CL1!Long
by krugman87
4
USDTRY inside day after all time high yo!It's very rare to have such a trade on Forex trading as not so many pairs would be at its all time high/low. There is crazy inflation going on in Turkish New Lira, and when it comes to an inside bar after new high trade, "Only want to take the long" is always my answer Worth trying if it's still able to break to the upside today, while as a daily chart trade, this pair would also have crazy interest cost and crazy spread, so maybe an intraday momentum trade is the better idea. Let's see how it goes!
Long
by Trader_Joe_Lee
11
XAUUSD inside day after inside week breakdown!The day before yesterday there was also an inside day, which was failed with huge fluctuation that day! The difference between this one and the last one is that last one had not broken the inside week low yet. That makes it better to short this inside day breakdown! So it'll be interesting to take this breakdown directly or looking for intraday set-up after it breaks. No intention to long the breakout though. Let's see how it goes!
FX_IDC:XAUUSDShort
by Trader_Joe_Lee
9
PDD 1st inside day after IPO,let's see how momentum worksThere are plenty of bear news after this IPO to break its initial price 19.00 yesterday. People in China keep on making fun of the quality on this platform recently, many of which are genius lol. Still, to short an IPO is not that easy so that we can take the recent slump as profit taking and stop loss selling cycle, when it's already in 19.00 and form an inside day, to long the breakout is still a trade that worth the risk (only if having gigantic risk appetite) . On the other hand, if it breaks to the downside, the panic momentum would probably make new lower low than the mother bar. So it'll be interesting to watch how the market deals with this inside day, and maybe use some tiny risk to take part in the party for me. Let's see how it goes!
NASDAQ:PDD
by Trader_Joe_Lee