The Inside bar setup

The inside bar is exactly what it says it is, a candle that does not breach the high and low of the previous candle (mother bar). It indicates a period of indecision  and basically means the market is having a breather before moving on.

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Now the only time I look to use these inside bars, is when we have a well established range market or key level and we get a breakout. These types of trades occur much less frequent in the Forex markets. For this reason, I don’t tend to trade them very often but they are good setups to look for, especially in range bound markets.

So a breakout, means we get a candle that is usually fairly large in size which closes beyond a key level. So it could be a key level in a range bound market or a key level in a trending market.

Once we have a breakout candle closes beyond a key level, I then wait and look for an inside bar to form, the main thing I want to see is that the inside bar pulls back to the key level that just been broken, and to see the level hold and get rejected. I really like to see an inside pin bar form but its not essential, the main focus is if the level that has been broken is tested and holds.

An example of this is shown below on the usdcad 4hr.

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This video will explain exactly how I trade the inside bar.

FOREX TRADING STRATEGIES – The inside bar price action setup

Module 1: The Basics

Module 2: Market Analysis

Module 3: Price Action Setups

Module 4: Chart Setup

Module 5: Trade Management

Module 6:  Trade Psychology

Module 7: Continue your learning