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.
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.
This video will explain exactly how I trade the inside bar.
Module 1: The Basics
- Unit 1: What is the Forex?
- Unit 2: Forex terminology
- Unit 3: Fundamentals v technical analysis
- Unit 4: What is price action?
Module 2: Market Analysis
- Unit 1: How to analyse the markets
- Unit 2: What types of trades can we use?
- Unit 3: Marking support and resistance levels
- Unit 4: Time frames/best times to trade
Module 3: Price Action Setups
- Unit 1: Price action setups introduction
- Unit 2: Pin bar
- Unit 3: Engulfing bar
- Unit 4: Inside bar
- Unit 5: Sandwich combo setup
Module 4: Chart Setup
Module 5: Trade Management
- Unit 1: Trade plan
Module 6: Trade Psychology
- Unit 1: Psychology introduction
Module 7: Continue your learning
- Unit 1: What next?