What is an Inside Bar?
Quick Answer: An inside bar is a candle whose range fits entirely within the prior candle, signaling temporary consolidation ahead of potential breakout.
Understanding Inside Bars
An inside bar is a candle whose high and low lie within the previous candle's range. It represents consolidation and often precedes breakouts.
Trading Inside Bars
Breakout setups trigger entries when price breaches the mother bar high or low. Combine inside bars with supply or demand zones, trend lines, or news catalysts for context.
Optional Fakeout Play
Aggressive traders fade false breaks that snap back within the range, targeting the opposite side. Use tight stops to control risk.
Beware of Chop
In low-volatility environments, inside bars stack repeatedly, leading to false signals. Wait for expansion in volume or volatility before committing capital.
News Events
Avoid trading inside-bar breakouts immediately before high-impact news; slippage and whipsaws are common.
Related Terms
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