Trading the Inside Bar

Today  we conclude our series on price action trading strategies  by looking at “Trading the Inside Bar.” To refresh our memories, Monday, we looked at “ How To Trade The Pin bar”, Yesterday, we touched on “How To Trade The Fakey Pattern.” So onward to the Inside Bar

The Inside Bar Forex Trading strategy is a high probability strategy with a good risk reward ratio. Unlike other price action set ups, the inside bar strategy requires fewer stop losses. You’d be better trading inside bars during the daily chart timeframes and preferably in strong trending markets especially when breakouts influence the direction of the trend. I guess the first question we should be asking is:

What is an Inside Bar?

Well an Inside Bar is a bar that is nicely tucked within the range of the preceding bar, popularly known as the mother bar.  The inside bar typically has a higher low(HL) and a lower high(LH) than the mother bar. On some smaller time frames, the inside bar is shaped like a triangle.

insidebar-motherbar

As the anatomy suggests, the inside bar is nicely sandwiched within the high and the low of the mother bar. It is also possible to have multiple inside bars within the range of a mother bar. Such a scenario suggests a possible breakout.

What Does an Inside Bar Suggest?

An inside bar suggests  a period of consolidation. Inside bars take shape  as a market consolidates after a strong market offensive. They occur at crucial  pressure points  such as major support/decision levels. The inside bar also provides a low risk opportunity to enter a trade or a safer exit point. Like I hinted earlier, the inside bar acts both as a continuation signal and a turning point  signal. For beginning traders out there, inside bars would be a lot easier to deal with. However, reversal signals can be very tricky to deal with. So you’d be better off leaving them alone until you have bagged enough experience  dealing with continuation signals.

How Do I Trade The Inside Bar?

Now how do I trade the inside bar? Well, you can trade inside bar two ways. You can trade the inside bar as a continuation signal or a reversal signal.

insidebar-continuation-reverse

 

As you can see from the graphic, the inside bars act as both  reverse and continuation signals. We see an inside bar forming at a support level, and then the market breaking in the opposite direction. The market then moves higher from the inside bar pattern that formed at the previous level of support

Where Do I Place Stop Losses?

Now some of you are probably wondering “Where do I place stop losses?”   The most common stop placement of choice is just below the mother bar high or low  depending on whether you are going long or short. There is not point trying to figure out the best distance. Either, the trade works or it doesn’t.

Below  is an illustration of the stop placement

insidebar-highlow

 

The next typical stop placement  is on inside bars with large mother bars You may want to place your stop loss at the 50% level-that is halfway between high and low of the mother bar. If you want to achieve a  solid risk reward ratio, the 5o% level is the way to go. The illustration below says it all.

insidebar-motherbar

Trading Inside Bars as Continuation Signals

You can also trade inside bars as continuation signals. The most appropriate time to trade an inside bar is when the market is trending strongly  or the market is moving in the opposite direction or it decides to take a break. Inside bars came in handy on the daily or 4 hr chats. But you’d be better off sticking to the daily charts until  you have perfected the inside bar setup in this time frame.

insidebar-continuationsignal

The above graphic illustrates  inside bar setups on the back of a strong upward trend. This resulted in a clean breakout. When you see such a scenario, it’s time to buy..

Trading Inside Bars as Reverse Signals

It’s also possible to trade reverse signals. But please make sure you’ve perfected the continuation signal pattern before jumping into reverse signals. Reversal signals can play tricks with your trades. Besides  it will not be in your best interest to jump straight into the lion’s den.

inside-reversal

 

 

As  you can see from the graphic here, the inside bar setup on the left  reveals a period of consolidation and indecision on the market’s side. A downward slide ensues as price breaks down past the inside bar’s mother bar. In such a scenario, it’s time to sell.

If you’re stumbled in here looking to join the forex trade bandwagon look up Why Forex Trade Is So popular.  Next,if you want to give your trading skills an edge by relying on pure price action trading/analysis,  instead of fancy forex robots,  get started with What is Price Action Trading?  and then build up from there by reading the other price action posts on the blog.

That’s wrap for”Trading The Inside Bar.” Hopefully you’ve learnt  a lot for these three price action strategies. And I’m sure you’ve also learnt that you don’t need a zillion price indicators clustering your screen either. But that’s not the end though..There’s more price action tips where those where those came from. So till next time take care.

 

Looking to open a forex trading account?

Sign up with EasyMarkets and Get a Free eBook- The Beginners Guide to Forex Trading

 

 

 

 

 

 

Advertisements

51 thoughts on “Trading the Inside Bar

  1. There is certainly a loot to fnd ouut about thiss
    issue. I love aall tthe point you’ve made. Woah!

    I’m reeally diggkng tthe template/theme oof this blog.
    It’s simple, yet effective. A lot oof timds it’s veryy hard
    to geet that “perfect balance” between usabilitty annd visual appeal.
    I mus say yoou havve done a antastic jobb wuth this.

    In addition, tthe blog loasds extremely qquick foor mee onn Chrome.Exceptonal
    Blog! Goood day! I just want tto orfer yoou a hujge thumbss upp foor the excellentt information yyou
    haqve gott riight hete oon thius post. I wiill
    be returniung to yiur wbsite for moore soon. http://foxnews.net

    Like

  2. Pingback: You Need To Know Ten Of These Candlestick Patterns | Forex Filli

  3. Excellent for those rushed nights when you do not have
    time to make something from scratch.

    Like

  4. Recuerda que el amor es la alegría de los buenos, es la reflexión de los sabios y el asombro de los incrédulos.

    Like

  5. What’s up, everything is going fine here and ofcourse every one is
    sharing facts, that’s truly good, keep upp writing.

    Like

  6. Adicione na adulação da pedaço, a cebola,
    champignon, vinho, tablete de caldo de músculos, já dissolvido na chuva quente e a farinha de trigo para engrossar.
    Enfim, existem copiosas formas de perder peso, e nós almejamos logo como emagrecer” é bastante importante para perdermos obesidade de modo saudável.

    Like

  7. I have been surfing online more han three hours today, yet I never found any interesting
    article like yours. It is pretty worth enough for me.
    Personally, if alll web owners and bloggers made good content as
    you did, the net will be much more useful than ever before.|
    I couldn’t resist commenting. Perfectly written!|
    I wll right awa clutch your rss as I can not in finding your
    email suubscription link or e-newsletter service.
    Do you have any? Kindly permit me recognise in order that
    I may subscribe. Thanks.|
    It’s appropriate time to make some plans for the
    future and it’s time to be happy. I have read this post and if I could I desirte to
    suggest you some interesting things or tips. Maybe you can write next articles referring to this article.
    I want to read even more things about it!|
    It is perfect time tto make some plans for the longer term and
    it is time too be happy. I have learn this put up andd if I may just I
    desire to sugygest you few fascinating things or advice.

    Maybe you can write next articles relating to this article.
    I desire to learn more things about it!|
    I have been surfing online more than 3 hours these days, yet I bby no means discovered any interesting articcle like yours.
    It is lovely price sufficient for me. In my view, if all website owners and bloggers maqde excellent content as you did,
    the web can be much more helpful than ever before.|
    Ahaa, itts nice dialogue about this paragraph
    at this place at this blog, I habe read all that, so now me also
    commenting here.|
    I am sure this paragraph has touched aall the internet
    viewers, iits really really pleaswnt post on building up new website.|
    Wow, this piece of writing is pleasant, my sister is analyzing these things, thus I am going
    to let know her.|
    bookmarked!!, I love your site!|
    Way cool! Somee extremely valid points! I appreciate you writing this article plus the
    rest of the site iis also very good.|
    Hi, I do believe this is an excellent web site.
    I stumbledupon it 😉 I’m going to revisit yett again since I bookmarked it.
    Money and freedom iis the grteatest wayy to change, may
    you be rich and continue to help other people.|
    Woah! I’m really enjoying the template/theme of this blog.

    It’s simple, yet effective. A lot of times it’s challenging to
    get that “perfect balance” bstween usability and visual appearance.
    I must say that you’ve done a excellent job with this.

    Additionally, the blog loads extremely quick foor mee onn Firefox.
    Exceptional Blog!|
    These are really wonderful ideas in on the topic of blogging.
    You have touched some ploeasant points here.Anny way keep up wrinting.|
    I love what you guys are up too. Thiis typoe of clever work and exposure!

    Keep up the very good works guys I’ve incorporated you guys too blogroll.|
    Hi there! Someone in my Myyspace group shared this
    website with us so I came to give it a look. I’m definitely loving the information. I’m book-marking
    and will be teeting this tto my followers! Great blog and fantastic style and design.|
    I really like what you guys are usually up too.
    This type of clever work and reporting! Keep up the great works guys
    I’ve included you guys to my personal blogroll.|
    Hi there would you mind sharing which blog platform you’re using?
    I’m looking tto start my own blog in the near future
    but I’m having a hard time deciding between BlogEngine/Wordpress/B2evolution and Drupal.
    The reason I ask is because your deign and style seems different then most blogs
    and I’m looking for something comletely unique.
    P.S Sorry for getting off-topic butt I had to ask!|
    Hey woud you min letting me know which webhost you’re working with?
    I’ve loaded yoour blog in 3 completely different wweb browsers and I must say this blog loads a lot quicker
    then most. Can you suggest a good internet hosting provider at a honest
    price? Many thanks, I appreciate it!|
    I really like it when people get together andd share views.
    Great site, keep it up!|
    Thank you for the good writeup. It in fact was a amusement account it.

    Look advanced to more added agreeable from you!
    By the way, how could we communicate?|
    Hey just wanted to give you a quick heads up. The text in your artricle seem
    to be running off the screen in Safari. I’m not sure if this is a formatting issue or something to
    do with web browser compatibility but I thought I’d post to let yoou know.
    The layout look great though! Hope you get the problem resolved soon. Many thanks|
    This is a topic that is near to my heart… Besst wishes!
    Where are your contact details though?|
    It’s very simple tto find out any maatter on net as compared
    to textbooks, as I found this parawgraph aat this website.|
    Does your website have a contact page? I’m having a tough time locating it but, I’d like tto
    send you an email. I’ve got some ideas for your blog yyou mught
    be interested in hearing. Either way, great website and
    I look forward too seeing it develop over time.|
    Greetings! I’ve been reading your site for a whiile now and finally got the courage to go aheadd and give you a sholut out from Kingwood Texas!
    Just wanted to terll you keep up the excellent work!|
    Greetings from Idaho! I’m bored at work so Idecided
    to browse your website on my iphone during lunch break.
    I really like the info you present here and
    can’t wait to take a look when I get home.
    I’m shocked at how fast your blog loaded on my cell phone ..
    I’m not even using WIFI, just 3G .. Anyways, amazing blog!|
    Itss such as yyou learn my mind! You appear to know so much about this,
    such as you wrote the e book inn it or something.
    I believe that yyou simply could do with some percent tto popwer the message house a bit, but instead of that, that
    iis great blog. A great read. I’ll definitely be back.|
    I visited many websites but the audio quality for audio songs existing
    at this website is truly excellent.|
    Howdy, i read your blog occasionally and i own a similar one and i was just wondering if youu get a lot of spam
    remarks? If so how do you stop it, any plugin or
    anything you can advise? I get so much lately it’s driving me
    insane so any help is very much appreciated.|
    Greetings! Very helpful advice in this particular post!
    It’s the little changes that produuce thee largesst changes.
    Thanks for sharing!|
    I seriously love your site.. Very nixe colors & theme.
    Did you build this website yourself? Please reply back as I’m trying to
    create my very own site and want to learn where you got this from
    or just what the theme is named. Cheers!|
    Hi there! This article couldn’t be written any better! Looking at this post
    reminds mme of my prdevious roommate! He constantly kept talking about this.
    I most certainly will forward this article to him. Pretty sure he’s going to hav a great read.

    Thanks for sharing!|
    Wow! This blog looks just like my old one! It’s on a completely different topic but it has pretty much the same layout and
    design. Great choice of colors!|
    There’s certainly a great deasl to learn about this
    topic. I reall like all of the points you have made.|
    You’ve made some decent points there. I looked on the interne to fijnd out mopre about the iissue and found most people will go along with your views on this site.|
    Hi there, I log on to your new stuff regularly. Your
    writing style is awesome, keep doing what you’re doing!|
    I simply couldn’t go away your site prior tto suggesting that I really enjoyed the standard informatio a person provide on your visitors?
    Is gonna be again often inn order too check ouut new posts|
    I wanmt to to thank you for this great read!!
    I absolutely ehjoyed every biit oof it. I’ve got you book marked to check out new things you post…|
    Hi there, just wanted to say, I loved this blog
    post. It was inspiring. Keepp on posting!|
    Hello, I enjoy reading through your post. Ilike to write a little comment to support you.|
    I constantly spent my half an hour to read this weblog’s posts evey day along with a cup of
    coffee.|
    I every time emailed this website post page to all
    my friends, as if like to read it afterward my contacts will too.|
    My coder is trying to persuade me to move to .net from PHP.
    I have always disliked the idea because of the expenses.
    But he’s tryiong none the less. I’ve been using Movable-type on a variety of websites for about a year and
    amm anxious about swiching to another platform.
    I have hheard very good things about blogengine.net.
    Is there a way I can transfer all my worrdpress conjtent into
    it? Any kind of help would be greatly appreciated!|
    Hi! I could have sworn I’ve been to your blog before but
    after looking at a few of the articles I reralized it’s new tto
    me. Anyways, I’m definitely pleased I stumbled
    uppn it and I’ll be book-marking it and checking back frequently!|
    Great work! Thiis iis the kind of info that should be shared around the internet.

    Disgrace on the seek engines for now not positioning this post upper!
    Come onn over and seek advice from my website . Thank yoou =)|
    Heya i’m for the first time here. I found this booard and I find It truly useful & it helped me out much.

    I hope to give something back and aid others like you helped me.|
    Hello, I do think your site could be having internet browser compatibility problems.
    Whenever I take a look at your blog in Safari, it looks fine however,
    if opening in Internet Explorer, it’s got some overlapping issues.
    I just wante to give you a quick heads up! Besises that,
    excellent blog!|
    Someone necessarily asist too make significantly articles I would
    state. This is the first time I frequented your website page and to
    this point? I amazed with the researh you made to create this actual post
    incredible. Magnificent job!|
    Heya i’m for the primry time here. I came across this board and I to find It really useful & it helped me out much.
    I hope to offer something back and help others such as you aided me.|
    Hello! I just would like to give you a huge thumbs up for the excellent
    info you’ve got here on thuis post. I will be coming back to your site for more soon.|
    I always used to study poswt in news papers but now ass I
    am a user of internet therefore from now I am using nnet for articles or reviews, tyanks to web.|
    Your method of explaihing the whole thimg in this post is really pleasant, all be able to without difficulty know it, Thanks a lot.|
    Hello there, Idiscovered your web site by means of Google at the same time as looking for a similar matter, your wweb site came up, it seems to be good.
    I’ve bookmarked iit in my google bookmarks.
    Hi there, simply became alert to your weblog via Google, andd found that it’s truly
    informative. I’m gonna bbe careful for brussels. I will be grateful if you
    continue this in future. Numerous other people will likely be benefite out
    of your writing. Cheers!|
    I am curious to fibd out what blog platform you’re
    working with? I’m experiencing some small securrity problems with my latest blog annd I would like to
    find something mopre secure. Do you have any suggestions?|
    I am really imprtessed ith your writing skills as well as with the layout on your blog.

    Is this a paid theme or did you modify it yourself? Anywsay keep up the nice quality writing, it is rare to see a nice
    blog like this one nowadays.|
    I am extremely impresseed along with your writing talents as neatly as wiith the layout in your weblog.

    Is this a paid subject matter oor did youu modify it
    your self? Anyway keep up the excellent high quality writing, it iis uncommon to look a
    nice weboog like this one nowadays..|
    Hello, Neat post. There is an issue together with your websiite in internet explorer, could check this?
    IE still is the matketplace chief and a huge element of folks will
    pass over your magnificent writing due to this problem.|
    I am not sure where you are getting your information, but great topic.
    I needs tto spend some time learning much more or understanding more.
    Thanks foor excellent information I was looking for this info for my mission.|
    Hi, i think that i saw you visited my webb site thus i came tto “return the
    favor”.I am attempting to find things to enhance my site!I suppose
    its ok too use a few of your \

    Like

    • Swen! I have a pop up subscription form. You should see it on your screen. If not let me knwow. Check my contact page for my email address.

      Like

  8. I just couldn’t leave your site prior to suggesting that I really loved the standard
    information a person provide on your guests? Is going to
    be back steadily to investigate cross-check new
    posts http://pagebin.com/nF4RHhBb

    Like

  9. Pingback: How To Trade Trends Using Price Action Analysis | Forex Filli

  10. Hi there! Someone in my Myspace group shared this site with us
    so I came to give it a look. I’m definitely loving the information. I’m bookmarking and will
    be tweeting this to my followers! Wonderful blog and brilliant design and style.

    Like

  11. Whoa! This blog looks just like my old one! It’s on a entirely different topic but it
    has pretty much the same layout and design. Outstanding choice of
    colors! http://bit.ly/2k3aduw

    Like

  12. Pretty! This has been an extremely wonderful article.

    Many thanks for providing this info.

    Like

  13. Some genuinely nice stuff on this website, I like it.

    Like

  14. It’s awesome to pay a quick visit this site and reading the vieews of all colleagues
    on the topi of this paragraph, while I am also eager oof getting experience.

    Like

  15. I’ve been browsing on-line greater than 3 hours today, but I never
    discovered any interesting article like yours. It is lovely value enough for
    me. In my view, if aall web ownewrs and bloggers
    made excellent cointent as you did, the web will
    likely be much more useful than ever before.

    Like

  16. Very good article. I absolutely appreciate this site.
    Continue the good work!

    Like

  17. An interesting discussion is worth comment. I do think that you ought to publish more
    about this subject, it might not be a taboo matter but
    typically people do not speak about these issues.

    To the next! Many thanks!!

    Like

  18. Thanks for this brilliant website. I am trying to read even more posts.
    Thanks again!

    Like

  19. This is actually fascinating, you are a very professional blogger.
    I’ve joined your rss feed as well as sit up
    for searching for more of your excellent post.In addition,
    I have shared your site in my social networks!

    Like

  20. Great write-up and I will be sure to look back later on for more articles.

    Like

  21. Pingback: You Need To Sharpen Your Trading Edge – Forex Filli

  22. Pretty portion of content. I just stumbled upon your web site
    and in accession capital to assert that I get actually loved account your weblog posts.
    Anyway I will be subscribing in your augment or even I success you get entry
    to constantly rapidly.

    Like

  23. This blog was… how do I say it? Relevant!!

    Finally I’ve found something which helped me. Thanks a lot!

    Like

  24. Pingback: We’re Trading Pin Bar/Inside Bar Combination – Forex Filli

  25. You’re in reality an excellent website owner.

    The website loading pace is incredible. It appears that
    you’re doing any special trick. Also, the contents are a masterpiece.

    you have performed a wonderful task on this subject!

    Like

  26. Pingback: Homepage

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s