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.

 

P.S. If you want to know everything there is to know about price action trading  Download for free The Ultimate Guide To Price Action Trading by Rayner Teo .This brilliant ebook will change your life as a trader. It sure did mine. And if you want a place  to put your price action trading strategies into practice(Including The Inside Bar), and get a simulated feel of live forex trading conditions   before trading live, open a demo trading account with Easymarkets. And if you believe you are ready to trade live on the forex markets, open a forex trading account with EasyMarketsand get a free forex trading ebook

If you’d like to subscribe to my mailing list, fill the form below and I’ll gladly add you to the list

 

 

 

 

 

 

 

 

Advertisements

149 thoughts on “Trading the Inside Bar

  1. You’ve really written a very good quality article here.
    Thank you very much for sharing.

    Like

  2. I’m certainly bookmarking this website and sharing it with my acquaintances.
    You will be getting lots of visitors to your website from me!

    Like

  3. Your article is really helpful. In addition to that, it really is engaging, compelling and well-written. I would want to see
    even more of these types of terrific writing.

    Like

  4. Tenha PODER de ocupar a Mulher que você DESEJAR.

    Like

  5. Greetings! Very helpful advice within this post!
    It is the little changes that will make the most important changes.
    Thanks a lot for sharing!

    Like

  6. Aconselho que tenha, quando menos, uns 200 amigos!

    Like

  7. Howdy! This is my very first visit to your site!
    We are a team of volunteers and starting a new project in a community
    in the same niche. Your site provided us beneficial information to work on. You’ve
    done an exceptional job!

    Like

  8. I’m typically to blogging and i really love your
    content. The article has actually grabbed my
    interest. I’m going to bookmark your web site as well as retain checking
    for fresh material.

    Like

  9. I pay a visit each day some sites and sites to read content, except this webpage presents quality based articles.

    Like

  10. É mas completo e também diferenciado que já
    vi.

    Like

  11. E também caso ela não mude? Não fique mudo.
    Não se reprima.

    Like

  12. Hey I know this is off topic but I was wondering if you knew of any widgets I could add to my blog that automatically tweet my newest
    twitter updates. I’ve been looking for a plug-in like
    this for quite some time and was hoping maybe you would have some experience with something like this.
    Please let me know if you run into anything. I
    truly enjoy reading your blog and I look forward to your new
    updates.

    Like

  13. Wonderful goods from you, man. I’ve understand your stuff previous to and you are just too magnificent.
    I really like what you have acquired here, certainly like what you’re saying and the way in which you
    say it. You make it entertaining and you still care for to keep it wise.
    I can not wait to read far more from you. This is
    actually a terrific site.

    Like

  14. Hi! I could have sworn I’ve been to this
    blog before but after browsing through some of
    the post I realized it’s new to me. Anyways, I’m definitely delighted I found it and I’ll be bookmarking and checking back often!

    Like

  15. Hey there would you mind sharing which blog platform you’re using?
    I’m looking to start my own blog in the near future
    but I’m having a hard time choosing between BlogEngine/Wordpress/B2evolution and Drupal.
    The reason I ask is because your layout seems different then most blogs and I’m
    looking for something completely unique. P.S Sorry for getting off-topic but
    I had to ask!

    Like

  16. Excellent post. Keep posting such kind of info on your page.
    Im really impressed by your site.
    Hello there, You’ve performed a fantastic job. I will definitely digg it and in my opinion suggest to my friends.
    I am confident they will be benefited from this site.

    Like

  17. Good post. I learn something totally new and challenging on blogs I stumbleupon every day.

    It will always be interesting to read articles from other writers and use a little something from other
    sites.

    Like

  18. I constantly emailed this website post page to
    all my associates, because if like to read it
    next my contacts will too.

    Like

  19. Great! How did you get such fine writing abilities?

    Is it a talent or outcome of hard work? I’d like to start
    my own blog site but I am genuinely terrible at penning.
    But, anyway, it’s not a big issue if you know about this internet site kirkpatrickchristensen74.ampedpages.com.
    It is an evaluation website which main objective is to assess
    composing websites and assess the grade of their items.

    Like

  20. What’s up Dear, are you in fact visiting this site daily, if so afterward you will defnitely take good know-how.

    Like

  21. Yet another good write-up from excellent blogger. Many thanks for you blogging site!
    It is always useful to read you articles. Could you provide
    some bits of advice about ways to develop composing skills?
    I am very bad as a freelance writer and it’s particularly
    troublesome given that teachers in our university consistently
    give us composing tasks. This might be a critical trouble but there
    are are present special critique websites, like the one
    you can visit by clicking on this link http://bit.ly/2zqWc50, where skilled
    writers and evaluators assess various composing organizations to help those
    who are in need of academic authoring support.

    Like

  22. Hi there all, here every one is sharing these kinds of familiarity,
    so it’s pleasant to read this website, and I used to pay a quick visit this web site daily.

    Like

  23. I do consider all the ideas you have introduced on your post. They are very convincing and will definitely work. Still, the posts are very brief for newbies. May you please lengthen them a bit from subsequent time? Thank you for the post.

    Like

  24. This would be the right blog for everyone who hopes to learn about this topic. You already know a great deal its virtually not easy to argue to you (not that I really would want…HaHa). You actually put a fresh spin with a topic thats been discussed for decades. Fantastic stuff, just excellent!

    Like

  25. I would like to consider the chance of saying thanks to you for the professional guidance
    I have always enjoyed viewing your site. We’re looking forward to
    the commencement of my college research and the general groundwork
    would never have been complete without visiting this site. If I could be of any help
    to others, I might be pleased to help by way of what I
    have gained from here. https://www.silicon-wristband.com

    Like

  26. I wɑs curious if you evdг considereⅾ changing the struсture
    of yοur blog? Itsѕ very welⅼ written; I love what youve got to say.
    But maybe you could a little morе in the way ⲟf contrent sso people ⅽould
    connect with it better. Youve got an awful lot
    of text for only һaving one or two imageѕ.
    Mabe you could space іt out better? http://cansoc.org/rental-mobil-di-pontianak-2018-terupdate/

    Like

  27. Does your blog have a contact page? I’m having trouble
    locating it but, I’d like to send you an e-mail. I’ve
    got some ideas for your blog you might be interested in hearing.
    Either way, great website and I look forward to seeing it develop over time.

    Like

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 )

Google+ photo

You are commenting using your Google+ 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 )

w

Connecting to %s