Inside Bar Strategy

 

By definition, "Inside Bar" that length of between the low price and high price levels, which is smaller than previous bar's length of between the low price and high price levels. Here, the previous candle bar that includes the inside bar is also called the mother bar. As a level; The inside bar' s total length is between the low-high price levels of the mother bar.

In the inside bar formation, it can sometimes occur in the form of nested inside bars. In this case, if we connect the upper and lower levels of the nested bars from top to bottom, we get a triangular area (pennant). In order to benefit from Inside Bars more efficiently and not to take into account many fake inside bars, it would be more accurate to consider inside bars in time frames of at least 1 hour, 4 hours, 1 day and 1 week.

In the inside bar pattern, the area that between the mother bar's low and high price levels is the trading range. In other words, we can think of this area as the support-resistance area, that is, the sup-dem region. Price moves horizontally in this area for a certain period of time. Whenever the price breaks any of these low or high levels of the mother bar and closes the candle in a dominant upper time frame, then we can say that the price is likely to move in the direction of this breakout.

For example, in the inside bar formation, in the dominant time frame; Above the mother bar's high level, the price action with the candle closing is as in the picture below. Here, we can mention that the upward movement will most likely start. If we want to open a position in the long direction here, we should write our stop loss order just below the mother bar's low price level.