The candles of the pattern are ringed. An invented chart, drawn to show the shape. Not market data.
Also searched asinside candle · inside day · mother bar · harami range
How to recognise an inside bar
- High below the previous high.
- Low above the previous low.
- The previous candle is usually large; the inside bar is a pause after it.
What it is taken to mean
It is read as the market drawing breath. Traders watch the high and low of the mother bar: a close beyond either is taken as the pause ending.
What traders check next
- Which way the price was going before the pause.
- Where the edges of the mother bar are, since they define the idea.
- How wide the mother bar is. A wide one puts a sensible stop a long way off.
Where people go wrong
- Trading the first poke beyond the mother bar, which often comes back (a false breakout).
- Seeing inside bars everywhere on very short time frames.
- Forgetting the spread when the range is small.
Questions people ask
- Inside bar or harami?
- They overlap. A harami compares bodies; an inside bar compares the whole range, wicks included.
- Which way does an inside bar break?
- It does not say. It marks a pause. The direction is whatever the price does next, and that is not known in advance.
The words on this page
An explanation for study. It is not advice, a recommendation or a forecast, and a pattern or a situation described here says nothing certain about what a price will do next.