Inside Bar Pattern Introduction
Price movement on a chart is examined in price action trading. You may use candlesticks to predict where prices will move next because they frequently form repeating patterns. The Inside Bar pattern is one illustration, which I will discuss with you today.
Two pricing bars make up the inside bar pattern. The fundamental criterion is that the second one should fit inside the first one, meaning that its high should be lower and its bottom should be higher than the first one. It may move up, down, or in the middle.
Most traders concur that the aforementioned is accurate. Some claim that two candles can have the same low or high, though.
The bars in the pattern (IB) are referred to as mother bar, MB, and inside bar.
When the price has stopped moving, it is shown by the inner bar. Such a delay frequently follows a forceful movement. The earlier course of action is then followed. It is occasionally possible to trade a change in trend using inner bar patterns. When this occurs, you should combine it with levels of support and resistance.
Trading the Inside Bar Pattern on Pocket Option
There are several techniques to trade the inner bar pattern. But these two are the most regularly employed.
When the market is trending in a particular direction, start by using the inside bar pattern. With the way things are going, you trade. You could hear the terms “breakout play” or “inside bar breakout”.
The “inside bar reversal” strategy, which involves trading against the trend, is another option. At crucial price levels (support or resistance), it is then traded.
Typically, traders place pending orders either above or below the mother bar. Let’s focus further on the areas where you ought to begin your trades.
Trading Inside Patterns with the Trend on the Pocket Option Platform
Opening a sell position during a downtrend
When the market is declining and you want to trade with the trend, you should open a sell position using the inside bar pattern. This is referred to as a “inside bar sell signal” when it occurs. This method can be applied to currency pairings (CFDs), but it may also be traded using fixed-time trades. Set a pending order immediately below the candle’s low at the bottom of the mother bar to execute a transaction.
Opening a buy position during an uptrend
“Inside Bar Buy Signal” will appear while the market is rising. Your pending order needs to be placed directly above the high value at the top of the mother bar.
You are probably going to witness a lot of inside bar patterns when there are strong trends. This presents you with numerous options to start a business.
Trading inside patterns against the trend on the Pocket Option platform
Opening a SELL position with the inside bar pattern and resistance level
The EUR/USD chart, which is seen below, is indicated with the resistance level. An inside bar pattern has developed at the resistance line during the rise. You should start a sell position since you trade in the opposite direction of what is happening right now. In this situation, you can also sell at a price just below Mother’s Low by using pending orders.
Opening a buy position with an inside bar pattern and support level
A support line has been formed for the NZDUSD pair on the second chart. At this pivotal level, an inside bar pattern has emerged, signaling a shift in the trend. You ought to open a buy position. Once more, you can utilize a pending order to position a purchase order right above the mother bar’s high value.
Key price levels where an inside bar pattern appears typically signal a significant surge upward. You stand a decent probability of succeeding in this endeavor.
Final Instructions for Trading the Inside Bar Pattern
The advice to “trade with the trend” is common. It is preferable to trade insider patterns in conjunction with the current trend in this situation as well, especially if you are new to trading. Reversal trading can be challenging, and you need some prior trading knowledge to accomplish it well.
The inside bar pattern performs best on charts with a 5 minute or longer time frame. Use it with candles that have not yet burned for one minute. There will be many false signals given to you in that brief period of time.
There may be additional inside bars after the mother bar. You can use one, two, three, or even four candles. The following one will be smaller than the previous one. They speak about protracted consolidation times. Usually, there is a pretty strong pause after that.
Watch the inside bar pattern after the pin bar pattern. It is critical to be able to recognize various patterns on the charts because they frequently provide erroneous signals.
First, try to trace the inside bar pattern on your Pocket Option sample account. Choose markets that are trending upward and place trades in that direction. This is not a surefire technique to make money, so don’t try it with real money. Be ready to experience loss, especially at first.
Let us know what you think about the inside bar technique in the comment box at the bottom of the website.
