InsideBar

Inside bar is a two-candlestick pattern where the second candle (inside bar) has a high lower than the first candle’s high AND a low higher than the first candle’s low. This means the inside bar is completely contained within the “mother bar’s” range. Inside bars signal consolidation and potential breakout—traders watch for price to break the mother bar’s range.

How Inside Bars Form

Inside bars show range contraction:

Inside Bar Pattern:

Mother Bar:    Inside Bar:
    │              │
   ─┼─            ─┼─ ← Lower high
    │              │
   ┌─┐            ┌─┐
   │ │            │ │ ← Smaller body
   │ │            └─┘
   └─┘             │
    │             ─┼─ ← Higher low
    │

Inside bar's entire range is within mother bar.
Breakout above mother bar high = buy.
Breakout below mother bar low = sell.

Quick Reference: Inside Bar Signals

Setup	Condition	Trade
Bullish breakout	Price breaks above mother bar high	BUY
Bearish breakout	Price breaks below mother bar low	SELL
Multiple inside bars	2-3 inside bars	Stronger breakout expected
Inside bar at resistance	In downtrend	Bearish bias
Inside bar at support	In uptrend	Bullish bias

Example: Trading Inside Bar Breakout

Inside Bar at Support:

Day	High	Low	Pattern
1	$102	$95	Mother bar (large)
2	$100	$97	Inside bar
3	$103	$99	Breakout above $102, BUY
Stop	-	$95	Below mother bar low
Target	$110	-	Mother bar range projected

Inside Bar Variations

Single Inside Bar

One inside bar within mother bar. Standard setup.

Multiple Inside Bars

2-3 consecutive inside bars showing tight consolidation. Often leads to explosive breakout.

Inside Bar Doji

Inside bar with small body (indecision within indecision). Extra confirmation needed.

Hikkake Pattern

Inside bar followed by false breakout, then reversal. Trade the reversal direction.

Trading Strategies

Breakout Entry

Enter when price breaks above/below mother bar high/low. Most common approach.

50% Entry

Enter at 50% retracement of mother bar after inside bar forms. Tighter stop but less confirmation.

With Trend

Only take inside bar breakouts in direction of larger trend. Higher win rate.

At Key Levels

Inside bars at major S/R levels have higher reliability than random inside bars.

Entry and Exit Rules

Entry

• Conservative: Wait for close above/below mother bar
• Aggressive: Enter on break of mother bar high/low

Stop Loss

• Below mother bar low for longs
• Above mother bar high for shorts

Target

• Mother bar range projected from breakout
• Or next S/R level

Common Mistakes

1. Trading inside bars in chop – Need trending or key level context.

2. Ignoring the mother bar – Size and location of mother bar matters.

3. Too tight stops – Use mother bar range, not inside bar range.

4. No trend filter – Inside bars work best with trend, not against it.

How JournalPlus Tracks Inside Bars

JournalPlus lets you tag inside bar patterns at entry, tracking breakout success rates and helping optimize your inside bar trading strategy.