Inside Outside Combo:
This is a very interesting 2 Bar Pattern which can be used to take Trade Entries. We use the power of Inside bar and outside bar to execute this.
Firstly we need to know what is an Inside Bar. If the current bars high and low is within previous bars high and low we call the current bar as an Inside bar
Similarly for an Outside bar, we need the current bars high and low to be beyond the boundary of previous bar high and low . Look to the example Below
Examples:
When this happens with a combo that sets an Explosive move. Inside bars are generally trend trading patterns and outside bars are direction confirming patterns based on closed direction.
Inside outside combo Pattern:
In an IO ( Inside outside) pattern we need an inside bar setup, followed by an outside bar setup. Example is shown below.
The trade is placed as a stop order on respective outside bar levels based on the Context direction. If in a trending market we take in the direction of trend and if we get an IO pattern near resistance or support we take this as a reversal pattern. In case of resistance we look to sell below the low of the outside bar. Incase of support we look to go long above the high of the outside bar
If we look in the above example we can see clear IO pattern @ a resistance point. The stop loss will be the other side of the OB. IB is generally a compression or a pause at a major junction , when that is confirmed with directional OB the entry is beautiful. Now dont go in search of this pattern, if it happens and you find it, you can understand that it has a higher probability of winning.
I teach one to one trading course based on pure price action without any indicators etc; If you are interested feel free to get in touch at 7373339777 or 8508777733 (watsapp or call ) for more details.
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FAQs
What are the Inside Bar and Outside Bar? Inside and Outside Bars are two prevalent candlestick patterns in technical trading. The 'Inside Bar' is characterized by a bar or candle that is entirely 'inside' the range of the preceding one, whereas the 'Outside Bar' completely 'overshadows' or 'engulfs' the previous bar.
What is the 15 min inside bar strategy? ›
If you are a scalper, you can use the inside bar in a 15-minute timeframe or lower. Using this forex trading strategy, you look for the inside bar in an uptrend or downtrend, wait for the pattern to fully appear, and double-check the price action through an indicator or support/resistance levels.
Is an inside bar bullish or bearish? ›
Is an inside bar bullish or bearish? It does not inherently indicate a bullish or bearish bias. It simply represents a period of consolidation or indecision in the market. So, the formation occurring within an uptrend can be bullish and signal a trend continuation or bearish and signal a trend reversal.
What is the fakey pattern? ›
A Fakey pattern can have a pin bar as the false-break bar or not. The false-break bar might also be a two-bar pattern where the first bar closes outside the inside bar / mother bar range and then the subsequent bar completes the false-break by closing back within the range of the mother bar and (or) inside bar.
What is the inside bar strategy? ›
An “inside bar” pattern is a two-bar price action trading strategy in which the inside bar is smaller and within the high to low range of the prior bar, i.e. the high is lower than the previous bar's high, and the low is higher than the previous bar's low.
What is the inside bar pattern strategy? ›
An Inside Bar pattern is a two-bar price action trading strategy where the inside bar is smaller and within the high-low range of the previous bar (popularly known as mother bar).
Is Inside bar a good strategy? ›
Inside bar trading offers ideal stop-loss positions and helps identify strong breakout levels. You can create a successful risk management strategy and place successful trading orders with it.
What is the success rate of inside bar? ›
This pair caught 23 valid inside bar signals for the period, winning 19 positions or 79.17% of it all. That's even better than its previous 79.17% win rate in Q3, but did it catch bigger wins? Well, not exactly. The pair was able to rack up 238 pips or a 20.54% gain, just shy of the earlier 257-pip or 23.94% win in Q3.
How to use inside bar indicator? ›
As an entry strategy, traders look for Inside Bars in trending markets, interpreting them as a pause before potential continuation. A breakout above or below the Inside Bar's range serves as a signal to enter a trade, anticipating a price movement in the direction of the breakout.
What is the inside bar false breakout strategy? ›
A fakey pattern in the market means that a false-breakout of an inside bar pattern has occurred. In other words, a fakey is when price initially breaks one way from an inside bar pattern but then price snaps back the other direction, creating a false break of the inside bar structure.
The best way to be sure you don't get caught in a false-breakout from a trading range is to simply wait for price to close outside of the range for two days or more. If this happens, there's a good chance the range is finished and price is then going to start trending again.
What is the candle breakout strategy? ›
Master candle trading strategy is a breakout trading strategy. It allows you to determine a new range of price between the maximum and minimum of the candle. When the breakout happens, we can expect the price to move significantly towards the direction in which the breakout occurred.
What is inside bar pin bar combination? ›
1) The pin bar + inside bar combo, consists of a pin bar that consumes a small inside bar toward the nose of the pin (the pin bar's real body). 2) The inside pin bar combo setup is simply a pin bar that's also an inside bar. In other words, a pin bar that's within the range of an outside bar or mother bar.
What the pattern of bars represent? ›
A bar graph shows comparisons among discrete categories. One axis of the chart shows the specific categories being compared, and the other axis represents a measured value. Some bar graphs present bars clustered in groups of more than one, showing the values of more than one measured variable.
What are the patterns in a bar chart? ›
Bar charts usually present categorical variables, discrete variables or continuous variables grouped in class intervals. They consist of an axis and a series of labelled horizontal or vertical bars. The bars depict frequencies of different values of a variable or simply the different values themselves.
What is an outside bar in trading? ›
The outside bar trading pattern, also called an outside reversal, is a one bar bullish or bearish pattern that shows strong volatility in the instrument you are trading. Unlike the inside bar that is completely inside the previous bar, the outside bar candlestick takes out both the high and the low of the previous bar.
