Internal bar Price Action setups

Define what is WB. This candle or bar, body (with shadows) is located within the High and Low of the previous candle (bar), which is called decisive.

Perhaps the formation of several WB after determining. Less setup is represented by candles, where each successive candle is in the range of the previous one. But such situations can be regarded as a stronger signal compared to the baseline.

If a trader sees a model WB, it is assumed that the price has potential and is ready for further movement on the current trend. This pattern of Price Action allows you to open positions with minimal risk.

Characteristics of the candles that arise with the trend

The inside bar setup may appear on upstream and downstream markets. Separately setup as the signal is rarely a reliable source of information. As in the case of pattern PinBar, for Inside Bar the necessary support, otherwise it will be a regular candlestick combination.

As a basis for prediction, you can use the levels of support/resistance, Fibonacci levels, trend lines - i.e. the same signals as in the case of Pilbara. Let's look at an analysis of the situation, when the WB, and the graph are the moving averages. I advise you to use EMA periods 8 and 21, applied to a Close.

Fig.2

During the formation of the WB strictly under the moving and candles in front of him was touched averages and departed from them, it can be argued that the downward trend. If WB was formed above the moving average and the previous candle was pushed off the averages, we have an upward trend. It is recognized and the intersection of the SS, which precedes the appearance of this pattern and confirms the change of trend.

In figure 2 we see the WB, which was formed before crossing the SS. Thus, the market is saving his strength for a pulse. Then follows the intersection of moving, after which again, there are several internal bars. This says a new impulse, and the market continues to fall.

How is trading inside bar

Waiting for the WB, and then using additional indicators to check whether for a given pattern fulcrum. If Yes - open the deal. I advise you to use pending orders.

If the market trend is downward, and Inside Bar says about its sequel, set a Sell Stop a few pips below the Low of the defining candles. Recall that this candle in front of the bar. If the market is “change your mind” and make a turn, the pending item does not work - removed.

Fig.3

Stop Loss is better to install on a few points above the High defining candles. If the latter is too long, it is reasonable to set the stop at half or 1/3 of its length, since the size of the foot should be minimal.

TakeProfit can be placed at the nearest support/resistance or partially close a position at these levels.

The pattern of the inner bar may appear at the base of the trend, which indicates the spread, then you need to accept it as a signal to exit the position.

For an uptrend are all the same but mirrored.

Thus, the pattern of WB can be a signal that confirms the current trend, and to indicate a trend reversal. For a more precise definition is advised to use the horizontal levels, and to note whether the WB on an important level, which can bounce price.

For automatic detection of the pattern Inside Bar, you can use ready-made indicators (templates): read the article “Indicator Price Action”. Happy trading!