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Candlestick patterns

The inside bar:a pause inside the last range.

An inside bar is a candle whose high and low both sit within the previous candle's range, which is called the mother bar. It shows a period of contraction: price did not extend beyond either side of the prior move. Traders watch for price to break the mother bar's high or low, and those breaks often fail.

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What makes an inside bar

Two candles are needed. The first, the mother bar, sets a range. The second is the inside bar: its high is lower than the mother bar's high and its low is higher than the mother bar's low. Colour does not matter - an inside bar can close up or down.

Several inside bars in a row inside the same mother bar are common in quiet conditions and make the range tighter still.

What it is taken to show

An inside bar is contraction: after a move, the market paused without testing either extreme. In a trend it is often read as a rest before continuation; at a support or resistance level it can be read as indecision before a turn. Which reading applies comes from the context, not from the bar.

Trading the break, and false breaks

The usual approach enters on a break of the mother bar's high or low, with a stop on the other side of the mother bar. Because the range is compressed, the stop can be relatively close.

Breaks of small ranges fail often. Price can trade just beyond the mother bar, trigger the entries waiting there, and reverse - a false break. Some traders enter only on a close beyond the range, accepting a worse price for more confirmation.

Step by step

How to identify it

Check the two candles against each other, not against how the chart looks.

  1. Mark the mother bar's high and low.
  2. Check that the next candle's high is below the mother bar's high and its low above the mother bar's low.
  3. Note the context: trend direction, and whether price is at a key level.
  4. Decide in advance what counts as a break - a trade through the level, or a close beyond it.

Worked example

The concept,walked through

An inside bar in an uptrend, described

An illustrative sequence in words, with round numbers standing in for price. It is not taken from any real instrument or date.

  1. 1. Mother barIn an uptrend, a candle ranges from 100 to 106.
  2. 2. Inside barThe next candle ranges from 102 to 105, entirely within it.
  3. 3. BreakThe following candle trades above 106, and a trader using the pattern buys with a stop below 100.

The break above 106 might have continued the trend or reversed back into the range. The inside bar supplied two levels and a stop location, not a direction.

Common mistakes

Where tradersgo wrong

Counting a bar that equals the mother bar's high or low

Most definitions require the inside bar to be strictly within the range; an equal extreme is a different shape.

Trading every inside bar

They are common, especially on low timeframes. Context decides which ones matter.

Stops inside the mother bar

A stop within the range is inside the noise the pattern describes.

Limitations

What it cannottell you

No chart concept predicts price. These are the limits worth keeping in view.

  • The pattern depends on the chart's timeframe and session boundaries.
  • There is no reliable evidence that inside-bar breaks predict direction; false breaks are common.

In an evaluation

Using it on asimulated account

On a $100,000 simulated account the daily loss limit is $3,000 on Instant or $5,000 on 1 Step and 2 Step. Pattern stops are often wide, so size from the stop distance first - risking something like $500 a trade - rather than from how clean the pattern looks.

Trading rule

What is the daily loss limit?

The ceiling on a day's losses - 3% on Instant and 5% on 1 Step and 2 Step.

Trading rule

Does slippage excuse a breach?

Breaks of tight ranges are fast, and fills can slip.

Trading rule

What is maximum drawdown?

The overall floor beneath the account.

Questions

Asked aboutthis concept

A candle whose high and low are both within the previous candle's range. The previous candle is called the mother bar.

Neither on its own. It shows contraction; traders read its direction from the trend and from which side of the mother bar price breaks.

Keep learning

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Sources

What this pagerelied on

  1. Inside days - Thomas Bulkowski, ThePatternSite. Retrieved 23 September 2026. The definition of an inside bar - a range wholly within the prior bar's range; statistics there are not repeated here.

Educational content only, not investment advice or a recommendation to trade. Chart concepts describe what price has done; none of them predicts what it will do, and trading any strategy can lose money. Get Funded Now accounts are simulated and trade virtual funds. Last reviewed 22 September 2026.

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