StrategiesInside Bar Breakout
⚡ BreakoutEasy
Inside Bar Breakout
The Inside Bar is a two-candle pattern where the second is completely 'inside' the first (lower high and higher low). It indicates consolidation/indecision. The Inside Bar breakout in the direction of the main trend often produces explosive moves.
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Typical R/R
1:2 — 1:4
Win Rate
45–55%
Timeframe
Daily, 4H
Category
Breakout
[ STRATEGY SCHEMA ]
[ MARKET LOGIC ]
During an Inside Bar, the market pauses: neither buyers nor sellers take control. This compression accumulates energy. When one side finally prevails and price exits the Inside Bar, the accumulated force produces a clean and sustained move. In trends, the Inside Bar acts as a 'pause' before continuation.
PROS
Visually simple setup to identify
Automatic entry with Stop Order
Great R/R in strong trends
CONS
Many false breakouts in sideways markets
Requires a clear trend to work
What are the setup conditions for Inside Bar Breakout?
1
Clear main trend on the higher timeframe2
A Mother Bar forms (large directional candle in the trend direction)3
The next candle is completely inside the Mother Bar (Inside Bar)4
Set Stop Buy orders above the Mother Bar's high (for long) and Stop Sell below the low (for short)5
The breakout in the main trend direction is the signalWhich filters improve the quality of the signal?
Clear trend on Daily: don't trade Inside Bars in sideways markets
The Mother Bar must be significant (not a small candle)
Low volume during the Inside Bar (normal) and high on the breakout
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[ RELATED CONTENT ]
Glossary:Breakout