- In this article you will learn;
- What is an inside bar?
- How to enter a trade using the inside bar strategy?
- Entry checklists for entering a trade.
- Where is my stop loss?
- The inside bar can be simply defined as highs and lows of the inside bar contained within the previous candle's range.
- Inside bar shows indecision in the market, hence there is a chance to break out that is either on the bull or bear side.
2.How to enter a trade using the inside bar strategy?
- Every inside bar is not a trading opportunity.
- There are two ways you make an entry in an inside bar,
- The break of the extreme bar.
- If a strong close above the extreme bar's high can be considered as a buying opportunity, and a strong close below the low of the extreme bar is a selling opportunity.
- If a strong close above the inside bar's high can be considered as a buying opportunity, and a strong close below the low of the inside bar is a selling opportunity.
- In this method, you may get an early entry, but there is chances of getting a false entry is high.
3.Entry checklists for entering a trade.
- Preferred entry is in a strong trending market, there are more chances to get a false entry in a range market.
- Accuracy can be increased if you trade after a breakout.
- Analyze on a bigger time frame.
The same chart on a lesser time frame may give you false information so observe the chart on a higher time.
4.Where is my stop loss?
- Stop-loss can be placed either at low or high of the extreme candle, or a distance below the low or distance above the high to avoid stop loss hunting.
- A proper and strict stop loss is advised during entering with an inside bar strategy.
