Inside bar: what it is and how to spot one

What an inside bar is

An inside bar is a two-candle candlestick pattern. The second candle’s high and low both sit within the high and low of the first. It’s called “inside” because the whole candle, wicks included, is inside the one before.

Traders call the first candle the mother bar. The name comes from bar charts, where each stretch of time is a bar, not a candle, but it means the same thing.

In plain words, an inside bar is a candle where price didn’t go beyond the last candle’s high or low. Many traders read it as a pause. It describes what happened in that candle. It doesn’t say which way price goes next.

How to identify an inside bar, step by step

Only the highs and lows decide it. The opens, the closes, the colours and the size of the bodies don’t matter.

Inside bars after a rise and after a fall

An inside bar has no direction of its own. It can come after a rise or a fall, and it can be green or red. Some traders call one after a rise a bullish inside bar and one after a fall a bearish inside bar, but those names describe the move before it, not the inside bar.

On a daily chart, an inside bar is often called an inside day: a day whose high and low stayed within the day before.

What counts, and what doesn’t

Equal highs or lows. Definitions differ. Many count a candle whose high or low exactly matches the mother bar’s, and Wildflower’s Indicator does too. Some only count a candle that stays strictly inside. It’s your call.

One point out is out. If the high goes above the mother bar’s high, even by one tick, it isn’t an inside bar.

Wicks count, not bodies. A candle whose body sits inside the last body, but whose wick pokes out, isn’t an inside bar. That’s closer to a harami, which only compares bodies.

Timeframe matters. A 5-minute inside bar can be part of a 15-minute candle that isn’t one. Each chart has its own.

Inside bar breakout: what traders watch after one

Many traders mark an inside bar and then watch for price to leave it. That’s an inside bar breakout. In the pictures, the solid green lines are the inside bar’s high and low, and the dashed line is the mother bar’s high. Traders set it up in different ways:

• Which range. Some watch the inside bar’s own high and low. Others wait for price to leave the mother bar’s wider range.
• Close or touch. Some count a candle that closes past the level. Others count any trade past it, even a wick.
• How far past. Some ask for a set number of ticks beyond the level, so a close a hair past doesn’t count.
• How long to wait. Some only count a break within a set number of candles after the inside bar.

Each of these is a choice. A break can go either way, and a break in one direction can be followed by a move the other way. The pattern doesn’t tell you which will happen.

Several inside bars in a row

Sometimes two, three or more candles in a row stay inside the same mother bar. There are two ways to count them:

Each inside the mother bar. Every candle stays within the first candle’s high and low. A candle can poke past the one just before it and still count.

Each inside the one before. Every candle fits inside the candle just before it, so the range gets narrower each time. This is stricter.

The two can give different counts on the same chart, so it helps to decide which one you mean before you look.

Often confused with

Outside bar. The opposite: a candle whose high is above the last high and whose low is below the last low. Read about outside bars.

Harami. A candle whose body sits inside the last candle’s body. It ignores the wicks, so a harami isn’t always an inside bar. Read about the harami.

Narrow range bar (NR4 or NR7). A candle whose high-to-low range is the smallest of the last four or seven. It’s about size, not position, so it doesn’t have to sit inside anything. Read about narrow range bars.

Engulfing candle. A candle whose body covers the whole body of the one before. Read about engulfing candles.

Inside bar indicator for TradingView

Have every inside bar breakout marked, to your own rules

Tell Wildflower’s Indicator what you want in plain words, like “mark it when a candle closes above an inside bar’s high or below its low”. It uses the inside bar’s own high and low, counts an equal high or low as inside, and asks within how many candles after the inside bar the close must come. You type every number. It can’t count a run of inside bars or watch the mother bar’s range instead. It marks every one on a chart so you can check it matches your rules, then gives you a script to add to TradingView, with a step-by-step guide.

Try it free. You only pay when you add it to TradingView.

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Common questions

Related

• Engulfing candle
• How to read candlesticks
• Glossary

In the help centre

• Build an indicator in your own words
• Add your indicator to TradingView
• The candle pattern gate