A small candle tucked entirely inside the prior one. The next bar usually says which way it breaks.
“Context comes before the pattern. Trade an inside bar after a genuine directional move, not in the middle of a wide, choppy range.”Jason Parker · Founder, TradeScalping.com
An inside bar is a candle whose entire high-to-low range sits inside the prior candle's range. It's a contraction, a moment where the market can't decide, and contractions tend to resolve with more energy than they held. This setup doesn't care which direction it breaks. It cares that the range was tight enough to matter.
| Entry | Break of the inside bar's high or low, whichever direction it goes first |
| Exit | 1.5x to 2x the inside bar's own range, or the width of the candle it sits inside |
| Stop | Opposite side of the inside bar |
An illustrative example built to show the setup’s shape. Not historical price data, and not tied to any specific ticker.
An inside bar in the middle of a wide, choppy range is noise wearing a pattern's name. This setup works best after a genuine directional move, where the contraction is actually a pause rather than the market's normal resting state. Context first, pattern second.
None of this works without the framework underneath it. Read risk management next, or run your own numbers in the position-size calculator.
Common questions about trading this setup, answered straight.
An inside bar is a candle whose entire high-to-low range sits inside the prior candle's range. Entry comes on a break of that inside bar's high or low, whichever direction the market goes first, since the setup doesn't predict direction, only that a tight enough range is set up to break.
The stop sits on the opposite side of the inside bar. The target runs 1.5x to 2x the inside bar's own range, or the width of the candle it sits inside, whichever gives a cleaner level to work with.
An inside bar sitting in the middle of a wide, choppy range is noise wearing a pattern's name. The setup works best after a genuine directional move, where the contraction is an actual pause rather than the market's normal resting state.
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