Inside Bar? Outside Bar? Here’s What They Mean for Your Trade
If you’ve ever looked at a candlestick chart and seen a small candle sitting inside the range of the previous one—or a big one that breaks both above and below it—then you’ve spotted two key formations: the inside bar and the outside bar.
What Is an Inside Bar?
An inside bar occurs when the entire candle forms within the high and low of the previous candle. It shows indecision, compression, or a pause in the market.
Why it matters: Inside bars often signal a potential breakout. They can appear before major moves, giving observant traders a heads-up that something is building under the surface.
What Is an Outside Bar?
An outside bar is the opposite. It stretches beyond the high and low of the previous candle, creating a wide, engulfing move. This often means volatility—and possibly a change in trend or a false breakout.
Why it matters: Outside bars show a surge in activity. But they can also trap traders if not used in context.
So… How Do We Use Them?
At DennisRocke.com, we don’t rely on these patterns in isolation. Instead, we use them as part of a broader confirmation system. When they appear at one of our predefined interest points, they help verify whether a move is real or not.
We don’t guess. We wait for proof. That’s what makes our signal service clear, confident, and consistent.
Conclusion: Candles That Speak Volumes
Understanding inside and outside bars gives you a glimpse into market psychology. While they’re not the whole picture, they can sharpen your awareness and timing—especially when used as part of a reliable system.
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