Inside Bar Trading Strategy: Demand Zone Setup
(A) What is a Bearish Inside Bar Candle?
1) An Inside Bar candle is formed exclusively inside the range of the previous candle, called the mother candle.
2) A Bearish Inside Bar appears when the inside candle is red (bearish), and the high and low would be contained within the range of the previous bullish or bearish candle.
3) The formation of a Bearish Inside Bar in stocks (e.g., Reliance, HDFC Bank), indices (e.g., Nifty, Nifty Bank), forex (e.g., EURUSD, USDJPY), or cryptocurrency (e.g., Bitcoin) indicates a probable reversal or pause in the current trend.
(B) Timeframes Used For Inside Bar Strategy
1) Minimum: 5 Minutes
2) Maximum: 1 Day
Quick - Willing to learn about the most suitable Time Frame in Intraday or Swing Trading?
Solution - Connect with experts today. WhatApp or Call at +91 8130827300
(C) What is a Bearish Inside Bar Failure?
A bearish inside bar failure happens when :
1) The price tries to be below the low of the inside bar but is above the high of the mother candle.
2) This might be a sign of strength or bullishness and the price can move upward, especially in assets such as stocks-relations, HDFC Bank - Nifty, forex-EURUSD, USDJPY.
(D) Rules of the Strategy
1) Inside Bar Failure: Find a Bearish One
(a) Observe a Bearish Inside Bar pattern on the chart. For example, if either Bitcoin or Reliance forms a bearish inside bar, it might be a consolidation or reversal pattern.
(b) Failure-Price First attempt to go below the inside bar and then go beyond the upper side of the mother candle. So, such a failure is very strong for fx pairs like EURUSD or USDJPY and even Indian Stock Market Indices like Nifty Bank.
2) Identify the inside bar as a zone of demand
(a) When the Bearish Inside Bar fails, highlight the range of the inside candle both high and low as a demand zone.
(b) This demand zone is a potential area where buying interest is likely to recover, which can be applied to both stocks, for example, HDFC Bank and cryptocurrencies, like Bitcoin.
3) Buy assets when the price returns to the demand zone
(a) Once inside bar candle is marked as a demand zone, then wait for the price return or retracement to that zone once again.
(b) Buy trade when the price revisits the demand zone: Now, assuming that buyers will try to push the price upward in stocks like Reliance, forex pairs like USDJPY, or Bitcoin, etc.
4) Set Stop Loss
(a) Learn how and where to put your Stop Losses. Connect with experts today.
(b) It is a precaution to secure the trade in case of a reversal of market prices against the anticipated direction whether in forex like EURUSD or stocks like Reliance.
5) Target the next resistance level or set up a risk-reward ratio
(a) Set your take-profit target at the next resistance level or based on a positive risk-to-reward ratio, for example 1.5 times to 2 times the risk.
(b) This includes equities, for example, HDFC Bank; market indices, for example, Nifty; and digital currencies, for example, Bitcoin.
(E) YouTube Video
Watch our video on Inside Bar Candlestick Trading Strategy
Link : https://youtu.be/U6OeSHQs9po?feature=share
(F) Frequently Asked Questions (FAQs)
1) What is a Bearish Inside Bar Candle?
- A Bearish Inside Bar is when an entire red candle is engulfed within the previous candle. It is a possible reversal or consolidation.
- To become good at this and other patterns, check out the FX Careers Technical Analysis Course on stocks and forex. Connect with experts today.
2) What is a Bearish Inside Bar Failure?
- Failure: It is established when the price goes below the inside bar's lowest point, then turns above the previous candle's highest point. It may be considered as a possible sign of bullish reversal.
- Learn how to recognize those setups in stocks and forex by attending the FX Careers Technical Analysis Course. Connect with experts today.
3) What is the best time frame for using the Inside Bar Strategy?
- The Inside Bar works on timeframes of 5-minute charts right up to daily charts. The strategy is flexible in terms of your trading style.
- Discover when to apply it using the FX Careers Technical Analysis Course across timeframes. Connect with experts today.
4) How do I apply the Inside Bar Strategy in a risk-controlled manner?
- Learn how and where to put your Stop Losses. Connect with experts today. WhatApp or Call at +91 8130827300.
- FX Careers Technical Analysis Course: effective risk management in stocks, forex, and so on.