Inside Bar Pattern Trading Strategy -- with David Moadel
hello friends and welcome to looking at the markets with David Modell today I'm
going to tell you the basics of the inside bar pattern and that also comes
with a trading strategy please note that none of these strategies work 100% of
the time okay so you want to make your own decisions and maybe use other
indicators with it for confirmation if you want to and by the way I'm gonna
give you this pattern but if you want help putting together a trading or
investing plan because you really should have a plan otherwise you don't know
where you're going and what you're doing you can email me for coaching at David
Modell at gmail.com alright so this is the inside bar pattern is a two
candlestick pattern in which the second of the two candlesticks is contained
within the first candlestick and that includes when I say contained within
that includes the wicks or shadows and so the first or bigger candlestick is
sometimes called the mother bar while the second or smaller candlestick is
sometimes called the inside bar so you see how when you include the the wicks
or shadows the second candlestick the smaller one is contained entirely within
the first one all right and so again second one's contained within the first
one alright or the inside bars contained within the the mother bar there
including the wicks or shadows alright and the colors of the two candles
candlesticks are not as important as just the fact that the second one's
contained within the first one that's called the inside bar pattern and if you
know about the haram ii and i do have a video on that yes this is similar to the
haram e to Candlestick to candlestick pattern though in my experience the
haram ii tends to focus on the body only of the
candlesticks while the inside bar pattern tends to focus on both the body
and the the wicks alright or shadows alright so that's that's the main
difference also in my experience the haram ii pattern tends to focus on
reversals you know so the candlesticks are going down down down and then the
her ami kurz and then they might go up up up
whereas the inside bar pattern tends to focus on continuations of the prevailing
trend and so you might have candlesticks going up up up and then a consolidation
period and you know with the inside bar pattern and then it continues upwards as
opposed to the Rami which tends to be more of a reversal pattern alright so
you can view the the inside bar pattern as a brief consolidation or pausing
period before the prevailing trend continues in that same direction so like
I said you know you could have candlesticks going up up up and then two
candlesticks an inside bar pattern going sideways and then it continues upwards
and it could also be the opposite the candles could be going down down down
and then to sideways ones you know the inside bar pattern and then continues
going down so what's the strategy that you could use and again it does not work
every time alright but to trade it you can draw a horizontal resistance line at
the top of the upper wicker shadow of the mother bar the first of the two
candlesticks then you can enter with a long position if a candlestick
decisively clearly closes above that resistance line with heavy volume so you
want to have some sort of volume indicator as well and your stop-loss can
be at the bottom of the lower wick or shadow of the mother bar all right so
here a couple of examples all right and so you've got the prevailing trend up up
up and then you've got two candlesticks in a row it just kind of takes a
breather going sideways but you have the second candlestick including the wicks
or shadows contained entirely within the first one alright and you could draw a
horizontal resistance line over here at the top like I said right if you want to
draw if you want to you know use this as a strategy you can draw a horizontal
resistance line at the top of the upper wicker shadow of the bigger one the
other bar okay and then the the stop-loss would be at the bottom of that
same candle the mother bar right so you know you like over here you could have
drawn a resistance line at the top of the the wick or shadow of the mother bar
and then a you know and that would if it breaks through it which it did here very
decisively but you know and we don't have the volume down here but if the
volume was strong which it probably would be for a candle this size then you
could take a long position and ride it all the way up we have another example
here and the stop-loss would be at the bottom it could be at the bottom of that
that mother bar as they call it the the first of the two candles all right put
the you know support I you know that that would be not just a support but
actually a stop loss there okay and then we have another example here of the
inside bar pattern this one is contained entirely within this one and it did work
it broke above it could have taken a long position it came down but it didn't
go past the stop-loss if you made a stop loss at the bottom of this wick or
shadow here of the first of the two candles so it didn't hit the stop loss
and it kept going up and that's good news
alright let's take a look at a real-life example here on tradingview dot-com you
can see it was going up gradually okay but then it took a breather and this
candle including the wick is contained entirely inside of this one so you have
the the pattern here the inside bar and then it went up up and away
alright it does not always work but you know it could work like that alright so
again if you want some more help you want some coaching on this I do offer
that it's David Modell at gmail.com you can hear my email me for the coaching
and if you like this video hey do me a favor please give it a thumbs up on
YouTube and that lets me know that you want to see more videos with strategies
and patterns like this one and leave a comment if you want to let me know what
you think of this pattern does it work have you tried it do you think it'll
work hey if you tried it let me know even if
you haven't tried it let me know what you think
and if you haven't subscribed to my channel yet why not do that right now
hit that subscribe button and hit that Bell the notification Bell on YouTube
that way you can receive updates from YouTube whenever I put out videos like
this one hey thanks a lot I really appreciate it I'll talk to you again
soon