The Inside Bar is a two-candle pattern where the second candle's high and low are completely within the high and low of the first candle (the "mother bar"). It signals a pause or consolidation in the market — the market is "coiling" before its next significant move.

Inside Bar Structure

Mother Bar Inside Bar Mother high Mother low Breakout Buy above mother high Short below mother low

Inside Bar Breakout Strategy

Bullish Breakout:
Entry: Buy when price breaks above the Mother Bar high
Stop Loss: Below the Inside Bar low
Target: 1.5× to 2× the Mother Bar range

Bearish Breakout:
Entry: Short when price breaks below the Mother Bar low
Stop Loss: Above the Inside Bar high
Target: 1.5× to 2× the Mother Bar range below entry

Inside Bar in Trend vs Reversal

ContextMeaningTrade
After strong trend candlePause before continuationTrade breakout in trend direction
At major support/resistanceIndecision before reversalTrade breakout in reversal direction
Multiple inside bars in a rowTight consolidation — big move comingWait for breakout with volume
Inside Bars on NSE stocks after a gap-up or gap-down open are extremely reliable continuation signals. The gap shows conviction. The Inside Bar shows the market is digesting the move. The breakout confirms the next leg in the gap direction.