Small Inside Bar Indicator
The inside bar indicator is a suitable trading tool for identifying reversal and continuation signals based on an inside bar trading strategy.
Description
Small Inside Bar is one of the best trading strategies. It includes an inner stem and a mother stem. Essentially, a two bar formation involves an inside bar that forms inside the mother bar immediately preceding the bar. This means that the high of the inside bar must be lower than the high of the mother bar. Similarly, the low of the inside bar must be higher than the low of the mother bar. As a rule, the mother rod absorbs the inner rod.
A trading method can act as a continuation signal when price breaks above or below the high or low of the mother bar. Similarly, it acts as a reversal signal when it appears at a resistance or support level.
How to Trade the Small Inside Bar Indicator
In fact, the indicator does the main job of identifying the inside bar. You only need to place a buy trade above the mother bar’s high or a sell trade below the mother bar’s low. The best part is that the indicator alerts you when an inside bar is forming. The low of the inside bar is indicated by the green dot, and the red dot is the high.
Trading example
The chart shows the movement of the euro price against the US dollar. An inside bar forms within the low and high of the mother bar, giving a buy reversal signal. The indicator highlights the inside bar. Notice how the market experiences a sustained uptrend after the signal.
Conclusion
The inside bar alert helps you trade with an inside bar trading strategy. Essentially, it detects an inner rod within a parent rod. This allows you to identify an inside bar and quickly place a trade. It is a must-have tool for domestic trading.