Inside Bars and Compression
A market that’s coiling gives off a specific look before it moves, each swing a little smaller than the last, as if the energy behind the price is running out of room in both directions at once. Traders who learn to spot that shrinking range early get to position before the release, instead of chasing it after the fact. What an inside bar is An inside bar is a candle whose entire range, high to low, sits inside the range of the candle before it. One inside bar on its own doesn’t say much, it happens constantly and most of the time it’s just noise. A run of two or three in a row, each one tighter than the last, is the more useful pattern, showing the range contracting instead of one quiet candle sitting in an otherwise normal sequence. ...