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Inside Bars

Inside day breakout direction, continuation rates, and next-day behavior

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Inside Bars — Strategy Guide

Inside Day Consolidation

An inside bar/day is when the entire range is contained within the prior bar's range. This represents consolidation and energy building — the subsequent breakout often produces a strong directional move.

Key Metrics

Breakout Direction — Whether the inside bar breaks upward or downward. The direction of the prior trend influences breakout direction (65-70% continuation).

Breakout Magnitude — The average move size after breaking the inside bar range. Typically 1.2-1.5x the inside bar range.

Multiple Inside Bars — Two or more consecutive inside bars increase the breakout magnitude — more compression = more energy.

Trading Strategy

Place entry orders above and below the inside bar range. When one triggers, the other becomes your stop. Target 1.5x the inside bar range for the first target. The breakout direction will align with the prior trend about 65% of the time.

Pro Tip

Inside bars at key levels (VPOC, PDH/PDL, value area edges) are higher quality than inside bars in the middle of a range. The compression at a significant level creates an even more explosive breakout.

Fair Value Gap

Outside Days