Inside bar
A candle contained entirely by the one before it
What it is
A candle whose high is below the previous high and whose low is above the previous low. Everything that happened in this period happened inside the range of the last one.
What it may suggest
A pause, and a narrowing of the range. Because both boundaries are known, it is one of the few candle shapes that gives you a defined level in each direction rather than a direction.
Where it fails
It says nothing about which way the break goes, and it is the single most common candle on any chart — most inside bars are simply a quiet period. Treating one as a direction is reading a decision into an absence of one.
Also called inside candle, inside day, harami.
More candlesticks
- DojiOpen and close nearly equal: indecision
- HammerLong lower wick, small body up top
- Shooting starLong upper wick, small body at the bottom
- Bullish engulfingAn up candle that swallows the previous down candle
- Bearish engulfingA down candle that swallows the previous up candle
- MarubozuFull body, almost no wicks: one-sided period
ChartPeak is an educational tool. It is not financial advice and does not make investment recommendations. Trading carries a risk of loss, and past performance does not indicate future results. Do your own research.
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