DislikedHello Emmanuel,
Please, what means double inside bar, in psychology of trader?
Best regards
vcaryIgnored
Inside Bars refer to post#2660. Good stuff shared by LazyLobster.
I use inside bar to detect price contractions.
Market volatility occurs in cycles and there will always be periods when both buyers and sellers will rest. These periods of rest will cause the market to contract before expanding again. The contractions are simply market sentiments when both buyers and sellers take stock of their positions before committing their next move. It is knowing the market cycling of contractions and expansion which will help traders identify when the ‘choppy’ period and trade this sort of market type.
Candlestick/Bar patterns are good way to look for the market contraction and expansion. Inside Bar and Outside Bar are just two bar patterns which are commonly use by traders. You will see these bar patterns in your charts in all different timeframes.
Traders have to design their trading system according to the market type they want to trade. The trading timeframe is important in any system design because the frequency and range of such contractions and expansion are different.
In my case, I trade short swings which last 2~3 days during the week and I do not hold positions over the weekends except under certain market conditions. I use the H4 timeframe and broker data set to GMT+0 for consistency.
But I do not simply trade any Inside Bar I see on my charts. What I look for is narrow ranged inside bars (NRIBs). On H4, I look for those IBs which formed within the most recent 4 bars, i.e. the IB must be the smallest of the last 3 bars and the maximum range is less than 2xATR(100) on H4. For example, if the H4 ATR(100) is 40pips, then the range of the 4 bars must be below 80pips. Beside this, the NRIB must be near a key support and resistance zone/level.
For more research into chart pattern trading:
Lookup books by author Thomas Bulkowski. This chap has done quite a lot of research into chart patterns.
He has a website: http://thepatternsite.com/index.html ... a wonderful place to be in when you have insomnia and not wanting to lay in bed counting sheep. ..
Kind regards,
ET
Honesty is a very expensive gift. You wont find it in cheap people.WBuffett