Today in this post, we are going to learn about bullish inside bars. This is the bullish chart pattern and belongs to the candlestick chart pattern category. It indicates that the market can change its direction from down to upside. Because if we track bullish inside bar candlestick in the past we will find some positive results.
The bullish inside bar works like a hammer or hanging man, which are reversal chart patterns. Bullish inside the bar looks like a mother is holding her kid and walking around the ground. The same conditions are formed on the chart. We will see the example how what the bullish inside bar looks like.
The bullish inside bar is a trading strategy that involves finding the candlestick chart pattern in the market for upward price movement. There are probability that after the formation market will go upside down and give profit to traders. It’s a bullish chart pattern and it’s totally against a bearish chart pattern. So after bullish engulfing, we can understand that the market has no seller power, the market can reverse at any time from that point.
Table of Contents
How to Recognize Bullish Inside Bar Chart Pattern
Now point to come how to recognize a bullish inside bar chart pattern. Because there are many imposters found in the market like that. If you are searching for a perfect inside bar then that post is for you.
One thing to keep in mind while searching Bullish Inside Bar. The bullish inside bar has a Long bearish candle and immediately it has a bullish candle that covers around 20% of the bearish candle.
After forming a long bear and small bullish candle you should wait for another 2 candles that give close above the long bearish candle. But one thing you must consider all candles must be the same colour. If any candle is made in opposite colour then this chart pattern will not work.
Bullish inside bar is a combination of 4 or more than 4 candlestick combinations. If you don’t see the proper combination of the candlesticks then maybe it’s not work. It most indicates the seller power has gone down and now turns buyers to move up the market. It’s the opposite of the bearish inside bar.
Planning Trade on inside bar Entry and Exit
in this section, we are going to learn more about how to plan trade on behalf of the inside bar chart pattern. You know very well every chart pattern has a different role in the market and they play their role according to formation. Here we learn about how to enter and exit from the trade.
We know as well that without planning we are blind. If our plan is prepared and the chart sheet is ready then more than 30% work is completed. Many traders are not habitual like that.
How to take entry on it -=- Now come to know how to take entry on this chart pattern. First of all, you should check how the chart pattern is formed. If the inside chart pattern has a big bear candle and three consecutive bullish candles that cover a big red candle then you can move for a buying position.
If the big red candle is formed and the next green candle is covering more than 50% of the red candle body then you should not take entry.
If a big bearish candle is performed and the green candle covers 30% according to the condition but after the green candle a red candle is performed then you should not take entry. Because it’s not fulfilling our condition in the market
How to take the exit on it -=- Exit is the important part for every trader. If traders don’t book their profit or loss on time then how trader will survive in the market for a long time? The market does not have any emotion but if you play safe with the market and follow proper setup while trading then you can survive in the market for a long time.
Here in the market, 2 types of exit One is By Stop Loss and the second is by take profit. Traders must follow both if he/she wants to exit from the trade.
Take Profit – who doesn’t want to take profit from the market and become a profitable trader? If you are looking for how to make a profit in the market then you should follow the proper formation of an inside bar chart pattern. If the chart pattern is formed according to our condition then you can book your profit at least two times from your entry.
Some traders follow each risk-reward ratio for profit booking. Because on the inside bar, they have a big stop loss and small profit probability. So that is the main reason to follow each one risk-reward ratio.
How to set stop loss – Now point to come learn about how to set stop loss on that chat pattern. We know well trade without a stop loss is driving a car without a brake on the road. If you don’t trade without stop loss then there is a chance to wipe out your capital.
So you must do trade with proper and predife stop loss. Now it’s time to learn a lesson about how to set a proper stop loss in the market.
First of all, You must check the low of the mother candle and formation and it’s low. The baby candle does not break the law of the mother candle and after inspection of all of these, you place your stop loss low on the inside bar.
The important thing to consider to find the Bullish Inside bar chart pattern
Here I’m going to light up how we can find the bullish insidebar chart pattern is more realible.
- This chart pattern works well if it’s formed on the bottom or new swing low.
- The inside bar performs well on the key of support level or pullback.
- If the inside bar formed after a strong bearish momentum then its reliability rises more.
- This chart pattern does not work every time, but with the help of this traders can identify the turning point of the market.
- Traders can Improve accuracy with the help of technical analysis and make sure to trade on this chart pattern.
