Nowadays many chart patterns are performed in the market. In this post, we will learn how the three inside bars work in the market for reversal. Its very a unique chart pattern and it performs sometimes in the market. This chart pattern is a combination of multiple candlesticks and every candle has different colours from each other.
The Inside bar chart pattern is a very famous rather than this chart pattern but it’s not famous like that chart pattern because it’s a part of the strategy in the market. This strategy follows the pure naked price action in the market on the chart and it is based on the combination of candls. It’s a bit different from the Inside bar.
The inside bar has a long mother candle but it has three candles. It performs at the top or bottom in the market. Sometimes it also performs in the middle of the market, indicating that the market will continue and can move on either side.
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How Three Inside Bar perform
This is different from the Inside bar because the inside bar has three candles that do not break low of another candle. This chart pattern consists of three consecutive candles that do not break the high and low of another candle. Those candles performed under each other.
It’s time to know, how that chart pattern is performed. Firstly this chart pattern has three consecutively candles conducted under the mother candle like the Inside bar. This chart pattern perfrom on both places of the market like top and bottom.
Traders should understand about that chart pattern formation. Everything depends on the formation, If the chart pattern has not formed on the top or bottom we will lose a good enough momentum in the market. After the formation of that chart pattern, the market shone like a star.
How to trade the Three Inside Bar
Now the time has come to know how to trade three Inside bar chart patterns. Firstly, you should have some information about the formation of the place where the chart pattern performs. If the chart pattern has performed on the top after you should wait for your desired setup.
After the formation of that chart pattern, you should wait for the breakdown from the top or breakout from the bottom. If the chart pattern has a breakdown from the top then you should wait for the wait to break mother candle low means wait for the breakdown for the big prior candle that covered the two candles inside.
If the market, breakout from downside to upside the market. Then you should wait for the big prior candle that covers the two candles inside. The three inside bar candles are good for new traders because new traders can easily find out the chart pattern without performing any technical analysis.
Because this chart pattern has a simple formation. The first candle is the big bar candle that closes it near high or low, one more candle is just closed under the previous candle, and immediately one more new candle is performed under the last two candles.
Those candles perform shape like triangles. Traders must consider the formation of the candles. If any other candle breaks the high or low of these three inside bar chart pattern candles. Then the chance is very high to move the market on either side.
So Traders must focus on the formation of the chart pattern. Because that chart pattern is not popular like other candlestick chart patterns it has different behavior in the market.
How to trade with Three Inside Bar
Who doesn’t want to trade that chart pattern because it performs sometime in the market? So it has a different view to see by trader and it is the combination of the candles.
Now we want to teach you well how to trade this chart pattern in the market. First of all, you must check the formation of this chart pattern, after formation you can go for the trade.
On these three inside bar chart patterns, you can trade on the high or low chart pattern. If the market breaks the pattern high and the pattern formed on the bottom you can sit for the top side. On the other way, you should wait for the break high or low of the second candle that is performed under the mother candle.
After entering the trade, put your stop loss below and above the mother candle. You should take your profit at least two times from your entry. Don’t adjust your stop loss just trail it. Some of the traders I have seen in the market who don’t use stop loss with the habit of this bear the huge loss. So traders shouldn’t trade without stop loss.
How three inside bars are different from the Inside bar
If we compare two famous chart patterns inside the bar and three inside bar. Then both chart patterns are not more different and have different formations. That makes them different from each other.
Both chart patterns work for a reversal, but one has a huge mother candle and four consecutive candles that break inside bar low. In this chart pattern, the trader put their trade on the low of the Inside bar.
In three inside bar have a different formation. It has a huge mother candle that covers two more candles that don’t break the high or low of each candle. The trader can put the trade on the breakdown of the second candle.
For more deep knowledge you can read our dedicated post that is already on our website.