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Double Inside Bar – VertexFX

Wednesday, October 12, 2016 23:18
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Double Inside Bar is a Client Side VTL indicator. Double inside bar is a price action candles stick pattern where two inside bars form immediately. An inside bar is a bar whose high is less than the high of the previous bar and low is greater than the low of previous bar. The Double Inside bar pattern is two inside bars forming immediately.
Pattern detection rules are:
1 Price Bar 1 is an inside Bar.
2 Price Bar 2 is an inside Bar with price bars 3 and 4. (Bar 2 is inside the High low range of Bar 3 and Bar 4.)
See the chart with bar numbers. Note that second inside bar of the double inside bar pattern (bar number 2) is an inside bar with its preceding two bar high/low (bars 3 and 4).
The Double Inside bar pattern is marked in chart by the yellow up arrow. This pattern indicates consolidation and lack of volatility. Trading action is confined to a range during the formation of the last two bars in the pattern. The range is marked by the High and Low of Bar 2. After consolidation, breakout from this trading range will eventually occur. The Double inside bar pattern trading strategy uses this market behavior to open trades in the direction of breakout.

Trading the double inside bar pattern is really straight forward. Anticipating a breakout either up or down, place two pending stop orders few pips above the high/low of the FIRST inside bar’s mother bar, that is bar 2. See the chart attached. Once an order is triggered, the other order work as stop loss for the trade. Trailing stop loss can be applied to lock in the profits. The double inside bar pattern gives better results on higher time-frame charts.


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