Insights Of Inside Bar Indicator MT4
Hello again! Last time we published our proven best forex indicators article. There are different types of forex traders, with each using the indicator that best suits their style and personality. While top 10 mt4 indicators do not have all the magic wands that a trader requires to make the best out of the market, they sure contribute in one way or the other to the success and profits that the trader makes in the long run. As a trader who uses the bar patterns, one of the tools you will find handy is the Inside Bar Indicator MT4. With the indicator, you can easily spot the inside bar patterns on your trading chart.
What is an Inside Bar Pattern?
An inside bar pattern is a reversal pattern that forms when the preceding bar high and low engulfs the second candle. It is comparable to the bullish or a bearish harami candlestick pattern. The pattern is equally identifiable on the candlestick chart.
The inside bar pattern is created when the market sentiment or price is positioned in a single direction. The existence of the inside bar shows the unwillingness of the buyers and sellers to push the price over or beneath the preceding candle’s high and low. It means that the market is hesitant.
It is easy to use the Inside Bar Indicator MT4. Traders that love to trade the bar patterns find the indicator quite useful. The indicator is fitted with alert features, such as MT4 alerts and emails, and it functions properly on all the timeframes. You can plot the inside bars depending on the closed candles only.
The time to find the inside bars is 1 hour.
The color pattern by default is Red and Green. However, you can alter the color to suit your desire.
Components of an Inside Bar Pattern in Forex
An inside bar is a two-bar pattern and can be a bullish or bearish pattern.
Bullish Inside Bar Pattern
A bullish inside bar pattern consists of two candlesticks:
1. The first candlestick, which is occasionally referred to as the mother bar, is bearish.
2. The second candlestick is bullish.
3. The second bullish candlestick is created inside the shadow of the mother bar.
Bearish Inside Bar Pattern
A bearish inside bar equally consists of two candlesticks:
The first candlestick, otherwise known as the mother bar is bullish.
The second candlestick is bearish. It is confined to the inside of the high and low (range) of the mother bar.
Reasons for trading Inside Bar Patterns in Forex
Forex traders make use of the Inside Bar Indicator MT4 for one main reason.
1. Inside bar reveals a time of consolidation in the market.
2. You are probably going to see a “triangular” chart pattern if you were to see an inside bar pattern every day and if you were to change to a lesser timeframe like an hour or 30 minutes chart just to have a feel of what it is like as.
3. Most of the times, the inside bars are created following a strong movement of price, as price consolidates or pauses before creating the next move in the same path.
4. Inside bars can equally be created on key support and resistance levels, and this can imply a market tendency towards reversal (change in course).
How the Inside Bar Indicator MT4 Works
1. Inside Bar Indicator displays inside bars that form on your charts. It displays inside bars in all timeframes.
2. The indicator displays all the inside bars that are created in any forex chart, from monthly to the 1-minute timeframe.
The USDJPY 4HR chart below shows you the way this indicator works:
1. You will see a red rectangle if there is a formation of an inside bar pattern and price breaks it to the downside.
2. You will see a blue rectangle if there is a formation of an inside bar pattern and price breaks it upside.
How to Trade With the Inside Bar Indicator
You will notice the inside bar pattern on the charts frequently. However, its presence does not mean we should automatically start trading. It is only when the pattern is present at significant support/resistance area, close to the trend line, Fibonacci levels, or pivot levels should we go ahead and trade.
The majority of the professional traders are certain that the pattern functions when it is created at 61.8% Fibonacci levels. You can get a proper trading entry if you use it with the best volume indicator off course.
Ensure that the market is in an upward direction if you are attempting to search for buying opportunities. The bullish trend can be recognized using several indicators. We recommend that you decide the direction of the trend, using the moving averages.
It is dangerous for a trader to buy when the Inside Bar Indicator MT4 shows an uptrend. Instead, you should take the buy from the ensuing candle after waiting for the market to get to a significant support level, and when the inside bar pattern is created at main support.
Your stop loss should be positioned beneath the low of the inside bar. You should as well search for, and exit your buy trade at the major resistance level.
The position of the market was at the major support area in the GBPNZD chart above. The inside bar pattern was equally printed at the same place. What this translates to is that it is the ideal time for us to take a buy.
There would be a positive 400 pip move in the market by the time we have activated our trade. It is advisable to trade the inside bar based on the market conditions, to earn a regular income. The Inside Bar Indicator does not allow you to scale your position since all the locations on the charts are printed.
A market trend in a downward direction presents you with selling opportunities. With the help of indicators, it is easy to recognize the bearish trend. One of those tools that come handy in deciding the trend direction is the moving averages.
You should take the sell trade when the Inside Bar Indicator identifies the inside bar pattern after the market attains a major resistance level. Your stop loss should be inserted beneath the low of the inside bar. Exit the trade when you see the major support level.
The above CADJPY chart shows the market that was in a downtrend. There was a holding of the price at the major resistance level. From the chart, the market printed the inside bar pattern, signaling that we should activate our sell trade.
Consequently, this forex pair dropped close to 100 pips in a few hours. Following the formation of the inside bar pattern, there was a violent sell move. We should anticipate 4:1 or 5:1 trade, though the indicator naturally allows us fewer trades.
How to Install the Inside Bar Indicator
Installing the indicator typically takes a few minutes to do. You need to take the following steps:
1. Download the indicator.
2. Extract from the zip or rar file.
3. Copy the Inside Bar Indicator mq4 to MetaTrader Directory/experts/indicators.
4. Start your MetaTrader 4 client again.
5. As you are about testing your indicator, choose chart and timeframe.
6. Look for “Custom Indicators” in your navigator. It should typically be on the left in your MetaTrader Client.
7. Right-click on the Inside Bar Indicator.
8. Assign to a chart.
9. Adjust the settings or click “OK.”
You now have the indicator on the chart.
How to uninstall the indicator
To remove the indicator, do the following:
1. Choose the chart where the indicator is running in MetaTrader Client.
2. Right-click inside the Chart “Indicators list.”
3. Select the indicator. Delete it, and it would be gone.
Conclusion Of Inside Bar Indicator MT4
A lot of care is required when using the Inside Bar Indicator since the mere presence of the pattern does not usually mean we should start trading. However, when fully understood, it can be a great tool to help you study market trends and take the right trading steps at the right time.
This site also has several other indicators and tools that you can rely on to take your trading to the next level, so take a look through this link with what we have and then choose the tool that is suitable for your trading needs.
And of course, share your opinion with us on this indicator in the comment section below: