Defining Bullish and Bearish Small Inside-Bar Patterns

Summary

This indicator identifies inside-bar formations in which the inner candle’s range is less than half the range of the preceding, wider candle. It then labels setups as bullish or bearish using candle direction and the inner candle’s position relative to the prior candle’s midpoint. In both cases, the inner candle’s high and low must remain within the preceding candle’s range, and the preceding candle must have the opposite direction from the inner candle.

The description provides separate condition sets for bullish and bearish patterns and says there are no user-configurable parameters. It is a price-action marker rather than a complete trading system: it does not specify entry timing, exits, position sizing, or risk management. No test results or evidence of predictive performance are included, so the pattern definitions alone do not establish that either setup has an edge.

Key ideas

• The indicator requires the inner candle’s range to be less than half the preceding candle’s range.
• Both pattern types require the inner candle to remain within the preceding candle’s high-low range.
• Bullish and bearish labels depend on candle direction and the inner candle’s relation to the prior midpoint.
• The pattern marker does not define trade management or demonstrate predictive performance.

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.