Reading Forex charts: inside bar and engulfing bar

Among variety of Forex chart patterns and bar combinations, let's talk about such chart setup as "inside bar" and "engulfing bar".

Inside bar is a bar that has high, low and close all withing the body size of the previous bar.



Although this type of bar combination can be spotted on any time frame, Forex traders like to see it on at least hourly charts and more preferably on daily or weekly charts.

How to trade inside bar pattern?
Inside bar suggests accumulating power of the market that so far was not able to decide on further direction.
Traders should look for the breakout of the inside bar price range to either of the sides and trade in the direction of that breakout.

Engulfing bar is a bar that totally covers its preceding bar.



This bar can be seen in the beginning of a new trend and suggests about a serious strength of one side of the market that dominated and "created" such bar.

How to trade engulfing bar in Forex?

Once a pattern is spotted, and a candle is closed, take a trade in the direction of the engulfing bar.

Profitable Forex adventure!