1: Inside bar pattern of an inverted ascending triangle
Example with CHF/JPY:
Look at the Inside Bar example formed inside an inverted ascending triangle. Let’s place a buy stop order on the intraday high here at 123.68 with profit target at 126.00 (triangle top), stop loss would be set at 122.70. The reward/risk ratio in this trade is 2.3:1. Pretty good.
2: Inside Bar pattern with descending triangle pattern
Price Pattern: After the descending triangle is broken, the price line forms an Inside Bar.
We will place a sell stop order below the low of the small candle. If there is no match after a few hours, the order is considered canceled
Profit Target and Stop Loss: Stop loss and take profit should be set at a price that gives you an acceptable profit or stop loss ratio.
Example with GBP/USD:
After the pair of Inside Bar candlesticks formed. Place a sell stop order below the low of the small bar at 1.5080 with a profit target at 1.4900 (low of the big bar). Stop Loss is placed at the top of the Inside Bar i.e. at 1.5150. The reward/risk ratio is 2.6:1. In the safe zone to manage your capital.
3: Double Bottom and Inside Bar pattern
Example with GBP/USD:
The inside bar is formed when the price touches the sloping neckline of the double bottom. We place a buy stop order slightly above the intraday high of 1.5188 with a profit target around 1.5525 (next resistance) and a stop loss below the intraday low of 1.15100. The reward/risk ratio is 3.9:1.
4: Price bar reversed in flag pattern
Example with EUR/JPY:
After a strong bullish bar from 129.50 to 134.50, a corrective flag pattern appeared. A reversal candle appeared at the bottom of the flag pattern. We place a buy stop order slightly above the top of 133.25 with a profit target around 135.00 (next resistance). Stop loss is placed below the bottom of the reversal candle at 132.50. In this case, the reward/risk ratio is 2.3:1.
5: Double top/bottom and support and resistance pattern
Example with AUD/USD:
Pattern two is formed in the 0.6900 zone. The price then broke out of the pattern to the upside but stopped at the 0.7400 resistance. After a downward correction from the resistance area, the price will form an Inside Bar. We will place a buy stop above the intraday high of 0.7197, targeting the 0.7400 resistance. Stop loss is placed below the intraday low of 0.7110. The reward/risk ratio is 2.3:1.
6: 2 top/bottom and isosceles triangle pattern
Price Pattern: After confirming the double top or double bottom, an isosceles triangle is formed. We will identify an Inside Bar to try to capitalize on the trend of the two patterns above.
Entry: In the case of a double top, we will place a sell stop order below the bottom of the Inside Bar. In contrast to the double bottom, we will place a buy stop order above the top of the Inside Bar. In both cases, if after a few hours there is no order, we will cancel.
Profit Target: Our take profit exit will be at the next support or resistance.
Stop Loss: The stop loss is set so that the risk/reward ratio is 2:1 or higher.
Example with USD/JPY:
After the double top is confirmed, a clear symmetrical triangle is formed. Inside it, we observe an Inside bar pattern. Here, we place a sell stop order slightly below the 119.78 low with a price target at 118.00 support. Our stop loss is above the downtrend line of the isosceles triangle at 121.00 – slightly up. The reward/risk ratio does not reach 2:1, so you can choose not to trade with this pattern.