Inside and Outside Bars
An inside bar's whole range sits within the previous candle's range, showing contraction; an outside bar's range covers the previous candle entirely, showing expansion.
An inside bar sits entirely within the previous bar's high-to-low range, showing a pause or contraction. An outside bar covers the whole previous range, showing expansion. Both are judged by the full range including wicks, not just the bodies, and both are usually read together with trend and nearby levels.
- Category
- Technical Analysis
- Reading time
- 3 min
- Also called
- Inside bar, Outside bar, Mother bar
- Updated
Inside and outside bars in plain words
An inside bar is a candle whose whole range sits within the high and low of the candle before it, called the mother bar.1
It only has to fit inside the mother bar's full range, wicks included — not just its body.1
An outside bar is the reverse: it reaches above the previous candle's high and below its low.2
How to read them
Mark the prior bar
Note its high and low.
Compare the next bar
Inside: within the range. Outside: beyond both ends.
Use the full range
Include wicks, not just the body.1
Plan an inside-bar breakout
Place entry orders on both sides of the mother bar: a buy stop over its high, a sell stop beneath its low.1
Read an outside bar's close
Close near the high is bullish; near the low, bearish.2
Check context
Prefer strong mother bars and higher timeframes.
Worked examples
Example 1 — Inside bar
ContractionHypothetical: bar 1 range 100–110; bar 2 range 103–108.
| Mother | 100–110 |
| Inside | 103–108 |
The whole second candle sits within the mother bar's range — an inside bar.1
Example 2 — Breakout
Upside breakA later hypothetical bar trades to 111, above the mother high.
| Breakout | 111 |
With stops above the high and below the low, the side that breaks first is entered.1
Example 3 — Outside bar
Bearish outside barHypothetical: bar 1 range 50–55; bar 2 range 48–57, closing at 48.5.
| Range | 48–57 |
| Close | Near low |
An outside bar closing close to its low is read as bearish.2
Inside vs outside bar
| Aspect | Inside bar | Outside bar |
|---|---|---|
| Range | Within prior bar | Beyond prior bar |
| Shows | Contraction | Expansion |
| Typical read | Breakout setup | Read the close |
| Judged by | Full range | Full range |
Where traders use them
Breakouts
Planning a Breakout.
Stops
Setting a Stop Order at the range edge.
Reversals
Spotting a Reversal.
Volatility
Reading Volatility changes.
Advantages and disadvantages
Advantages
- Clear, rule-based definitions.
- Give defined entry and stop levels.
- Work on any market.
- Show contraction and expansion.
Disadvantages
- Many false breakouts.
- Too common on low timeframes.
- Wide outside bars mean wide stops.
- Need context to mean much.
Going deeper
Read as far as you need. Each level builds on the one before it.
Full range
Beginner
Wicks count: the inside bar must fit within the mother bar's full high-to-low range.1
Reliability
Intermediate
The pattern tends to be more reliable after a strong directional mother bar and on daily or longer charts.1
Outside reversal
Advanced
An engulfing candle resembles an outside bar, but it only has to cover the previous body (open and close), not the full range.3
Common mistakes
Using only bodies
Use the full range.
Trading every inside bar
Filter by context.
Ignoring the outside bar's close
The close carries the meaning.
Stops too tight
Use the mother bar's range.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- Inside bars sit within the prior range.
- Outside bars exceed both ends.
- Use full ranges, not bodies.
- Inside bars set up breakouts.
- An outside bar's close gives its bias.
Frequently asked questions
What is a mother bar?
Is an outside bar the same as engulfing?
Best timeframe?
Further learning
- Breakout
Trading range breaks.
- Range
High minus low.
- Stop Order
Entry and exit stops.
- Candlestick
Candle basics.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- IG. 16 Candlestick Patterns Every Trader Should Know (opens in a new tab) Checked .
- FXAcademy. Important Candlestick Types - Part 1 (opens in a new tab) Checked .
- StockCharts ChartSchool. Candlestick Bullish Reversal Patterns (opens in a new tab) Checked .
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. We are not affiliated with any publisher linked above. Last reviewed . Report an error or request a source credit.