Friday, June 20, 2014

Inside Bars

An Inside Bar is a sign of falling volatility. The current bar's range is within the previous bar's range. Another way of saying the same thing - an inside bar has a low greater than the previous bar's low and a high less than the previous bar's high.

Go with the Trend

Inside bars are a sign of indecision with the current trend ... we assume that the indecision will be resolved in favor of continuing the current trend. Therefore, if the current trend is up, traders should use the Inside Bar as a setup to buy. If the trend is down, use the inside bar setup for a sell. If no trend is visible, then the inside bar has no technical significance, and, should be ignored.

How to Trade:

For entry and initial stop placement: buy as the stock trades above the Inside bar, sell as the stock trades below the Inside bar. A stop loss is placed on the opposite side.

     Inside bars are successful most of time and easy to trade with confirmed breakout on either side. But always use your own setup and rules with it while trading.

3 comments:

Rajat Yadav said...

Sir, off topic... I heard you talking about Campa cola compund residents on CNBC.

Although I understand the sentiment but I read all the facts available on the issue and my take away points were-

1) Residents were aware that construction was illegal when buying it, they were hoping it will be regularized later
2) It was bought at 1/3rd the market value
3) Supreme court has already taken all facts into account and ordered demolition ( I assume it would have come to conclusion that residents were not entirely not guilty), they were given a fair trial.

I think the law should be followed and this would set an good example for builders and people setting up illegal colonies.

As always emotions shouldn't take over rules.

Gullapalli Sankara said...

Very useful advice. Thank you

Gullapalli Sankara said...

Sir very useful advice. Thank you