Inside bar
Bars whose high and low both stay inside the previous bar's range, a sign that price is coiling.
The indicator marks a bar when its high is below the previous bar's high and its low is above the previous bar's low, both strictly. At the default window of 1 that is the classic inside bar test against one prior bar. At a larger window it checks against the highest high and lowest low of the last N prior bars, which is looser: the bar must stay under that high and above that low, not inside a single bar. The output is a yes or no with no direction, so it flags compression, not the way price will break out.
How to read it
- Each marker is one bar whose high and low both stayed inside the bar before it.
- A run of markers means price is tightening into a narrower range.
- The marker has no direction; watch for price to break out of that range, either way.
- At default settings about one bar in ten carries a marker, so on one-minute charts they are common.
What it outputs
- Inside bar
- Marks each bar whose high and low both sit inside the previous bar's range. Signal only, with no direction.
When it fires
At window 1, fires when the bar's high stays below and its low stays above the previous bar's range. It means price paused and the range tightened. It does not say which way price will leave the range.
Settings
- Window Size
- Prior bars the test compares against. At 1 the bar must sit inside the previous bar, the classic test. Higher values compare against the highest high and lowest low of the last N bars, so they only add markers, never remove them.
Pitfalls
- On one-minute bars about one bar in ten fires at default settings, about 92 a day on SPY in September, so many markers are noise and not a setup on their own.
- It has no direction. The break out of the range can go either way, and the marker appears before the break is known.
- Only the default window of 1 was measured. Larger windows add markers at a rate not measured here, so check the chart before relying on one.