on WTI we have a perfect example of Inside Bar candlestick pattern on a daily chart.
An inside bar is a series of bars or sometimes just one bar that is contained within the range of the preceding bar (mother bar). The first rule that we should take into account is that inside bars must have a higher low and lower high than the mother bar. The second rule is that we trade this pattern only after bearish or bullish breakout of a mother bar trading range.
The logic behind inside bar is simple. It indicates a time of indecision and market consolidation. Inside bars typically occur as a market consolidates after making a large directional move (bearish on WTI), you also can see this pattern at key decision points like major support or resistance levels.
For WTI our plan is to wait until a violation of a trading range. Remember that the candle MUST close below or above the range before we take any action!
Probability of bullish breakout is a bit low since the weekly HiLo range Standard devation is at 63$ and the weekly pivot point resistence is also at 63$ and with a average price of 61-61$ the range could hold.
VasilyTrader
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@DavidDMitov, I agree with you! however, market knows better! so if bulls break the range It will be strongly buying sentiment!)
DavidDMitov
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@VasilyPonomarev, Yea I got the idea I just want to give another view :)
Hmm, how did that work out then? Not too good as it seems...