Outside Bars

Outside Bars
Outside bars are preferred to the previous bar that totally encompasses the trading range. If you look at
the figure below, the smaller bar followed by a longer one. They also develop after the both down and
up trends that will represent by a strong signal of exhaustion. If the bars encompassed is more, so the
signal will become better. The volume will be great because of the longer one is relative to the smaller
one that towards the stronger the signal. The strong of the signal, it will make the outside bar that
relative to the preceding ones become wider. The better, if the outside bar that reach the extreme
point, which is closer the price away from the direction of the inside bar, previous trend.
Based on the chart, the price action for IOICORPORATION, it’s is shown that the bar was wide that the
signal was a strong one, encompassed the trading range of the previous and closed near its high. This
indicated that the upside break was whipsaw that added to more to the bearish outside bar.
Inside Bars
Inside bars, it is just opposite of the outside bars that the smaller will be inside of the longer one. It will
be better if the trend preceding the pattern is sharper. The longer one, which is outside of the bar,
indicates a strong reversal in sentiment, but different from the smaller that based on the balance
between buyers and sellers will through following a sharp up or down trend, which is resolved by
change in trend. To make a strong underlying momentum of the prevailing trend to climax, the first bar
should be wide than the previous bar. The change in the buyer or seller will balance that make the
strong of the signal, which is the smaller, the inside bar relative to the outside bar. The situation will be
more balance, if the volume of the inside bar is smaller than the preceding bar.
Based on the chart, it is shown the price action for Tenaga BHD. The rally came with the little short.
Finally, the bearish developed in ending of 2018 those in very strong characteristics. It’s encompassed by
the previous bar and it closed near to low.
Two-Bar Reversal
A two-bar reversal refers to the charts signal exhaustion. These patterns develop after a prolonged
advance or decline. The first bar will be near to the low, which is open and closes near the high. The
second bar near the first bar, which is also opens and closes near the first bar. Both bar, the first and the
previous should be wide trading relative to previous bar and also their opening and closing should be
close or near to their extremities. The first bar will be affect the second bar, if the volume is heavier that
show the direction of the new trend. Two-bar reversal not recommended following the retracement
move since an abrupt change in sentiment.
Based on the chart, the price action for Digi, it is shown that the price opens with low. Then, the price
closes with high after a sharp run up for the previous bar. For the second bar, the price opens same with
the previous close. Then, the price closes near low for little or no net gain.
Key Reversal Bars
After a prolonged rally, a key reversal bar created. This is follow by the time the price experience that
the trend will be accelerating. The direction of the prevailing trend, the price will be opens strongly. The
price closes near or below the previous close in uptrend reversal. But in downtrend reversal, it’s going to
be opposite that near or above the previous close. When the initial reversal in trend is unduly sharp, a
retracement move follows a key reversal bar. The outside bar will be the signal of the termination of the
brief advance.
Based on the chart, the price action for Digi, it is suitable for long term. The price opens well up after the
previous exhaustion. The price closes near low after a sharp run up. Then, followed by a sharp
retracement move.
Exhaustion Bars
This is a different but still in the form of the key reversal bar. There will be sharp up or down move. The
price opens in large gap that direct to the prevailing trend. The first bar is extremely wide than the
second bar. For the opening price, the downtrend should be in the lower half and the uptrend should be
in the upper half of the bar. For the closing price, both of the openings should be above and in the top
half of the bar in downtrend. Meanwhile, in uptrend, this is in the lower half and below the opening. The
bar will be completed, if there have a gap that still have in the place, the left.
Based on the chart, there is no gap between the exhaustion bars. There have an extreme movement in
the price by a strong move. It’s shown that a bearish bar following with the price is down sharply as
decline as the gap became large with huge volume. The exhaustion bars, it is more to be very short-term
charts.
Pinocchio Bars
Pinocchio bars have shown that give the temporary false sense of what actually going on. The bar looks
as bulk of trading that higher a support or resistance zone but actually looks the open and also looks
close. So, it will give a false thought of a breakout even though the price beyond range. For the bullish
bar, the wide part of the bar above or below that the opening and the closing.
Based on the chart, it’s been indicates that, there is a false impression of strength that as false upside
Pinocchio breaks. It is show that the price cannot hold any longer above the strong resistance reflected
by the trend line. The price still moves in the same direction from that indicated by the break. It’s of the
will be a reasonable risk that have a stop loss a little bit that beyond the extremity of the Pinocchio Bar.

Outside Bars

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