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This is how it looks on the chart. It is not very widely known pattern, but it's very effective once You know how to use it. This is a variation of an inside bar setup. Before looking for this pattern there must be a support or resistance area, it is not valid signal if it is not at these areas. Ok, closer to the whole idea. First of all the inside bar has to form at support or resistance level. There can be more than one inside bar. Next thing that we would look for is a break below the low of the mother candle. At this stage a lot of traders would start selling. Not this time. Instead we will go long on the break out above the high of a mother candle. Stop loss is placed somewhere near the middle point of a mother candle. Take profit level is up to a trader. Can be previous high, FIB level or anything else. Take into account risk reward ratio before placing a trade. This example is a bullish setup. Can be reversal candlestick pattern as well as continuation pattern. It depends on the direction of a fake breakout. If it is to the upside then we are looking to go short once the low of a mother candle has been broken. I hope that this was something new for some traders. There is also quite few videos on the internet about this setup where it is explained more in detail.
