What is an inside day?
You need two bars to define an inside day. The reason for this is obvious when you learn that an inside day is when the low is higher than yesterday’s low and today’s high is lower than yesterday’s high. If both conditions are fulfilled, you have an inside day.
In other words, all price action of an inside day is inside the price action of yesterday. The whole range falls inside the range of yesterday. This chart of the oil futures reveals plenty of inside days (green arrows – ignore the red arrows):
Inside day in trading
Inside day in trading
As you can see, the bars over the green arrows show an inside day and they are quite frequent, but it varies from market to market. It depends on the volatility and the price action between the close and the opening the next day. The above chart is crude oil and this market has many inside days.
What is an inside day? You need two bars to define an inside day. The reason for this is obvious when you learn that an inside day is when the low is higher than yesterday’s low and today’s high is lower than yesterday’s high. If both conditions are fulfilled, you have an inside day.
In other words, all price action of an inside day is inside the price action of yesterday. The whole range falls inside the range of yesterday. This chart of the oil futures reveals plenty of inside days (green arrows – ignore the red arrows):
Inside day in trading Inside day in trading As you can see, the bars over the green arrows show an inside day and they are quite frequent, but it varies from market to market. It depends on the volatility and the price action between the close and the opening the next day. The above chart is crude oil and this market has many inside days.