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Candles scan

Inside Bar Screener

This scan finds stocks where today's high is below yesterday's high and today's low is above yesterday's low (an inside bar), while the price is above the 50-day moving average.

Run this scan in the live demoFree, no sign-up. The demo uses made-up sample data.

The exact rule

Type this in Chalni: inside bar and close above 50 day sma

  1. Inside bar
  2. Close > SMA(50)

Find US stocks where today shows an inside bar; and the closing price is above the 50-day simple moving average.

Formula view
pattern(inside)
AND close > sma(close, 50)
Example chart: Inside bar in an uptrendDaily candles of a made-up sample stock with 50-day SMA. The shaded day is the day the scan fired.
  • 50-day SMA
  • Shaded day: the scan fired
Example from Chalni's made-up sample market, not a real stock. It shows the most recent time this scan fired in the sample US market, picked whether or not the trade worked.

What it means

An inside bar is a pause. The whole day traded within the previous day's range, so neither buyers nor sellers pushed further. Traders see it as a coil: when the price breaks out of the "mother bar" range, the next move often starts.

In an uptrend, traders usually look for a break above the mother bar's high to join the trend.

How traders use it

  • Place a buy stop just above yesterday's high (the mother bar) and a stop loss below its low.
  • Inside bars near a breakout level or a rising 20-day average get more attention.
  • Two or more inside bars in a row show an even tighter coil.

Watch out for

  • Breakouts from inside bars can fail and reverse. A stop on the other side keeps the loss small.
  • Inside bars are common. On their own they say little about direction.

Test it before you trust it

Every scan in Chalni sits an exam. First it runs on older data, the practice: each time it picks a stock, the stock is held for 10 trading days and 0.2% is paid in costs. Then it runs on newer data it has never seen, the exam. A scan that only works in practice has just memorised the past.

See the practice and exam results for this scan in the demo (on sample data; real data comes at launch).

Questions

What is an inside bar?

A candle whose high and low are both inside the previous candle's range. The previous candle is called the mother bar.

How do you trade an inside bar?

Most traders wait for the price to break above the mother bar's high (or below its low) and enter in that direction, with a stop on the other side.

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