Case Study · Pattern Visual
Inside Bar Breakout
4-bar compression pattern · Long & short setups · Entry, stop, targets
4-Bar Pattern · Long Breakout
Bar 4 Triggered
B1
Mother Bar
Wide range bar. Sets the high/low boundaries for the entire pattern. All subsequent bars must remain inside.
B2
First Inside Bar
High and low are contained within B1's range. Signals initial consolidation and indecision.
B3
Compression Bar
Further compression inside B1 (and usually B2). Builds energy. Its high becomes the breakout trigger.
B4
Trigger Bar
Closes above B3 high. Enter on this close. Stop below B1 low. Targets at 1:1 and 2:1 of B1 range.
4-Bar Pattern · Short Breakout
Bar 4 Triggered
B1
Mother Bar
Wide range bar. Sets the high/low boundaries. Stop goes 1 tick above B1 high for short trades.
B2
First Inside Bar
High and low contained within B1. Market consolidating after the initial move lower.
B3
Compression Bar
Tighter range. Its low becomes the key breakdown trigger. Tight stop: 1 tick above B3 high.
B4
Trigger Bar
Closes below B3 low. Enter short on the close. Stop above B1 high. Targets below entry.