Granthara04.04.03Inside bars and outside bars

Every price in Part 04 comes from an unnamed vegetable market and is a teaching example. Nothing here is a quote, a recommendation, or a record of any listed company.

04.04.03 · Inside bars and outside bars

PreviouslyA three-methods pause blends into a single candle — the pattern existed only at that resolution.

Same pair. Opposite names.

Two boards. Measure them one way and the second sits quietly inside the first. Measure them the other way and the second swallows it whole. Nobody has touched the chalk; the two readings are of the same eight numbers, and both are correct.

You have now met containment four times under four names. There was only ever one relationship.

Updated

1
relationship, behind harami, engulfing, inside bar and outside bar
Part 04 · Continuation and Multi-Candle Formations
  1. 04.04.01 Three white soldiers, three black crows
  2. 04.04.02 Rising and falling three methods
  3. 04.04.03 Inside bars and outside bars
  4. 04.04.04 Marubozu and trend acceleration
  5. 04.04.05 Mat hold
  6. 04.04.06 Tasuki gap and separating lines
  7. 04.04.07 Three-line strike
  8. 04.04.08 Hikkake and modified Hikkake
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Learn

The other measuring stick

04.03.04 and 04.03.05 measured containment on bodies — the first and last bid of each session. That was a choice, and there is one other extent a candle offers: its range, from lowest to highest.

Measure containment on ranges instead and you get two more names. An inside bar is a session whose whole range sits within the previous session's; the one before it is often called the mother bar. An outside bar is a session whose range contains the previous one's.

That is all that is new here. Inside bar is harami with the other stick; outside bar is engulfing with the other stick. The relationship has not changed — only what you hold it against.

See it

One pair, two measuring sticks

The same two boards throughout. Switch what you measure and watch the name change.

On bodies the second is contained. On ranges it is the container. Both statements are true of these eight numbers.

Learn

When the two sticks disagree

The pair above is not a curiosity — it is the ordinary case, and it is why the distinction matters. The second session's body sits inside the first's, so it is a harami. Its wicks reach past the first session at both ends, so its range contains the first's, and it is an outside bar.

Harami and outside bar are usually read as opposite kinds of event, and here they describe the same two boards. Neither reading is wrong. They are answers to different questions: where did the session begin and end? and how far did it get?

Which is the point of the whole chapter's arithmetic. A pattern name is a measurement plus a choice of what to measure, and the second half is almost never stated out loud.

Inside and outside bars are harami and engulfing measured on range instead of body. Four names, one relationship, two measuring sticks.

Learn

Why range containment gets used at all

It has one clear advantage: it cannot be argued with. The highest and lowest prices of a session are two of the four numbers, and either one range fits inside another or it does not. There is no convention to choose — no 60%, no half-of-the-first-body, no midpoint.

Every threshold this Part has met was somebody's decision. Range containment is the rare definition with none, which is why later Parts lean on it. Part 05 uses inside bars structurally, as a way of marking that a market went quiet inside a previous session's extremes, and it does so without importing any of 04.03's conventions.

The cost is that it says nothing about where the sessions opened or closed — the measurement 04.01.04 called the most useful single fact on a board. As always, the stick you pick decides what you can see.

The same eight numbers, measured twice
Session 1 body
₹29.20 to ₹30.30
Session 2 body
₹29.50 to ₹30 — inside it, so: harami
Session 1 range
₹29.10 to ₹30.40
Session 2 range
₹29 to ₹30.60 — containing it, so: outside bar
Numbers that changed between the two readings
none
2sticks, and two opposite names
0conventions in the range definition
Try it

A session's range sits entirely inside the previous session's. What do you know about its body?

Try it

Which stick does each name use?

Inside bar
Harami
Outside bar
Bullish engulfing
Mother bar
Harami cross

Lakshmi, shown the same two boards twice"You are asking me two different questions and complaining that I gave two answers."

Containment, for the fourth and last time. One shape remains in this chapter, and it is not a relationship between candles at all — it is a single board with one measurement pushed as far as it will go.

Remember

Inside and outside bars are harami and engulfing measured on range instead of body — the same containment with a different measuring stick — and because the two sticks can disagree about the same pair, a pattern name is always a measurement plus an unstated choice of what to measure.

Everything this chapter has told you, in order

  1. 04.04.01Three candles in the same direction blend into one: a single move seen closer up.
  2. 04.04.02Some patterns are artefacts of the timeframe you chose.
  3. 04.04.03Four names, one relationship, two measuring sticks.
Next
04.04.04 — Marubozu and trend acceleration

Next: one board, and the close-location slider pushed to its stop.