Part 1 · Understand the pattern

03Small is not always inside

The mistakes that make an invalid candle look valid.

Small is not always inside.

Hypothetical illustration, not real market data.

The candidate's body looks small, but its upper wick reaches 1.1240, beyond the mother high 1.1230, so it fails.

Valid versus invalid.

1Only the first example passes the strict test.
2Equal highs, wick breaches, dojis that touch the extremes and shortened Sunday candles are all rejected.

Hypothetical illustration, not real market data.

Common mistake	What to do instead
Comparing only bodies	Compare the full high-to-low ranges.
Using an unfinished daily bar	Wait for the daily close.
Choosing a convenient earlier mother bar	Use only the candle immediately before.
Accepting an equal high or low	Reject it; the rule is strict.
Calling a doji inside automatically	Apply the same two checks to its wicks.

If several inside bars appear in a row, compare each with its immediate predecessor. Ignore new signals while an order pair or position is active.

Honest note

Most rejected candles fail on a wick you did not look at closely enough.

Key takeaway

Small is a feeling; inside is a measurement.

Try it

Find three candles on a daily chart that look inside and test each one in the checker.

This chapter is in the full ebook

Chapters 1 and 2 are free. Get all 21 chapters with every calculator and the journal.

Instant PDF download