The Best Trading Setup Using Mother Bar-Inside Bar Combo (2024)

Mother Bar-Inside Bar Combo

In forex trading, if you have a perfect

chance of your success becomes high. But the irony is that most of the time, traders fail to build a rock-solid strategy that will gain a handsome amount of pips at the end of the month.

Mother bar inside bar combo could be a great weapon if you use this strategy correctly and follow a strong money management plan.

What is a mother bar-inside bar combo?

To buy set up, first, you need to spot a strong big bullish bar, and then more than one small inside bar. When you find these setups, then wait for the next candle. If The next candle is also a big bullish candle that breaks the first mother bar’s high, then place a buy trade.

For a sell setup, first, you need to spot a solid big bearish bar, and then more than one small inside bar. When you find these setups, then wait for the next candle. If The next candle is also a big bearish candle that breaks the first mother bar’s low, then place a sell trade.

Now I will try to give you some examples so you can understand the whole strategy more clearly.

Mother Bar Inside Bar Examples

Look at the picture. First, we get a strong bearish candle and then 4 inside bars. Next, we find another bearish candle that eats up all the previous bars. This is something you can call a perfect setup. If you take the trade, you would catch a big market movement.

Traders make a big mistake in that they place trades too early. If you place a trade just seeing the first mother bar and a couple of inside bars, then you could make a loss. Because who knows whether the market will back or not from this point? According to my research, I find many times that markets move from these zones.

But when you will for the second strong bearish bar, there is still selling pressure in the market. Still, sellers are ruling the market, and those inside bars were just the resting time of the market. Those who take trades after breaking the first bars low strongly make a profit.

An example of a sell setup

Look at the picture. First, we get a strong bearish candle. And then 4 inside bars. Next, we find another bearish candle that eats up all the previous bars. This is something you can call a perfect setup. If you take the trade, then you would catch a big market movement.

But traders make a big mistake that they place trades too early. Like if you place a trade just seeing the first mother bar and a couple of inside bars, then you could make a loss. Because who knows whether the market will back or not from this point? According to my research, I find many times that markets move from these zones.

But when you will for the second strong bearish bar, there is still selling pressure in the market. Still, sellers are ruling the market. And those inside bars were just the resting time of the market. Those who take trades after breaking the first bars low strongly make a profit.

An example of a buy setup

Here, in a bullish setup, first, we find a strong bullish bar, then a 3 inside bar, which remains inside the mother bar. The second big bullish candle eats up all the previous inside bars. Look how powerful the setup is! How beautifully the price rises after confirming the formation.

But if you take buy trade just finding the mother bar and inside bar, then you will lose so many trades. This is my personal experience. I observed the market and found that the market often retraces back from these zones and starts falling again. So it would be best if you were very cautious when you place trades. If you are greedy and read the half story, then this market is not for you.

Take profit – Stop loss

Place your stop loss below (buy) or above (sell) the first mother bar + 5 pips. You can use a predetermined 1:2 risk reward ratio or manually scale up your profit. If your stop loss is 50 pips, then when you make 100 pips, put your stop loss at the entry price. Thus, you can maximize your gain.

Who should not follow the mother bar inside bar combo strategy

Traders with no money management plan and greedy traders should avoid this strategy because if you don’t have a money management plan, you will be excited to put all your money in one trade when you find a perfect setup or use 20/30% capital in one single trade.

No matter how perfect the setup is, always use no more than 4-5% capital in one single trade. The market was there before and will be there in the future. So no one is taking away your fortune. Finding a setup does not mean you will not find another one the next day—trade following a proper money management plan. If you can’t follow money management, remember that your greed will kill your whole capital today or tomorrow.

Final Talk

It’s really hard to find a profitableforex strategy. Many fancy indicator-based strategies peep on your screen, or you can find them by googling. I am not saying that they don’t work. But the fact is that when you follow any strategy that is not based on any type of indicator but rather built purely on price and candles, you will be able to catch the big moves. The two examples I showed here ensure vast movements in the market. You are entering before the folks enter. You are just entering the market with the big boys of the market. So the odds are in your favor.

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