Inside Candle Patterns

Overview

Inside candle patterns identify consolidation periods where one candle is completely contained within the previous candle’s range. These patterns often precede significant price moves and are valuable for identifying potential breakout setups.

Types of Inside Patterns

Inside Week

Condition: Previous week’s high is lower than 2 weeks ago high, AND previous week’s low is higher than 2 weeks ago low

Formula:

isInsideWeekCandle = (prior_week_high < twoPriorWeekHigh and 
                      prior_week_low > twoPriorWeekLow)

Visual: Purple background in top-right table Display: Shows week high/low range when detected

Inside Candle (Configurable Timeframe)

Condition: 2 bars ago high/low contains previous bar’s high/low

Formula:

isInsideCandle = (twoPriorthirtyMinHigh >= prevThirtyMinHigh and 
                  twoPriorthirtyMinLow <= prevThirtyMinLow)

Default Timeframe: 30-min (configurable) Visual: Shows in top-right table with timeframe label

Configuration

Timeframe Selection

Input: insideCandleTimeframe (default: ‘30’)
Options: Any valid TradingView timeframe
Common Choices: ‘30’, ‘60’, ‘240’, ‘D’

Display Options

Show 30 Min: Toggle 30-min inside candle display
Table Display: Shows in top-right table when detected

Visual Display

Inside Week Display

Background: Purple (color.rgb(49, 27, 146, 73))
Text: Shows “Inside Week (high - low)”
Additional Info: Includes inside candle detection if present

Inside Candle Display

Background: Green/red based on prior high difference
Text: Shows timeframe, prior high, percentage difference, RSI
Format: “30 Min / Prior High / RSI” or similar

Trading Applications

Breakout Trading

Setup: Inside pattern forms = consolidation
Entry: Breakout above/below inside range
Confirmation: Volume increase on breakout
Target: Measure move from inside range

Position Building

Inside Week: Potential for larger moves
Inside Candle: Shorter-term consolidation
Multiple Patterns: Stronger signal when both present

Risk Management

Stop Placement: Below inside range low (for longs)
False Breakouts: Wait for confirmation before entering
Time Factor: If no breakout after X bars, pattern may fail

Best Practices

Wait for Confirmation: Don’t enter until breakout occurs
Volume Check: Require volume increase on breakout
Structure Alignment: Best when inside pattern aligns with structure
Multiple Timeframes: Check inside patterns on multiple timeframes
Market Context: Inside patterns work best in trending markets

Technical Details

Data Fetching

// Weekly data
[prior_week_high, prior_week_low, twoPriorWeekHigh, twoPriorWeekLow] = 
    request.security(syminfo.tickerid, 'W', 
        [high[1], low[1], high[2], low[2]], 
        lookahead=barmerge.lookahead_on)

// Configurable timeframe data
twoPriorthirtyMinHigh = request.security(syminfo.tickerid, 
                                         insideCandleTimeframe, high[2])
twoPriorthirtyMinLow = request.security(syminfo.tickerid, 
                                        insideCandleTimeframe, low[2])
prevThirtyMinHigh = request.security(syminfo.tickerid, 
                                     insideCandleTimeframe, high[1])
prevThirtyMinLow = request.security(syminfo.tickerid, 
                                    insideCandleTimeframe, low[1])

Display Logic

Inside week takes priority if both patterns detected
Shows timeframe-specific label when only inside candle detected
Includes RSI and prior high percentage difference