Forex Trading Strategies

Inside Bar False Breakout: An Overview of Forex Trading

An inside bar false breakout is a popular yet tricky tactic used within the Forex market. It occurs when the price action of a currency pair ranges between two price bars. A trader anticipates a breakout either up or down from the inside bar range; however, instead of a breakout occurring, the price of the currency pair moves back in the same direction, closing near the top or bottom of the previous bar. This can lead to a loss for traders if they had placed orders on the breakout to occur and it did not. It is important for a trader to understand how to identify a possible false breakout pattern and act accordingly.

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