Consolidation and Breakout (Inside Bars)

Consolidation indicates moments of market indecision when there is no shift in price. It is neither positive nor negative. Usually, after a price burst or strong trend movement that market falls back into a phase when traders are cautious about possible overbought or oversold positions. During this period, market reconciles before another breakout or trend emerges. Once you have identified consolidation, the next step is to keep an eye on a possible breakout.

This indicator would be useful for Breakout traders.

A candle's high and low is marked and if consequent candle fails to close above or below the marked candle, it's considered as an inside bar.

This can help breakout traders in tackling fakeouts since the wick above or below the initial candle are neglected and only the candle close above or below the range are considered as breakout.