What Is an Outside Bar

Two real days

An outside bar is a candle whose high is above the previous candle's high and whose low is below its low: it sticks out of the one before it at both ends. On 25 July 2025 the euro against the dollar ranged 58 pips — a pip being the fourth decimal place, the smallest step most people count in. On Monday 28 July it went 10 pips above that Friday's high, 118 pips below its low, and closed down there. The shape records a period in which the price went further both ways than the last time.

The rule

The rule is the inside bar's turned around, and like it, it is measured on the whole range from high to low; the colours and the bodies are ignored. That is what separates it from the engulfing candle of an earlier paper, which is measured on the bodies only. A candle can stick out of the previous range at both ends with a tiny body, and be an outside bar without engulfing anything; a candle can cover the previous body without reaching past the previous high or low, and be engulfing without being outside. Some candles are both.

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