10 Bar Patterns Every Price Action Trader Knows

These ten patterns cover roughly 90% of the actionable single-bar and short-sequence setups a discretionary trader will encounter. For each: the shape, the ideal context, the entry template, the stop, and the failure mode that kills the trade.

3.1 Reversal Bar

A bar whose low is lower than the previous bar's low, but whose close is higher than the previous bar's close (bullish reversal), or the mirror at a top (bearish reversal). The pattern captures the moment sellers pushed lower, failed, and buyers took control back within the same bar.

• Entry: break of the reversal bar's high (bullish) or low (bearish)
• Stop: below the reversal bar's low (bullish trade)
• Context needed: at a well-tested support/resistance, after a defined swing move
• Fails when: in the middle of a range with no level backing; volume is thin

3.2 Key Reversal Bar

A stricter version of the reversal bar. Opens beyond the previous bar's high (in a downtrend) or low (in an uptrend), then reverses to close on the opposite extreme. Signals a decisive shift in intraday intent.

• Structure: gap in the trend direction, then a full reversal by close
• Entry: at market on next bar, or break of the bar's high/low
• Stop: the extreme wick of the key reversal itself
• Reliability: highest of the reversal-bar family; sits at 60–65% follow-through when at a level

3.3 Exhaustion Bar

The last bar of a trend. Prints an unusually large body in the direction of the trend, on high volume, but the next bar fails to continue and instead reverses. Marks capitulation buying (at a top) or selling (at a bottom) as the trend runs out of new participants.

• Signature: large body, high volume, then a clear failure to continue on the next bar
• Entry: after the next bar confirms failure — enter opposite direction on break of the failure bar's opposite extreme
• Stop: beyond the exhaustion bar's wick
• Warning: only tradable if the two-bar sequence is at a meaningful level. In a strong trend, exhaustion bars can be followed by another leg after a brief pause

3.4 Pin Bar (Pinocchio Bar)

A bar with a very long wick in one direction, small body, and short opposite wick. The "nose" of the bar is the long wick — where price probed and got rejected. Named after Pinocchio because the long "nose" is where the market lied about direction before snapping back.

• Structure: wick at least 2× the body; body in the opposite half of the bar's range
• Entry: break of the pin bar's body high (bullish) or low (bearish)
• Stop: beyond the tip of the nose (long wick end)
• Best context: at a horizontal S/R, at a trendline test, or at a moving-average retest
• Fails when: in the middle of a range with no level, or after 5+ consecutive pin bars (market is choppy, none of them mean anything)

3.5 Two-Bar Reversal

Two consecutive bars: the first is a strong bar in the trend direction (e.g., large green bar in an uptrend); the second is a strong bar in the opposite direction (large red bar). Together they form a "V" or inverse-V. The second bar's close often lands near the first bar's open — indicating a full retracement within just two bars.

• Bullish version: big red bar → big green bar closing near or above the red bar's open. Reversal at a support
• Bearish version: mirror at resistance
• Entry: break of the second bar's extreme in the reversal direction
• Stop: beyond the pattern's lowest low (bullish) or highest high (bearish)

3.6 Three-Bar Reversal

A more conservative reversal. Bar 1 makes a new extreme in the trend direction. Bar 2 stalls (small body, doji, or inside bar). Bar 3 breaks in the opposite direction, closing beyond bar 1's open. The middle bar of indecision gives you confirmation before entry.

• Entry: at close of bar 3 or on next bar's open
• Stop: beyond the extreme of bar 1
• Trade-off: higher confirmation, slightly late entry vs the two-bar reversal

3.7 Three-Bar Pullback

A continuation pattern, not a reversal. In an uptrend, three consecutive small-bodied bearish or mixed bars form a shallow pullback. When the fourth bar breaks the third's high, the trend resumes. Bearish mirror in a downtrend.

• Entry: break of the highest high of the 3-bar pullback (in an uptrend)
• Stop: below the lowest low of the 3-bar pullback
• Filter: the pullback should retrace less than 50% of the last impulse; deeper retraces suggest trend weakness

3.8 Inside Bar

A bar whose high is lower than the previous bar's high AND whose low is higher than the previous bar's low — completely contained inside the previous bar's range. Signals compression, often precedes expansion.

• Entry: break of the "mother" bar's high or low, in the direction of the break
• Stop: the opposite extreme of the mother bar
• Ideal setup: inside bar at a level in the direction of the higher-timeframe trend
• Nested inside bars (2, 3, 4 consecutive inside bars) compress volatility further; the eventual break is often violent

3.9 Outside Bar

The opposite of inside bar. The current bar's high is higher AND its low is lower than the previous bar's range — completely engulfs the previous bar. Signals a volatility expansion and often a reversal.

• Structure: range expansion, close often near one extreme
• Bullish outside: engulfs prior bar with a close near the high
• Bearish outside: engulfs prior bar with a close near the low
• Entry: in the direction of the close, on break of the outside bar's extreme

3.10 NR7 (Narrow Range 7)

A bar whose range (high − low) is the narrowest of the last 7 bars. Signals extreme volatility compression — the setup for an imminent expansion.

• Structure: narrowest range in 7-bar window; often has a small body too
• Entry: break of the NR7 bar's high or low, in the direction of the break
• Stop: the opposite extreme of the NR7 bar
• Variant: NR7 that is also an inside bar is even higher-quality — extreme compression

3.11 The universal filters

Every bar pattern above has better win-rate when these four filters agree:

1. At a level — never trade a bar pattern in the middle of a range
2. Aligned with higher-timeframe trend — a bullish reversal in a daily downtrend at intraday support is a weak setup; the same reversal in a daily uptrend at intraday support is a strong setup
3. Volume expansion on the pattern bar or the trigger bar — no volume = no participation = no follow-through
4. Room to run — at least 2:1 reward-to-risk to the next opposing level, otherwise skip

Any pattern with 4-of-4 filters is a high-quality setup. 3-of-4 is tradable. 2-of-4 is a coin flip. Below that, skip.

3.12 On the chart

Two years of daily Nifty 50. Practice: pick 5 bars that visually match one of the patterns above. Identify the pattern, the context (level? trend?), and decide whether you would have taken the trade.

3.13 Combining bar patterns — the multiplier effect

Two patterns firing at the same location is stronger than either alone. The best combinations for Indian markets:

3.14 Measured moves — where to place profit targets

Each bar pattern has a rough measured-move target that comes from decades of documented trades:

• Pin bar — target = pin bar's range projected in the reversal direction from the break point. Nifty daily pin bar with 120-point range → 120-point profit target
• Inside bar breakout — target = mother bar's range projected from the break. Larger mother bar = larger target
• Outside bar — target = outside bar's range projected from the close. Wide outside bars produce large moves
• NR7 breakout — no strict measured move; instead, target = 2× the NR7 bar's range (since compression is by definition small)
• Key Reversal — target = KR's range projected from the reversal close

These are minimum expected moves. In practice, take partial profit at the measured target and trail the rest — most winners either fail before the target OR blow through it.