Another point to add to this concept is volume. When price touchs the BB and the next bar is an inside bar volume should also be less. I've found that you may sometimes have a couple of inside bars before you see a change of direction. Alex
Maybe im mad, but volume doesnt apply the same across markets. The respective TIMING involved should be significant, in commodities rollover periods, its just as likely to be meaningless in equities. Inside days(and combinations of, plus variables) are best used as filters, but it depends on the divergence your looking at.
I certainly cannot speak for all markets since I don't have that expertise. However, I can tell you that, generally, when you have a trending market with good volume and then you get an inside candle with lower volume that, to me, shows indecision at that point. That indecision may lead to some sort of change. Remember, we are working with "indications". Each move up, down or sideways is an indication of what may come. There are no absolutes in this business. Alex