what is an inside day 
an inside day is a two day price pattern that occurs when a second day has a range that is completely inside the first day s price range the high of the second day is lower than the first and the low of the second is higher than the first inside days show a contraction in volatility and are often a continuation pattern this means that following the inside day the price will often continue moving in the same direction after the pattern as it did before that said the pattern is common and frequently insignificant inside days may be contrasted with outside days understanding inside daysinside days are common on a daily chart they may occur several times per month in many assets this means that many inside days will provide little information to a trader and will not result in a significant price move following the pattern an inside day shows that volatility has dropped from the prior day the market is taking a pause this is why the pattern is often considered a continuation pattern in the encyclopedia of chart patterns thomas bulkowski found that in over 29 000 samples of the pattern the price continued in the same direction it entered the pattern 62 of the time 