Introduction

Traders often look for high-probability chart patterns that lead to strong directional moves. In this guide, you’ll learn one of the most powerful candlestick setups that can give explosive moves when it appears — especially on Nifty and Bank Nifty.

This pattern works consistently, is easy to identify, and can be used for swing trading and intraday trading.

You will learn:

1. What is the candlestick pattern?
2. Exact setup rules (no ambiguity)
3. Best timeframes and instruments
4. Entry, stop-loss, and target logic
5. Backtesting examples from Nifty & Bank Nifty
6. Why this pattern works

What Is the Explosive Move Candlestick Pattern?

This is a two-candle setup containing:

✔ A “Master Candle”

A large candle (bullish or bearish) that represents strong directional control.

✔ An “Inside Candle”

A smaller candle that stays fully inside the high and low of the master candle.

This pattern is also called Inside Bar with Master Candle.

Candlestick Setup Rules

1️⃣ For a Bullish Explosive Move

• Candle 1 → Big Green candle (Master Candle)
• Candle 2 → Small Red or Green candle, fully inside the range of Candle 1
• Inside candle’s wicks must not break the master candle high or low
• Break of Master Candle HIGH → Buy signal

2️⃣ For a Bearish Explosive Move

• Candle 1 → Big Red candle (Master Candle)
• Candle 2 → Small Green or Red candle, fully inside it
• Break of Master Candle LOW → Short signal

INVALID setup if:

❌ Inside candle breaks high/low of the master candle

❌ Market is sideways, not trending

❌ Taken on wrong timeframe

Timeframe to Use

⏱ Daily Time Frame ONLY

Do NOT check this pattern on:

1. 1 min
2. 5 min
3. 15 min
4. 1 hour

This setup gives best reliability on Daily charts, and then you may trade it intraday.

Best Instruments to Trade

🟢 Works Best On:

✔ Nifty

✔ Bank Nifty

✔ Major Indices (FINNIFTY, SENSEX)

🟡 Also Works On:

✔ Liquid Stocks ✔ High Volume Stocks

🔴 Not Recommended For:

❌ Penny stocks

❌ Low volume assets

Trend Filter (VERY IMPORTANT)

The setup only works when you trade along with the trend.

How to Identify Trend?

➡ Plot 20 EMA on daily chart

1. If 20 EMA is rising → Uptrend → Only bullish trades
2. If 20 EMA is falling → Downtrend → Only short trades
3. If price is zig-zag → IGNORE setup

Entry, Stop Loss & Target Rules

✔ LONG TRADE (Uptrend)

Entry Options:

1. Break of inside candle HIGH

2. Break of master candle HIGH

Stop Loss Options:

1. Below inside candle low (recommended for small SL)
2. Below master candle low

Target:

1. Intraday → 1:2 Risk Reward
2. Swing → 1:3 or 1:4 RR

✔ SHORT TRADE (Downtrend)

1. Enter when master candle LOW breaks
2. Stop loss above inside or master candle high
3. Same RR rules apply

Backtesting Explanation

Inside Candle indicator in TradingView can be used:

➡ Go to Indicators → Search “Inside Candle” ➡ The chart marks inside candles with triangles ➡ Check:

1. Whether master candle breakout happened next day
2. Whether breakout was in direction of trend
3. Whether price made 1:2 RR move

Example :

Bank Nifty

1. Inside candle formed
2. Next day broke master candle high
3. Index moved +600 points
4. Result: Explosive Move Successful

Multiple past examples show the same behavior.

Why Does This Pattern Work?

Because:

✔Master candle shows institutional aggression

✔Inside candle shows pause/consolidation

✔Breakout = fresh momentum + trapped traders exit

✔Combines trend + volatility compression + breakout

Advantages of This Pattern

✓ Easy to identify

✓ High probability edge

✓ Works best on index futures

✓ Small stop loss + big reward

✓ Clean price action strategy (no indicator needed)

Limitations

⚠ Not 100% accurate

⚠ Must follow trend filter

⚠ Works poorly in sideways market

⚠ False breakout possible — SL required                                                                                            

FAQ

❓ Which timeframe is best?

➡ DAILY chart only

❓ Is this good for intraday?

➡ Yes — take breakout on daily & trade in intraday with small SL

❓ What is win rate?

➡ Approx 50-60%, but with 1:2 RR it becomes profitable

❓ Can it be automated?

➡ Yes, using TradingView alerts + algo bridge

Closing Thought

This Inside Candle + Master Candle setup is one of the most powerful price action strategies for catching explosive moves on Nifty and Bank Nifty.

When traded with trend, proper entry, and risk-reward discipline — it can dramatically improve profitability.