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Inside Bar Trading Strategy
Inside Bar Forex trading strategy a popular
system with a nice win/loss ratio but a rather rare occurrence of the proper
entry conditions. It doesn't require any indicators and can be applied on the
bare candlestick or bar chart.
Features
- Entry conditions are clearly defined.
- Very simple bare chart system.
- High success rate.
- Rare occurrence of the proper conditions.
How to Trade?
- An inside bar is a bar or a candlestick that completely fits into the first
preceding bar (also called a "container" bar), including its High and Low
values.
- If the current bar has an index of 0 and the previous bar has an index of 1
then the following conditions should be true for the current bar to count as an
inside bar: High[0] < High[1] and Low[0] > Low[1]. Mind the strict "greater" and
"less" operators.
- Bearish inside bar that follows a bullish "container" bar on the clearly
visible uptrend signals a Short position.
- Bullish inside bar that follows a bearish "container" bar on the clearly
visible downtrend signals a Long position.
- Stop-loss is set to the Low of the "container" bar for the Long positions
and to the High of the "container" bar for the Short positions.
- Take-profit should be set to the nearest support/resistance level formed
by the trend.
Example
A bullish inside bar after a downtrend is shown on the example chart. The
inside bar is easy to identify and the stop-loss level is rather conservative
here. The target was set to the resistance level formed by the previous
downtrend. As you can see, the currency pair rate reached the take-profit level
without any problems.
Warning!
Use this strategy at your own risk. EarnForex.com can't be responsible for
any losses associated with using any strategy presented on the site. It's not
recommended to use this strategy on the real account without testing it on demo
first.
Discussion:
Do you have any suggestions or questions regarding this strategy? You
can always
discuss
Inside Bar Strategy with the fellow Forex traders
on the Trading
Systems and Strategies forum.
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