18#Double Inside Bar Strategy, MT4, MT5, TradingView
Pattern Definition
The pattern consists of three candles.
The first candle is the Mother Bar.
The second candle is an Inside Bar.
The third candle is also an Inside Bar, and its high and low remain within the range of the Mother Bar.
In other words, both inside bars must have highs lower than the Mother Bar high and lows higher than the Mother Bar low.
Market Logic
The Mother Bar establishes a broad price range. The next two candles show compression as buyers and sellers fail to push price beyond that range. This concentration of volatility often precedes a significant breakout when one side gains control.
Trend Filter
The strategy includes an optional trend filter based on a 20-period moving average.
A long setup is valid when price closes above the moving average and the moving average is rising.
A short setup is valid when price closes below the moving average and the moving average is falling.
When the filter is disabled, every Double Inside Bar pattern is considered tradable.
Entry Rules
For a bullish setup, place a buy stop order a few ticks above the high of the Mother Bar.
For a bearish setup, place a sell stop order a few ticks below the low of the Mother Bar.
The order is activated only if price breaks out of the Mother Bar range.
Stop Loss
The stop loss is placed on the opposite side of the Mother Bar.
For long trades, the stop loss is positioned below the Mother Bar low.
For short trades, the stop loss is positioned above the Mother Bar high.
This approach uses the full range of the consolidation as the technical invalidation point.
Trade Management
The strategy can be managed in two ways.
The first approach is to use a fixed reward target, such as two or three times the initial risk.
The second approach is to trail the position using a 20-period moving average.
For long trades, the position remains open as long as price closes above the moving average.
For short trades, the position remains open as long as price closes below the moving average.
This trailing technique allows profitable trades to capture extended trend moves.
Optional Partial Exit
A practical approach is to close half of the position at two times the initial risk and trail the remaining half with the moving average. This balances profit realization with the possibility of larger trend continuation.
Example
Suppose the Mother Bar has a high at 1.2500 and a low at 1.2450.
Two inside bars form within this range.
Price is above a rising 20-period moving average.
A buy stop order is placed at 1.2502.
The stop loss is placed at 1.2448.
If the initial risk is 54 pips, the first target at two times risk is 108 pips above the entry.
The remainder of the trade is managed using the moving average trailing stop.
Recommended Markets and Timeframes
This strategy works particularly well on liquid instruments such as major forex pairs, stock indices, and commodities.
The most reliable timeframes are H1, H4, and Daily charts, where the pattern tends to produce cleaner breakouts and fewer false signals.
Advantages
The setup is objective and easy to identify.
The risk is clearly defined by the Mother Bar range.
The optional trend filter improves trade quality.
The moving average trailing stop allows the strategy to capture larger moves while keeping trade management simple.
Limitations
False breakouts can occur in low-volatility or range-bound markets.
The Mother Bar may occasionally be too large, resulting in a wide stop loss.
The moving average trailing stop can give back part of unrealized profits during sharp reversals.
Strategy Summary
Identify a Double Inside Bar pattern.
Apply the optional 20-period moving average trend filter.
Enter on a breakout of the Mother Bar.
Place the stop loss on the opposite side of the Mother Bar.
Take partial profit at two times risk if desired.
Trail the remaining position using the 20-period moving average.
This strategy combines volatility compression, trend alignment, and systematic trade management in a simple and robust framework suitable for discretionary and automated trading systems.
18# Inside Bar System II Forex Trading System
Submit by joy22
Time frame daily
Pairs:all.
Long Entry
• 21 SMA must be trending up and not flat.
• An inside bar must form.
• Place a buy order 5 pips +spread above the top of the inside bar.
• Place the required stop depending on the currency pair (see stop values)
• Place a take profit of twice the amount of the stop.
• Do not remove trade until either the entry is triggered or the 21 SMA
changes to a down direction.
Short Entry
• 21 SMA must be trending down and not flat.
• An inside bar must form.
• Place a sell order 5 pips +spread below the bottom of the inside bar.
• Place the required stop depending on the currency pair (see stop values)
• Place a take profit of twice the amount of the stop.
• Do not remove trade until either the entry is triggered or the 21 SMA
changes to an up direction.
Forex metatrader indicator: Inside Bar
we have two trade setups on the GBP/JPY, the 21 SMA is in
a clear down trend with no signs of turning flat. On the Friday an inside bar
formed and we placed our entry 5 pips below the bar with a 100 pip stop and a
200 pip profit target. 4 days passed with no market movement before our entry
was finally triggered taking us into profit almost immediately. Our take profit was
hit two days later with a profit of 200 pips.
The second trade was far more exciting triggering our order into the market the
very next day and hitting our profit target the following Monday with another
200 pips profit
2 in example #2 we have another 2 good examples of this system in action
on the EUR/USD, both inside bars formed with the 21 SMA sloping up indicating
we can only take buy trades. The first trade was looking a little grim as it
retraced against us after the entry day but it eventually hit our profit target of
100 pips 5 days later. The second trade shot into profit straight away and hit
our profit target the very next day.
Inside Bar Pattern
