Hello Forex Trader, in here I will show you a very simple trading system on how to trade the daily inside bar.
I call this the daily inside bar trading with trendlines forex strategy and it is a forex price action trading strategy.
But first, what is a daily inside bar?
Well, a daily inside bar is a candlestick that that forms under the shadow of the previous candlestick. Which simply means that the high and lows of the daily inside bar are formed within the shadow of the previous candlestick.
Here are few examples of what inside day bars look like on the chart:
As you can see, the daily inside day bars form within the shadows of the previous day’s high and low.
What Is The Importance Of Trading The Inside Day Bars?
- Get ready for a spring…or breakout when you see an inside day bar on your chart. These are explosive price moves that can get you 100-300 pips easily.
So where are the two techniques for trading the inside day bar then? Well here they are:
1: Daily Inside Day Bar Multi-Timeframe Trading With Trendline Breakout
Here are the steps
#1: First, Identify the inside day bar:
#2: Switch To A Smaller Timeframe (30 minutes of 1 hour timeframe) and see if there’s an opportunity to draw an upward trendline or a downward trendline based on the peaks and lows of that you find.
#3: Wait And See if Price Breaks That Trendline
- If price breaks that trendline and you see the 1hr or 30 minute canlestick close above/below it, you place a pending buy stop/sell stop order 2 pips above the high/low of the candlestick.
- two options for stop loss placement: 2 pips under the low/high of the breakout candlestick or 2 pips under previous swing low/swing high.
#3: Set your profit targets between 100-200 pips and wait to see if the market can give you that
Now, it can take 1 or 2 or even 3 days before you hit your take profit Target:
- inside bars are really easy to identify.
- its a type of set and forget trading system
- a less stress trading system
- potential to make 100-400 pips profit in just a few days.
- tight stop loss and if trade goes as planned, the risk:reward can be mind boggling
Hope you like this little trick on how to trade the inside bar…and don’t forget to share! Thanks