Simple Inside Bars

This is a discussion on Simple Inside Bars within the Trading Journals forums, part of the Reception category; Originally Posted by foredog There is a lot of talk of risk reward and different strategies so i am going ...

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Old Nov 8, 2008, 1:18pm   #29
 
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Originally Posted by foredog View Post
There is a lot of talk of risk reward and different strategies so i am going to attempt to demo trade a simple system on the GBPUSD over the next few weeks.

I will trade the break of a 1hr Inside bar in the direction of the day (chosen by taking the open of the 6am Uk time candle) with an entry by stop loss 4pips outside the bar and my stop 4 points the other side of the bar.

I will then check every hour and if a bar makes a new high i will move my stop to 50% difference from this candle and my previous stop and my exit will either be stop hit or signal in other direction.

I will try and record it here and also on a blog A SIMPLE TRADING SYSTEM

I will start with a fictional $10000 and risk 3%

Foredog. I would like to suggest a very simple alteration to your system if I may be so bold. You are trading the uk open on the cable. So in theory you only have one of the active sides actually taking part. Why not use the USA open, you then have both ends playing. You could even run the two open times side by side so to speak. to find out which (if any) is better suited to this methodolgy. And (I personally would also use outside bars).

I had looked at Peter Crowns method over a few months and the times it did work it was very good, but there were lots of days where nothing happened, or gave a loss trade. This way you give yourself 4 chances over one, if you also took the 2 till 3pm bar gmt time. (I think also if memory serves that he traded ANY inside bar break out from the stated start time).

I haven't even looked back through any charts yet to even see if this works, so I do apologise in advance if it's a total screw up and also for 'chocking' the 'simple' plan.

Simple works... Though it may need a tweek here and there.
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Old Nov 8, 2008, 1:23pm   #30
 
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Foredog. I would like to suggest a very simple alteration to your system if I may be so bold. You are trading the uk open on the cable. So in theory you only have one of the active sides actually taking part. Why not use the USA open, you then have both ends playing. You could even run the two open times side by side so to speak. to find out which (if any) is better suited to this methodolgy. And (I personally would also use outside bars).

I had looked at Peter Crowns method over a few months and the times it did work it was very good, but there were lots of days where nothing happened, or gave a loss trade. This way you give yourself 4 chances over one, if you also took the 2 till 3pm bar gmt time.

I haven't even looked back through any charts yet to even see if this works, so I do apologise in advance if it's a total screw up and also for 'chocking' the 'simple' plan.

Simple works... Though it may need a tweek here and there.
Great idea, I'm going to run with just the Uk for a few weeks first and then maybe look to introduce this if there's very few signals.

Thanks
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Old Nov 8, 2008, 7:23pm   #31
 
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It’s a price (action) observation that is as old as the hills.
I’m not sure how you’ll go on with triggering it off that particular chart reference, but the concept of gunning inside & outside edge bars on positive (negative) flows is a simple, effective driver. Team them up with visible support-resistance (buy/sell pressure points) & you got quite a powerful template to play with.

I work alongside a fella who has operated one of his long-range engines via a weekly/daily combo for years, with excellent risk to profit tolerances.

Example below.

One of the positives of legging in via the higher timeframe templates is you get plenty of time to weigh up the each-way odds of compounding a strong momentum play, whilst minimizing costs. You also suffer less from (fake out) 2 way intraday vibrations, which will be one of your major annoyances on that small timeframe.
Anyhow, good luck with it.

grey lines are buy/sell pressure zones
red line is the trigger off a (typical) big figure launch

Click the image to open in full size.

Last edited by Hawkmoon; Nov 8, 2008 at 7:30pm.
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Old Nov 8, 2008, 9:54pm   #32
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Team them up with visible support-resistance (buy/sell pressure points) & you got quite a powerful template to play with.

You also suffer less from (fake out) 2 way intraday vibrations, which will be one of your major annoyances on that small timeframe.
Keying in off the key wkly-daily (s/r) zones via his hourly frame will reduce the false starts on these inside plays, especially if theyíre managed via pullback entries.

There arenít too many on here keen to play off the larger frames on the currencies Jimmy.
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Old Nov 8, 2008, 11:32pm   #33
 
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Keying in off the key wkly-daily (s/r) zones via his hourly frame will reduce the false starts on these inside plays, especially if theyíre managed via pullback entries.
They will to a certain extent sure. Thing is Anna, even via a 60min view thereís usually a whole stack of choppy 2-way flow snapping at your heels most every goddamn day.

That inside (& outside) bar kicker is a fair leg into a decent pitch off the key levels, but on the lower timeframes youíre pissing your risk up against the wall a good percentage of the time, particularly recently with the low level liquidity & patchy order flow.

I donít see any favorable risk-cost advantage at all if you got to spend half your time re-calibrating (& financing) washed out trades?

Itís a decent piece of kit to have in your pocket, but Iím not convinced itís a viable play on these gambling timeframes.
Itíll be interesting to see how this experiment plays out.

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Old Nov 9, 2008, 10:40am   #34
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Hi Hawkmoon,
For the benefit of those subscribers to the thread who aren't that quick on the uptake (i.e. me!), could you explain the significance of the IB's marked 'A' Vs the IB's marked 'B' on your chart please?
Cheers,
Tim.
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Old Nov 9, 2008, 11:13am   #35
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Hi Hawkmoon,
For the benefit of those subscribers to the thread who aren't that quick on the uptake (i.e. me!), could you explain the significance of the IB's marked 'A' Vs the IB's marked 'B' on your chart please?
Hi Tim
Heís not around for a couple days so Iíll step in if itís ok?

Those potential reaction zones (lines) he put up on the big frames are taken off his weekly reference chart.
They can then simply be cascaded down so they print on any timeframe reference of choice as price begins vibrating on & around the level Ė theyíre just watch zones if you like.

What heís getting at regards triggering a lower timeframe inside bar (or any other price action trigger come to that) is the fact you might obtain keener value or lower potential risk if you use the ďmuch observed, obviousĒ reaction levels such as s/r, buy-sell pressure & big figure zones etc to execute your orders, rather than get caught in mid-stream where most of the herd tend to conduct their business.

Orders & transactions consistently get attracted to these common magnets up & down the ladder, especially big figures/key swings & highly visible levels.

By grading the set-ups & trying to execute your game plan on & around the higher potential r/r tickets (such as that s/r level he earmarked with his A grade highlighter) you just might remain seated a little longer & thus gauge the risk-profit percentage of your book as price gets flipped back & forth thru itís supply-demand chain.

Hope that helps.
Anna-Maria.
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