Price Action Trailingstop

I want to explain an exit strategy which is price action based. Its to catch a move not a trend.

I read about it in a book some time ago so i dont deserve any credit.

Feel free to ask any questions...




Definition inside bar:
the open and close of the candle have to be inside the high and low of the previous candle.

Definition outside bar:
its the bar which contains the inside bar(s)



Rules:

Dont use this trailingstop on a timeframe lower than 10min.

If an inside bar occurs you have to change your stop loss. If you are long you have to put it at the low of the previous candle. If you are short you have to put it at the high of the previous candle.

When a candle closes above (for longs) or beyond (for shorts) the high/low of the outside bar you have to put your stop loss at the high (for shorts) or at the low (for longs) of the candle.



i hope this examples explain it better...