A very simple Inside bar system

Definition
1. Inside bar: the Close price of today is inside the range of previous trading day’s range.
2. Outside bar: the Close price of today is outside the range of previous tradng day’s range.

Recommendation
Using Barchart instead of Candlestick chart to read Daily timeframe.
Using Candlestick chart is ok, but Barchart help to see Close price in relationship with Previous day’s range better.
Method
× Step 1: Wait until the End of Day
× Step 2: If Today is Inside bar, wait for tommorow
× If Today is Outside bar, look for the LAST Inside bar on the left.
× Step 3: Open lower timeframe (H4, H1) to find entry inside the Inside bar’s range. Short entry if Outside bar Close below Inside bar's range, Long entry if Outside bar close above Inside bar's range.

- Stop Loss (SL) should be at the Top of the Inside bar (for Short entry) or at the Bottom of the Inside bar (for Long entry).
- Entry should be at Resistance level below it (for Short entry) or Support level above it (for Long entry), and better if the level is Flip/or Multiple Support-Resistance level.
- Take Profit (TP) should be at the bottom of the Outside day which’s next to our Inside day, or at desired Risk:Reward ratio.
Usually TP could be take when Profit = 4xRisk. At Profit = 3xRisk, move SL to Entry => Break-even.

Example:
Step 1 & 2: Look for couple of Inside & Outside bar.

There are many inside bar, but we care only about the Last Inside bar before an Outside bar.
We have some IN-OUTside bar couples, as Red is for Short entry & Blue is for Long Entry.

Step 3: Entry, SL & TP
Again, for entry, Look for Multiple Support - Resistance level and TP at the high(for Long)/low (for Short) of the Outside bar or TP could be at personal desired Risk:Reward.
Blue line: Multiple Support - Resistance level below Inside day's top (for Short) or above Inside day's botom (for Long)
Red box: Entry & SL
Green box: TP


Note that these box is illustrated inside the Inside bar day, the Outside bar is next to it on the right.
The Setup - Limit order - should be set after the Outside bar day.

Today (the day this example is written) is Sept 28, 2023.
From left to right:
Loss be counted as touching SL before touching TP. If trader want to take profit with personal desired Risk:Reward then it's up to them.
Setup 1 (Short): End - Loss
Setup 2 (Short): End - Loss
Setup 3 (Long): End - Profit
Setup 4 (Long): Active - Currently in Profit
Setup 5 (Short): Active - Currently in Profit

Thank you for taking the time to start this thread.

Do you have an examples of candlesticks? Most people use candlesticks these days and I think the interest in this thread will grow if you incorporate candlesticks.

Of course its up to you.

Really an interesting and simple approach.
Thank you for the share.
More detailled examples are welcome

You sir are a GURU.

I can tell that because you have redefined the long-standing definition of Inside Bars and Outside bars.

Google for Walter Peters and his "Kangaroo Tail" and you will see what I mean. Hint: it's a PIN BAR.

Note: you said close price of today? Nobody knows where it will close today; is that semantics or logic?

Why not name it like this?

Definition
1. Inside Close Bar: the Close price of yesterday is inside the range of previous trading day’s range.
2. Outside Close Bar: the Close price of yesterday is outside the range of previous trading day’s range.

It will be interesting to see if the new definition will stand the test of time.

Entertaining and educational as always.....

yes, more details.
I think the ligic behind this are:
- the inside bar usually is a market consolidation phase, which often an area of fair price and could act as a Support/Resistance area if market fall back into it.

- the outside bar is usually an extension phase because it close outside previous day's high. This happens on Daily timeframe should gives lower timeframe a good direction.

- Multiple Support-Resistance level: i see how people use Support - Resistance as clear example of Top and bottom and expect market to bounce from it. But this rarely happens.
And they have another concept of fresh, which's the less being touched the better level. This also couldn't be more wrong, IMO.
I think market works based on Supply and Demand (S&D), but that S&D has to be real orders, nowadays mostly Algorithms and by my observation and this's my theory, a particular price area can be interested for them - the Algos - for a period. During the period, how many times market runs through it doesn't matter that much. If market runs very quick with overwhelming market order (which contrast vs limit orders) then a support/resistance could not hold. But then the Algos should immediately put another new limit orders around their interested price area, make the multiple support-resistence could works again.

The absolute top/bottom of a price swing is often the end of an over-extended movement, not exactly the interested level in most cases. Like your car runs through a bunch of speed bumps, its speed and inertia reduce significantly, but the car does not stop right at the speed bumps. Algo's interested price levels are those speed bumps, and the top/bottom is where the car stop.
Finding a level which market often bounce from it recently, could be seen as a horizontal line that runs through several candle/bars highs/lows is crucial for the entry.

- Last, the important thing is not because of those logic above. As you can see winrate is not amazing. 50/50 or less i would say. The system works because R:R ratio is decent and the execution process is simple & clear enough for trader:
* Observation and setting order: only at the End of Day. No intraday intervene. Suit for anyone.
* Decide direction and Entry: simple and clear, reduce guessing or vague estimation.
* Profit guarantee: No guarantee. You will end up losing money no matter what you do. It's gambling, what do you expect?

Anyway the thread just to save my idea. I don't know how long that i could maintain it. Im bad at it (

i don't know anything you say at all, like the name, the concepts, the animal's part and everything.
I cook this for me and myself only. I exploit the forum as a place to save my idea. Although you see it as sharing, i don't want anyone to eat it before testing. Btw what the hell is gUrU?

Clearly, English is not your first language.More forex garbage from a Guru.