Inside Bar Trading Revisited

One thing I just admit that I follow DIBs method of using insider bar & only for 2 days now & now I see here 1KA point to differnt methods " Inside Bar Trading ( THE MACHINE ) " using IB & so there are differences .
Don't know if they are much difference .
fontu

Great--I'll give it a try. Thanks for the help.

CROESUS here is the other patterns I like to trade

thanks for sharing

here is the euro s/r line i drew in I was just talking about in the room

Yes, the EA places instant orders when the IB breaks.

Not posting a summary of EA trades today - just realised that a tweak I made stopped it trading as frequently :-)

Sometimes when an IB forms it may consolidate for a long time before an break out occurs. Does taking the break later affect the win ratio? Lets see:

EURUSD 30M 3 bars 1225 trades, 1005 wins (82%)
EURUSD 30M 4 bars 1541 trades, 1272 wins (83%)
EURUSD 30M 5 bars 1674 trades, 1390 wins (83%)
EURUSD 30M 6 bars 1714 trades, 1425 wins (83%)
EURUSD 30M 7 bars 1738 trades, 1447 wins (83%)
EURUSD 30M 8 bars 1742 trades, 1451 wins (83%)
EURUSD 30M 9 bars 1752 trades, 1459 wins (83%)
EURUSD 30M 10 bars 1758 trades, 1465 wins (83%)
EURUSD 30M 15 bars 1762 trades, 1467 wins (83%)

It's hard to see the effect, as the number of new trades taken by extending the bar is small compared to the number of overall trades. Lets take the difference between the previous bars results and the new one:

EURUSD 30M 3 bars 1225 trades, 1005 wins (82%)
EURUSD 30M 4 bars 316 new trades, 267 new wins (84.5%)
EURUSD 30M 5 bars 133 new trades, 118 new wins (88.7%)
EURUSD 30M 6 bars 40 new trades, 35 new wins (87.5%)
EURUSD 30M 7 bars 24 new trades, 22 wins (91.7%)
EURUSD 30M 8 bars 4 new trades, 4 new wins (100%)
EURUSD 30M 9 bars 10 new trades, 8 new wins (80%)
EURUSD 30M 10 bars 6 new trades, 6 new wins (100%)
EURUSD 30M 15 bars 4 new trades, 2 new wins (50%)

Hmm, nothing really conclusive as the samples are too small but it appears that going out a few bars more than I am (at 4) won't do any harm but will catch most of the 'missed' trades.

Note that bar 1 is the enclosing bar and bar 2 is the trigger bar. Bar 3 is the first bar that can actually break out. Maybe I should change the EA so this is bar 1, as that would be logical, captain.

Everything sounds great on this, 1ka, but something is wrong here. I have yet to have it do anything at all. It sees the IB and it's logged but it never takes a trade. I have other EAs working just fine so I'm at a loss.

Is it possible that the EA needs to work alone? I have other EAs on EUR working together without problem but it's the only thing I can think of. I tried your idea of moving the lot size up to 0.2 but still nothing.

Anything you can come up with would be appreciated--I love the IB trade so I'm hoping I can make this thing work.

Thanks.

Hello,

I am Ranger in the chat room that thinkpip started along with 1KA(here on FF) or ONEKA in the chatroom. I have been trading since 97, started with equities and then options, next up futures. For the past several years scalping the eminis as well as currency futures. I like them but I think FX has a lot more to offer. I like being able to trade anytime of day and it be liquid. I know a lot of people tell you the cme futures for currencies are the way to go but I think they are definately not. For those of you in the UK during your normal time to trade there is no liquidity in the cme currencies but in fx there are. Also fx gives you a lot more pairs to trade.

I dont believe in brokers stop hunting personal accounts, big players stop hunt in logical places just as they do in the eminis. This gives us the opportunity to fade these moves, but I dont think fx brokers do this on a personal account level. Atleast I have never had this problem. I trade with gft and chart thru tradestation. Now for years bascially since 97 I have been a scalper and it is a lot tougher in the fx market. I used to scalp bigger size for pennies or ticks all day long. Now thats harder to do in fx. But my personality for trading is still not very patient. But I do what is necessary to make money and make a living.

So I have been sucessful at trading the Inside bars. I have been trading them for a while. While I dont have a lot of strict rules on them in my next post I will explain more. Since some pairs have a distinctive personality and range I trade accordingly to the pair as long as I am familiar with it. I trade these of the 15 min chart which creates lots of oppurtunities throughout the day. Yes since it is a shorter time frame it will have more false breakouts, but thats where we come in as traders using the price action and s/r to determine where we think it is headed and if it is viable.

I also trade these same inside bars on the 30/60/240 min. While they offer bigger profit potential they also have bigger stop losses as well But if you are willing to take the stop loss risk you will see as the time frame goes higher the probabilities of the inside bars working are greater.

Personally speaking my fav timeframe is the 15 min for inside bars but I do 30 mins alot as well and try to hit all the viable ones. I also scalp off a 5 min chart to kinda feed my addiction to the scalping side when I am waiting for an inside bar to set up.

Along with inside bars on the time frames I mention I also use a shooting star patter which has done very well. Again the higher the tf the better our chances. I will take these on the 15 min but these I really like on the 30/60/240 min. So those are the ways I trade. We are in the room most of the day discussing the ways we trade and we are open to any ideas anyone has. No matter how long we have been trading we are traders and we are adaptable and leave our egos at the door, if we dont the markets will humble us. So we are all willing to take advice and willing to learn from one another. I dont care if someone has been trading 10 years or 10 days if they say something or show something that looks good I will take a look and see if it could work for me. We are always learning..... My next post will go over how I trade the IBS maybe a little different than some and I tend to be a little more aggressive in some instances. So please bear with me. On to the next post that will be coming in a few....

As for my inside bars on the 15/30/60/240 timeframes. I wait for them to set up as does anyone else. I usually draw my own s/r lines of swing points that the market is bouncing above and below over the past day or so. Also will draw trendlines from the past day and keep them up on the screen. I have a 20/50 period ema up so generally when the price is below I look for shorts , above I look for longs. As the price gets farther away from the emas, I might play some that are countertrend. But generally stay with the trend. The one thing I do differently then some is when the inside bar forms inside the previous bar. For example lets say its going to be short. So now we are waiting for the current bar to trigger our sell. I will usually sell as soon as the current bar breaks the body of the inside bar not the wick. To me its a point where the inside bar couldnt hold the low of the bar, so as soon as out current trigger bar hits below the body I short. Some might not like this but this is the way I do it and do not push it on anyone. It affords me a tighter stoploss. As soon as the the market moves in my direction 5-10 pips I will bring my stop loss down by that much. As it goes lower I keep bringing my stop loss with it. I dont like heat as no one does but I also dont want to waste my time in a trade going against me for 2 hours and not stopping me out and then going my way. I will come back for it later. I would rather the trade work right away or get out quick with a very small loss and most times b/e and then come back when it is ready to make its move. So I am very aggressive moving my stop loss down with the trade, and very very rarely do I get stopped out using the initial stop loss on the trade becuase it is bascially only there in the beginging and then it is moved down. The only indicator I use is stochs. I try to get in the trade with the trend when it is over bot and over sold, and as we know a real strong trend will not read good on the stochs so then I disregard it, if it is a ranging day then true stoch readings will be fine. But its just a guide to try and put the probabilities on my side. I base my trades on pure price action. Here is a pic of a 15 min chart with 2 ibs( they have yellow dots on them from my tradestation indicator) The white line is where I shorted. They are also both below the emas for me, so I went ahead with them. The next post will be about the star patterns

I showed this chart on this thread today for someone in the room as I was explaining what I do. Like I said I look for shooting star patterns. First I like a nice trend , in this case we are looking at the gbpusd. I like the 30 min charts for these as well. So when a pair in this example is trending down, and then seems to reverse a little and go up. Instead of me trying to time the bottom and buy . I let it run its course up and let the trade come to me I want to see the exhaustion and as well as not breaking the downtrend. I want to see a nice blow out shooting star and then thats my trigger to look to short. It doesnt matter to me what the color of the star is. Once I see the actual shooting star, lets say its green well then the next bar will start higher above the star as it comes back down and if it comes back down, I short as soon as it also breaks the body of the star. Again I am aggresive with my stoploss bringing it in quickly. If it is a red shooting star then generally the next bar starts even at the low of the body of the star at this point I wait for it to break the wick to short, still with tight stops. If it doesnt work quick I am out and look for another single maybe another star or IB . So you might take a small loss here or there as long as you are smart about the money management but when these run they run usually pretty well and quick. Here is a pic below of a red star and a green star in the pound/dollar. The next post will just be about my scalping off the 5 min to bide my time waiting for the bigger setups

Sorry this pic goes with the last post about the shooting star

So on the 5 min chart I also put up a 20 and 50 period ema. When we are below I look for shorts on retracements to the emas and when we are above the emas I look to go long on retracements down to the emas. My triggers to go short and long are still IBS and stars same rules apply. I just look for a quick 10-20 pips on these scalps. See attached picture. You can see the yellow dot is the inside bar , the ellipse is where I liked the trade that came back to the emas on a short day. So thats bascially pretty simple. Here is the pic

Well thats generally how I trade. Mostly like I said IB'S and clear star patterns and the 5 min for scalping as I am scanning for our setups. I like to keep it as simple as possible not have a million rules. Rules are good, but the rules that are best for me are simple its money management , money management, and money management. I am confidnet enough in having enough oppurtunities present itself during the day. But if I do take the wrong one I want to make sure I am not throwing a whole day away on one trade or trying to make it back. So I keep things tight and go from there adn trade what I see and what the market gives me. By the way I am in the US so sometimes I wont make it to the room as early as the UK guys but I am trying to get up earlier and earlier Have a great night all and see you guys soon in the room.


Ranger

Ranger thx for sharing your trading style. Very interesting.

todd

Thanks Ranger, there's something for everyone in those posts! The idea of trailing the SL early on the IBs is a good idea.

I'll tweak the EA to use a simple version of that and see what the effect is. My gut feel is that the win-ratio will drop, but that we'll start to see more profit. Currently we're at 80+% with BE on profit at best.

Thanks again.

Great posts, Ranger!

... following this thread as well ...

Fox

jcbwrites, hmm, tricky one. The EA should work OK with other things, but I haven't tried it so maybe there is an incompatibility.

I guess you are using the second EA I posted (need to start using version numbers). This has the defaults set at optimum and is 'better' than the first one.

The EA does write some verbose messages to the log file. Depending where you installed metatrader the logs are in the experts\logs directory. Mine are here -> C:\Program Files\MetaTrader\experts\logs

If you post the log in the forum then I can look at it.

Note, the log file will have everything in it including all your trades. If you post it here, run it through 'grep' to only get the log entries with IBTrader in them. If you can't do this, then post it to my email address, I've PM'd you with it , and I'll treat it in the utmost confidence.

===

Well I would PM you but you have PM turned off! Either PM me or if you can do the grep thing then post here, thanks.

I will show pics once in a while of clear stars or IBs I like just so you get used to the patterns if your new Good trading day to all , becareful of ECB conference today. Here is a pic of a star on the euro this morning