Inside Bar Breakout: Having trouble identifying good ones

Other signals are often clear to me but inside bar breakouts really confuse me.

What's the minimum difference in low/high from bar 1 and the inside bar? Should it be atleast 1 pip? Is a bigger difference better? Does the size of shadow/body matter for either bar? Is it only a breakout when the 3rd bar breaks the 1st bar? And what exactly does it mean? I know a pinbar means many big traders were satisfied with the price and started picking up orders which caused the price to reverse, leaving all the traders who had opposite positions stuck in their trades and forced to liquidate them driving the price that way even more. What's an IB breakout bars story?

An inside bar is just that. A range within the previous range. This has a higher chance of breaking out one way or another from price compressing, gathering an accumulation of entry and exit orders on either side.

James16 on IB: http://www.forexfactory.com/showthread.php?p=19131

Here's what they look like when zoomed in to visualize what I mean by a range within a range.

http://i46.tinypic.com/2ccnq5y.jpg


http://i49.tinypic.com/k395eg.jpg
Eur/Gbp Chart from ~0600-0800GMT

In your example the bar's body is within the other bar's body. Is the signal false or weaker if the outside bar is a doji? What if the inside bar is a doji?

With the inside bar you posted I would be focussed more on the fact that the outside bar is a pinbar, rather then an IB Breakout signal

You have to add trend and location to any price action to give it an edge.... my personal opinion.

Of course. I'm currently looking at support/resistance to determine wheter to enter or exit a trade. But even around these places I often find myself relying on pinbars, shadows and engulfing bars and often miss signals which have inside bars.

I'm just wondering what exactly constitutes an inside bar. If there's no signal and I miss a move then that's too bad, but if I'm actually missing profitable situations due to missing some clarification then that's a problem.

The location of the candle's close doesn't matter. That's an 'inside' bar if the next candle's range is within the previous candle's high-low. The formation will still be the same if its a long doji or pin, w/e. Inside bars tell you that buyers and sellers are for some reason trading within a tighter and tighter range. Trading without conviction of a direction. This is usually followed by a strong breakout.

IMO there is no difference in outcome (still random) if the outside/inside bar(s) are dojis.

Thanks alot for clarifying.

Doesn't the inside bar signal a possible continuation or reversal? If you are likely to trade in either direction, why would the trend matter?