Inside Bar Breakout
Inside Bar Breakout is a simple price-action strategy.
Inside Bar Breakout is a simple price-action strategy. An inside bar is a bar whose entire range sits inside the previous ("mother") bar - a lower high and a higher low - which represents a one-bar pause or consolidation. The strategy buys when price then breaks out above that inside bar's high, betting the coiled range resolves in the breakout's direction, and exits on a close below the prior bar's low.
It is an easy, trending, daily swing-trading strategy.
How it trades
| Ingredient | Meaning |
|---|---|
| INSIDEBAR() | 1 when the previous bar was an inside bar (contained within its mother bar), else 0 |
| High(1) | The previous bar's high - the breakout level |
| Low(1) | The previous bar's low - the failure/exit line |
Buy (breakout above the inside bar's high):
INSIDEBAR() AND Close > High(1)
Sell (breakdown below the prior low):
Close < Low(1)
When it works best
Simple, clean price action that works best when an inside-bar consolidation resolves into a real directional move. Its documented weakness is that it needs trend confirmation: inside bars occur constantly, and many "breakouts" above one are just noise, so on its own the pattern produces a lot of marginal signals - it is strongest when filtered by a prevailing trend (e.g. only taking long breakouts while a moving-average trend filter is up).
Backtest this strategy yourself
Build these rules on the Free plan, adjust them, and see how they would have traded.