The Outside – Inside Bar trigger is yet another potential trigger that we would like to share with you. For the set up you can use any time period chart – 10, 60 or 4 hour charts for example with a 20 period moving average. A filter of only trading in the direction of the moving average is applied to the strategy. The trade set up is as follows:

1. Look for large outside bars that have considerable length.

2. The following 3 bars must have its close and open stay within the open and close of the target outside bar. Highs and lows do not matter as these will be false breaks.

3. After and on the 4th bar you set a buy stop order on the high or low of the oustide bar – depending on the direction of the moving average. If the market moves the other direction then lift the stop limit order.

4. Profit targets and stops are set to a ratio of 1 risk to 3 profit requiring only a 2 out of 5 win ratio to make money.

Take a look at the thumbnail for an example of this strategy. So look for this trigger and let us know if it works for you.