What Is the Inside Bar Breakout Strategy

A day inside the day before

The inside bar breakout strategy is built on two days and a line. The first day is the mother bar. The second is the inside bar: a day whose whole range — its high to its low — sits inside the mother bar's, so it never touched the mother bar's high or low. Take gold in April 2025. On 14 April the day ran from 3193.70 to 3245.66. On 15 April it ran from 3209.94 to 3233.51, inside both. On 16 April the close was 3342.82, 97 dollars above the mother bar's high. A small day inside a bigger one, then a close outside the bigger one, is the pair the strategy watches for.

A courtyard with two gates

Picture a walled courtyard with a gate at the top and a gate at the bottom. The walls are the mother bar's high and low. The inside bar is a day spent entirely inside the walls, never reaching either one. The strategy does not care what the price did inside the courtyard, only that it stayed in. It watches the two gates, and its cue is the price going out through one of them: a close above the top wall, or below the bottom one. On 16 April the path out went through the top gate. Which gate the price uses says which way the strategy is looking.

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