Inside Bar Breakout Entries with Risk-Reward Targets and ATR Stops

Summary

This positional strategy treats a candle contained within the previous candle’s high-low range as an inside bar. The prior candle becomes the mother bar. While no position is open, a close above its high triggers a long entry and a close below its low triggers a short entry; only one breakout is taken from that setup.

The initial stop is placed at the opposite edge of the mother bar, and the profit target is calculated from the entry-to-stop risk using a configurable risk-reward multiple. An optional ATR-based trailing stop follows price while respecting the initial stop level. The script includes settings for the reward multiple, ATR period, and ATR multiplier, but the supplied excerpt contains no strategy report or performance data. It therefore describes trade rules rather than evidence of profitability. Breakout failures, execution costs, and sensitivity to instrument and timeframe remain important considerations when evaluating the approach.

Key ideas

• An inside bar is defined by a high below and a low above the preceding candle’s extremes.
• A close beyond the mother bar’s range triggers a long or short position.
• The initial stop sits at the opposite edge of the mother bar.
• The target uses a configurable multiple of the entry-to-stop risk.
• An optional ATR-based trailing stop can tighten as the trade moves favorably.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.