Inside-Bar Breakouts with Mother-Candle Stops and ATR Trailing

Summary

This positional strategy treats an inside bar as a contraction in price range and uses the preceding bar as the mother candle. It waits for a confirmed close above or below that candle's range before entering long or short, and permits one breakout attempt for each detected structure. The opposite edge of the mother candle sets the initial stop, while a configurable risk-to-reward multiple determines the target.

An optional ATR-based trailing stop follows price in the favorable direction and cannot move beyond the initial stop in the adverse direction. The script allows only one open position and includes chart plots and entry and exit alerts. The document describes the rules and default backtest settings but supplies no performance results or evidence that the setup is profitable. Outcomes may differ in live trading because of slippage, spreads, liquidity, and market conditions; results also depend on instrument, timeframe, and regime.

Key ideas

• An inside bar is defined by a high below the prior high and a low above the prior low.
• The mother candle's high and low form the breakout levels and define the initial stop boundary.
• Entries require a closing price beyond a mother-candle boundary, with one attempt per structure.
• The target scales the initial risk by a configurable reward multiple.
• An optional ATR trail can tighten the stop as price advances, but the document provides no performance evidence.

Tags

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