Testing Inside Bar Breakouts with Volatility Filters and Risk-Based Sizing
Summary
This expert advisor is presented as a research tool for testing an Inside Bar continuation hypothesis. It identifies a signal candle fully contained within the preceding main candle's range. A bullish main candle triggers a buy stop above its high; a bearish one triggers a sell stop below its low. The stop-loss distance is a fraction of the main candle's range, and take profit is derived from a chosen risk/reward ratio. An optional ATR filter requires the main candle to be large relative to recent volatility, while candle-body and inside-bar-size filters further qualify setups.
Parameters also cover fixed-lot or percentage-risk sizing and expiration of unfilled pending orders. In percentage-risk mode, sizing uses the account balance captured when the advisor starts, so risk does not compound or contract as the balance changes. The document says the system was tested on EURUSD, gold, and the S&P 500 across hourly and fifteen-minute charts, but provides no results in the text. It emphasizes independent validation; performance may vary by instrument, timeframe, and parameter choice, and the described tests do not establish real-money suitability.
Key ideas
- An Inside Bar setup requires the signal candle to sit entirely within the main candle's range.
- The main candle's direction determines whether a buy stop or sell stop is placed beyond its range.
- Stop loss scales with the main candle range, while take profit uses a configured risk/reward ratio.
- Optional ATR and candle-size filters constrain which patterns qualify, and pending orders can expire after a chosen number of bars.
- Percentage-risk sizing uses the balance captured when the advisor starts, and the stated market tests do not include results in the document.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.