Trading Failed Inside-Bar Breakouts with Timed Exits

Summary

This strategy looks for a failed move beyond an inside bar’s range. It first identifies a bar contained within the range of the preceding bar. A long signal follows when the next bar trades below the inside bar’s low but stays below its high, then closes back above the inside bar’s low. The short setup mirrors this: price moves above the inside bar’s high while remaining above its low, then closes below that high.

The strategy enters in the direction of the reversal and closes after a configurable number of bars, using the signal condition’s historical occurrence to time the exit. The accompanying note suggests varying the forward interval to inspect signal profitability over different holding periods, but it reports no actual results. There are no stated filters, position-sizing rules, or protective stops, so the script is a simple pattern test whose outcomes may depend heavily on market, timeframe, costs, and execution assumptions.

Key ideas

• The setup begins with an inside bar contained within the prior bar’s range.
• A move beyond one edge followed by a close back inside triggers a reversal entry.
• Long and short conditions mirror each other around the inside bar’s boundaries.
• Positions close after a configurable number of bars tied to the signal’s history.
• The document proposes varying the holding interval but provides no profitability results.

Tags

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