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Re: Inside Bars



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>I am also tracking inside days....but not sure how to daytrade based upon
>them.
>
>Is it true that if an inside bar occurred yesterday...then today would be
a
>major move day?
>However, is it also true that the direction of the move is unknown...just
>the fact that there is a big move imminent?


Depending on a number of other important factors, the concept is to
buy/sell the Inside Day's high/low as a breakout - but there are quite a
lot of buts for an intraday bond trader!   (Clearly the Inside Day has to
have happened for the potential of the trade to exist, in answer to your
first question.)  A position trader has to set the right stop, taking the
overnight into account, but that is all a ball game I do not play, so I am
not in the least bit worried about it.

The direction is not known until it shapes up, on the day.   The overnight
may or may not give a clue and working out the r/r/r and where to put your
stop (usually behind the Inside Day's high/low) are, as usual, vital parts
of the pre-trade calculations.   You will naturally be looking for the
false breakout and how to deal with the situation.   Also, you may well
(for a totally different set of reasons) get into the trade well before it
reaches the line, as it were.

As you will have seen from the chart I posted, on many more occasions than
not, there is a decent move after an Inside Day.   Not knowing which way at
the outset is not a problem for the day trader.

Hope this helps.

Bill Eykyn
www.t-bondtrader.com






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