DIG Inside Bars
The DIG Inside Bars indicator is a unique indicator we have developed; it can be purchased only through our site. This indicator locates breakouts from sideways-moving markets and has proven to work on all time frames (minutes, daily, and weekly).
The indicator is based on candle patterns, where we have a large engulfing candle and a series of inside candles that follow it. You have the option to adjust the minimum and maximum number of inside bars. When a pattern like this develops, the market is moving sideways. This means that you should wait before making your decision on long-lasting trades or trade within the sideways-moving market. When the price does break out of the pattern, the market usually follows in that direction.
SCSS 60 Min Chart: The chart above shows three patterns. The main engulfing bar is marked with “[X]” of its high and low. The pattern consists of at least the minimum number of inside bars (set to 6 on the chart above); the yellow parentheses mark the bar where the pattern was found. The two lines mark the upper and lower boundaries of our pattern.
Note that when the upper boundary is broken, the price continues going up, which resulted in a nice long trade.
BIDU 15 Min Chart: The chart above shows two patterns, one long and one short. Note that when the pattern is used on lower time frames such as 15 minutes, we expect the movement after the break to be relatively short.
How to Exit the Trade?
First, use your knowledge and intuition and leave the trade when you feel that you have made enough profit or the trend is about to end.
When you enter a trade on a relatively low time frame such as 5 to 60 minutes, you usually expect the trade to result in movement that is equal to the size of the pattern. So, when the price action reaches a profit equal to the height of the pattern, you can either close out the entire trade or sell off half and place a tighter stop. Together with this approach, we recommend that you use a trailing stop such as DIG Trailing Stop.
BIDU 15 Min Chart When a trade is entered on a medium or high time frame, we expect the trade to result in a large, long movement. Usually, a long movement tends to have pullback, so remember to give the trade some air; don’t place your stops too close.
We recommend you place the initial stop on the opposite boundary of the pattern and use a trailing stop to exit the trade. Closing of a part of the position when a certain profit is reached will help you increase your successful trade percentage.
- Adjustable minimum and maximum number of bars in the pattern.
- Adjustable extra clearance above and below the pattern for the boundaries.
- New Extra Feature – Filter bad trades by setting the volatility filter for the main bar.
- Select the trade during which you want the indicator to look for patterns.