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On my previous article I presented a short-term strategy based on inside bars, which used a time-based exit, instead of fixed stop-loss and take-profit orders. Some community members suggested a few changes to it, including the inclusion of a fixed stop-loss, which I did his time, let's see if it improved the system's profitability. _______________________________ ► Different types of stop-losses Trading without any kind of stop-loss is asking for trouble, period. Sooner of later there will be a trade that will never return to its entry price, and will keep on going against you until your account is destroyed. However, stop-losses come in different flavors: You have the typical fixed price-based stops, which never change. Manual or automatic trailing stops, which follow the price as it moves in your favor, thus locking more and more profit (or reducing the loss until breakeven point). And then there's time-based stops, in which the trader manually closes the trade (or the platform does it if it has been programmed that way) after x number of periods/candles. My original "inside day strategy" uses time-based stops, so even though it looks like it does not have stops, …
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ELENA_M avatar
ELENA_M 26 Feb.

useful article, we always have a choice in SL changing

DumbAsArock avatar

I wonder how this would work with Di Napoli levels? +1

doctortyby avatar
doctortyby 28 Feb.

So it seems that you have powerful role models to base on ;) I must admit that this article is not as near as interesting as the first one... Anytime the exit is much more important than the entry

SpecialFX avatar
SpecialFX 28 Feb.

Yeah, I see your point doc, I actually only wrote this article because there were some comments on how the inside day strategy would eventually work with a fixed stop loss, so I tested it, the only way we can be sure of anything is by extensively testing it :) This article is basically an extension of the first one.

Sergei2 avatar
Sergei2 8 July

Hi SpecialFX, great article! I understand you consider a candle an "inside one" if it's high/low are withing the previous high/low. - But tell me, for this strategy - do the body (open-close) also needs to be within the previous open-close? Awaiting for your reply with great interest!

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A couple of weeks ago I got a private message from a community member, asking me to write something specific to short-term traders, if possible. Taking the request into consideration I'm going to describe a trading technique where trades will last two days only, no more no less. If two days is already long term for you, this system can be adapted to shorter time frames, although the results will be poorer, so take that into consideration. _________________________ ► What is an inside day? An inside day (also called inside bar/candle in intraday charts) occurs when the highest price is lower than the previous day's high, and the lowest price is higher than the preceding day's low. Here's a perfect example: The common interpretation of inside days is that they are a sign of consolidation, where neither supply or demand are in control. It can also be considered a pause in a current trend, or the early signs of a counter trend movement. So, basically, it's a neutral candle that does not provide any positive trading edge. Well...not so fast, young Jedi! In trading, it helps to be a free-thinker and avoid subscribing to what the herds say. Try to look at your charts from a diffe…
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DumbAsArock avatar

Extremely well written and presented. +1

GreenTrader avatar

good job +1

citikot avatar
citikot 4 Mar.

good job! +1 also!

foxybaby avatar
foxybaby 7 Mar.

Good strategy, would there be an automated strategy for jforex available?

fprophet avatar
fprophet 12 Mar.

When trading Engulfing Bars I believe we need to take into account any near Support/Resistance and/or significant Round numbers - and then if we are not in danger of bouncing off any these and the BBands are widening ... then it looks like easy money - but of course then there are only a few set-ups per month per instrument.

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