Super effective Inside Bar NR4 strategy on low volatility days – Part 25

Super effective Inside Bar NR4 strategy on low volatility days – Part 25

This is an article about the extremely effective Inside Bar NR4 trading strategy when the market is moving sideways. Let’s add this strategy to your trading inventory because I believe it will help you avoid losses and make profits on less volatile days compared to trend trading. Now find out why it is worth your attention.

Remember a good strategy is one that you love, practice, and perfect it day by day.

What is the Inside Bar NR4 Strategy?

This is a strategy refined and perfected by Toby Crabel. It is based on 2 Price Action patterns, Inside Bar and NR4.

Inside Bar NR4 strategy
Inside Bar NR4 strategy

With Inside Bar, everyone knows that there are 2 candles, Mother Bar in front covering the entire high and low of the behind Inside Bar candle. And NR4 (Narrow Range 4) is the candle with the shortest length of the 4 adjacent candles.

Inside Bar and NR4 show that the market is less volatile at that time, that is, it is compressed. So combining Inside Bar with NR4, we will trade breakout when volatility returns.

Inside Bar NR4 entry rules

To maximize the effectiveness of the Inside Bar NR4 strategy, you need to follow the following order entry rules.

Open a bullish order when

  • The trend is bullish
  • An inside bar pattern with an Inside Bar candle with the shortest length of the last 4 candles (compared to the previous 3 candles)
  • Place a bullish pending order at the top of this candle
  • Wait for the breakout to trigger the order.

Open a bearish order when

  • The trend is bearish
  • An Inside Bar pattern with an Inside Bar candle with the shortest length of the last 4 candles (compared to the previous 3 candles)
  • Place a bearish order at the bottom of this candle
  • Wait for the breakout to trigger the order.
Inside Bar NR4 entry rules

Specific examples

EUR/USD currency pair in the H1 timeframe

The green arrow is the setup Inside bar NR4 – the inside bar candle has the shortest length compared to the previous 3 candles. This setup appeared at the support level in an uptrend. Thus, we place a bullish pending order at the top of this candle and it is activated on the next candle. You can see that this setup led to a very strong and beautiful bullish wave.

Enter a bullish order with the Inside Bar NR4 strategy
Enter a bullish order with the Inside Bar NR4 strategy

Importantly, this setup is supported by the previous bullish actions.

  • A bullish Pin bar pushed the price up when it hit the support level
  • The upward force was continued by the follow-through action of the market
  • The setup comes after a slight correction and is right at the support level. So it’s worth trading.

USD/JPY currency pair in the H1 timeframe

Open a bearish order with the Inside Bar NR4 strategy
Open a bearish order with the Inside Bar NR4 strategy

The red arrow is our setup. It satisfies all the conditions of the setup. The bearish pending order is placed at the bottom of this candle. Now let’s see what happens before that.

  • After a long uptrend, the market formed a Double Tops pattern – the possibility of a reversal from bullish to bearish is very high.
  • Bearish price action from the Double Tops
  • After the retracement, the price was strongly rejected by the long-tailed bearish Pin bar. The tail of this pin bar has shown strong selling, reinforcing the belief that the price will continue to fall in the future.

Inside Bar NR4 strategy review

Different from Bollinger Bands’ contraction, Inside Bar NR4 only shows a decrease in market volatility in the short term. Therefore, it is extremely important to look at the price action before the Inside Bar NR4 setups. The situation of the market at that time will determine whether the setup is successful or not.

When in the right context that the upside momentum is being compressed, Inside Bar NR4 can provide a very nice setup with low risk. Wish you success in finding profit with Inside Bar NR4.

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Super effective Inside Bar NR4 strategy on low volatility days – Part 25
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