Inside Day Trend Breakthrough Strategy

 

Inside Day means when a currency pair moves between the range of changes in the previous day, the high and low points of the last day. The longer the inside day, the more likely volatility will increase, or a trend will break out.

Using the daily chart is the optimal condition for this strategy, but utilising charts with more extended time zones can identify opportunities for trend breakthroughs more clearly. The important thing is not being misled by the wrong breakthrough signal and finding a valid breakthrough signal.

Traders using the daily chart can detect a trend break for a particular pair of currencies before releasing critical economic indicators. This strategy is common for most call pairs, but sometimes it can send the wrong signal for call pairs such as EUR/GBP, USD/CAD, EUR/CHF, and AUD/CAD.

 

TRADING METHOD

 

BUY

 

1. Look for a currency pair that lasts at least two days for Inside Day.

2. Place a buy pre-order on top of the previous day’s high of 10 pips on the currency pair.

3. When there is a double return, liquidate half of the position to take profit. Set a trailing stop according to the preferred method for another half of your fund.

4. If it is a false signal, place a stop order of 10 pips above the Inside Day low.

 

SELL

 

1. Look for a currency pair that lasts at least two days for Inside Day.

2. Place a sell pre-order below the previous day’s low of 10 pips on the currency pair.

3. When there is a double return, liquidate half of the position to take profit. Set a trailing stop according to the preferred method for another half of your fund.

4. If it is a false signal, place a stop order of 10 pips below the Inside Day high.