Strategy – “Intraday bar”. Anton Hanzenko.
The strategy “Intraday Bar” refers to the strategies of candle setups, like Pin-Bar. Setup is one of the most common and time-tested. “Intraday bar” – the figure is ambiguous, because it can indicate both continuation of the trend and its reversal. Therefore, this setup should be used with caution and observance of the rules.
“Intraday bar” is a solid candle (mother candle) followed by a small candle that is completely inside the range of the previous one.
The main condition of this setup: the mother candle should be at least twice as large as the inner candle. The setup is considered not correct if the inner candle is more than ½ of the mother candle. Also, the setup is not correct if the mother candle is too long. As a rule, such long candles are formed after strong news.
The uncertainty of the “Intraday Bar” strategy is the further movement of the price, since this setup can indicate both continuation of the trend and a reversal. In most cases, “Intraday Bar” indicates a trend reversal, but there are exceptions. In this case, the existing support and resistance levels help. If this setup is formed far from significant levels – it is better to ignore it. Otherwise, there is a high probability that the price will fend off from strong levels.
An example of strategy development is given in the figure. In the first case, after the formation of the “Intraday Bar” setup, the price has renewed the minimum of the month and fended off this level. In the second example, the reversal “Intraday Bar”, which fended off recent highs.
The “Intraday bar” of trend continuation is given in the figure above. Here one should note the fact that the price repeatedly breaks through the resistance level, which was previously broken through as a support level.
The entry points for this strategy are the breakthrough of the inner candle range. In order to do this the pending orders are used. The goal of the strategy is set at 70 to 80% of the size of the mother candle and not less than two stop-loss. Also, the goal may be the opposite end of the mother candle for the reversal “Intraday bar”.
For the “Intraday bar” of the continuing trend, it is worth resorting to rules with interest or a goal in the amount of two stop-losses. Protective orders are set, as a rule, for significant levels of support and resistance, but given that the stop will be at least half the expected earnings.
The strategy may seem very ambiguous due to the definition of support and resistance levels, but if you master its subtleties, the “Intraday Bar” strategy will bring a significant profit.
Happy trading, Gentlemen!
Hanzenko Anton