I love price action and I recommend it to everybody, especially Al Brooks trading courses, but we have to put everything we learn in to test.
Inside and outside bars are meant to change the trend. but if you simply look at them like that, they fail in half occasions, which is a lot!
look at the picture:
the blue arrows show inside bars, the yellow ones sho outside bars. the red crosses show the ones which failed reversing the trend. almost 50%
Solution?
it's not that simple, every single inside or outside bar won't change the trend. instead you may use this strategy:
- Look for the Inside/outside Bar in a downtrend.
- Wait for the price bar to go bearish before entry.
- Set a stop-loss near the recent high from the Inside/outside Bar.
- Exit the trade when the price is at the low level.
and reverse for a uptrend.
this will reduce the failures to 20%
