Price Compression to Expansion Strategy
This strategy focuses on one of the most fundamental market patterns: the Inside Bar. It seeks to exploit volatility compression followed by a directional breakout, often occurring before significant price movements. With a configurable breakout buffer and auto flip logic, this bot is ideal for intraday or swing trading setups.
Pattern Logic:
Inside Bar Definition:
A candle is considered an "inside bar" if its high is lower than the previous candle’s high and its low is higher than the previous candle’s low. This structure often signals market indecision and upcoming expansion.
Breakout Confirmation (1-bar delay):
Trade is not taken during the inside bar, but only on the next candle, if the price:
Breaks above the high of the inside bar + configurable buffer
Breaks below the low of the inside bar – configurable buffer
Breakout Buffer (%):
A small margin (e.g., 0.01%) is added to reduce noise and avoid false triggers.
Entry & Flip Logic:
Long Entry:
Triggered if previous bar is an inside bar and current close > inside high × buffer.
If currently short, the position is flipped.
Short Entry:
Triggered if previous bar is an inside bar and current close < inside low × buffer.
If currently long, the position is flipped.
Position Flip Mechanism:
The bot can automatically switch direction by closing the opposite position first before entering the new trade.
Visual Features:
Entry signals are marked on chart: Green triangle below bar → long breakout Red triangle above bar → short breakout Clean, minimal interface — ideal for active monitoring or backtesting.
Strategy Settings:
Default Position Size: 50% of equity Pyramiding: Up to 5 layered entries allowed Commission: Includes 0.05% realistic fee modeling
Best Use Cases:
Performs best on 15m, 1h, or 4h timeframes. Particularly useful during consolidation phases, news-driven compression, or after high-volatility expansions. Works on crypto, forex, indices, and stocks.
Final Notes:
Inside bar breakouts offer excellent risk-to-reward setups, but not every breakout leads to continuation. For added robustness, users can combine this with volatility filters or higher timeframe trend checks. Note: Different assets may require specific parameter adjustments. Users are responsible for optimizing the strategy settings for the asset they trade. Please ensure you fine-tune the parameters according to your trading pair.
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