I have been following this thread for weeks now and have printed most of the charts and pictures. Somewhere in this thread there is a beautiful picture showing IB/OB and labeling exactly what it is. In fact, I printed it out and am staring at it right now. It is obvious from the picture. The confusion for me was that the original system rules stated that "The inside bar is simply when the current bar is less than or equal to the bar to the left of it." For someone who follows things to the letter, this meant that for example, the high could be equal to the previous bar but have a lower high and still be an IB. Or, the low could be equal but it could have a lower high. From all of the examples and pictures shown, this is clearly a wrong interpretation! May I put this to rest finally, by saying that your definition is the definitive answer?
And now I know my first psychological weakness for my trading plan (overcomplicating everything)
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Originally Posted by daudi81
It took me a bit to understand also.
An IB will have a shorter high (including shadow), AND a higher low (including shadow) than the bar to the left of it. If you don't understand shadow's then you should read a tutorial on how to read candlestick charts.
The highs and lows can also be equal.
Visualize sticking the bar on the right INSIDE the bar to the left. If it fits without it's high's and low's sticking out then it's an inside bar.
Just look at the pictures in the thread, most of them have IB / OB setups circled in their charts. Pretty easy to spot once you get it.
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