Inside Bar , outside bar, Double inside bar Binary Options Strategy One Touch Strategy

Inside Bar, Outside Bar & Double Inside Bar: One Touch Binary Options Strategy

Price action patterns have stood the test of time because they reveal the raw psychology of the market without the lag that plagues most indicators. This strategy combines three of the most reliable single- and multi-candle formations — the inside bar, the outside bar, and the double inside bar — with the Gann HiLo Activator as a trend filter. The result is a flexible approach that works equally well for One Touch binary options, intraday Forex scalping, and daily swing trading.

In my own experience testing candlestick-based systems across dozens of instruments, the biggest edge comes not from the pattern itself but from trading it only in the direction of the prevailing trend. That single rule filters out the majority of losing setups and is the backbone of everything below.

Understanding the Three Core Patterns

Before placing a single trade, you must be able to recognise each formation instantly on your chart. They are simple, but precision matters.

The Inside Bar

An inside bar is a candle whose entire range — both the high and the low — is contained within the range of the previous candle (the “mother bar”). It signals a pause, a moment of consolidation and indecision. When it forms during a strong trend, it often represents a brief rest before the market continues in the same direction. This makes it an excellent continuation signal.

The Outside Bar

An outside bar is the mirror opposite: its high is higher and its low is lower than the previous candle, completely engulfing it. This reflects a burst of volatility and a shift in the balance of power between buyers and sellers. In the context of a trend, an outside bar that closes in the trend’s direction confirms strong momentum.

The Double Inside Bar

The double inside bar is two consecutive inside bars, each contained within the one before it. This represents an extended compression of price and a tightening of the range. Compression is almost always followed by expansion, so a double inside bar often precedes a sharp, explosive move — ideal for a One Touch option that pays out when price reaches a target level.

The Role of the Gann HiLo Activator

The Gann HiLo Activator is a moving-average based trend indicator that plots as a coloured line following price. When the line sits below price and reads bullish, the trend is up; when it sits above price and reads bearish, the trend is down. Its purpose in this system is simple but non-negotiable:

• Only take bullish patterns (buy or CALL) when the Gann HiLo Activator confirms an uptrend.
• Only take bearish patterns (sell or PUT) when it confirms a downtrend.
• Ignore every pattern that forms against the direction of the activator.

This alignment is what transforms a mediocre pattern-only system into something with a genuine statistical edge.

Trading Rules Step by Step

The mechanics are deliberately mechanical — you want to remove emotion and hesitation from the process.

• Timeframes: 30-minute and 60-minute charts (or higher) for intraday and daily trading.
• Markets: Forex, stocks, futures, commodities, and treasury bonds.
• Step 1: Identify the trend using the Gann HiLo Activator.
• Step 2: Wait for a valid inside bar, outside bar, or double inside bar in the direction of the trend.
• Step 3: Enter at the open of the next bar after the pattern completes.
• Step 4 (targets): In an uptrend, set your target 10–15 pips above the close of the pattern bar. In a downtrend, set it 10–15 pips below. For daily trading, extend the target to 20–30 pips.
• For One Touch options: place the touch level at that same 10–15 (or 20–30) pip distance and choose an expiry that gives price enough time to reach it.

Because this system also functions as a scalping strategy, spot Forex traders can use a stop loss of 10–15 pips, keeping risk symmetrical and tight.

A Practical Example

Imagine you are trading EUR/USD on the 60-minute chart. The Gann HiLo Activator has flipped bullish and sits neatly below price — the trend is up. After several strong green candles, a small inside bar forms, its entire range tucked inside the previous bar. This is your signal.

You wait for that inside bar to close and enter a CALL / buy at the open of the very next candle. The pattern bar closed at 1.0850, so you set a target of roughly 1.0862 (about 12 pips above). For a One Touch option you place the touch level at 1.0862 with a two-hour expiry. Price expands upward as expected, tags the level, and the option finishes in the money. In the sample chart originally published with this system, 8 patterns produced 8 trades: 6 wins and 2 losses — a reminder that even a solid setup will produce losers and that consistency comes from repetition, not perfection.

Risk Management

No pattern wins every time, and the two losses in that sample sequence prove it. Protecting your capital is what keeps you in the game long enough for your edge to play out.

• Fixed stake sizing: Risk no more than 1–2% of your account per trade, whether that is a spot stop loss or a binary options stake.
• Respect the stop: On spot trades, keep the 10–15 pip stop loss firm. Do not widen it hoping a losing trade recovers.
• Avoid news spikes: High-impact economic releases can produce false patterns and violent whipsaws. Stand aside around major announcements.
• Quality over quantity: Only trade patterns that align perfectly with the Gann HiLo trend. A skipped mediocre setup is money saved.
• Track your results: Keep a journal of every pattern, entry, and outcome so you can measure your real win rate on your chosen instruments.

Frequently Asked Questions

Which pattern is the most reliable?

In trending conditions, the double inside bar often produces the cleanest breakouts because compression precedes expansion. However, all three perform best when confirmed by the Gann HiLo Activator.

Can I use this on the 5-minute chart?

It is designed for 30-minute charts and above. Lower timeframes generate more noise and false signals, so I recommend sticking to the intended timeframes until you are experienced.

Does it work outside of binary options?

Yes. The same rules apply directly to spot Forex, futures, and CFDs — simply use the pip target as a take profit and the 10–15 pip stop loss for risk control.

What if a pattern forms against the trend?

Skip it entirely. Counter-trend patterns are the primary source of losing trades in this system, and discipline here is what separates profitable traders from the rest.

As with any strategy, backtest it on a demo account and confirm it fits your instruments and personality before risking real capital.