X-Rated IBs & OBs (X-Rated IBs & OBs) | Forex Indicator Download - MT4/MT5 Resources

Hello everyone! !

I'm going to introduce you to a very handy IB/OB strategy. All you need is a bare chart with just one indicator (Average Directional Movement Index, ADX).

What are IB and OB?
- An IB, or inside bar, is a bar that is completely within the range of the previous bar, i.e. it has a higher low and a lower high than the bar immediately preceding it, or when it has a lower high and equal low, or vice versa.
- An OB, or outside bar, is a bar that has a higher high and a lower low than the bar immediately preceding it. Bars with higher highs and the same lows are also acceptable, and vice versa. (See, for example, post #40)

------------------------------------------------------------------------------------------------------------------
System explanation

Time range: 1 hour
S/L: 30 pips (including spread)
T/P: 40 pips + spread Currency pair: GBP/USD (you can try other pairs, but I only use this one)
Ideal trading hours: 6:00am - 5:00pm GMT
ADX indicator settings: Default settings for MT4 users.
ADX Line - Yellow
+DI - green dots -DI - red dots

If IB/OB is established, you can:

long
Wait until the next candle (confirmation candle) is fully formed and is a bull candle. Well, a good entry point is when the first or second candle after the confirmation candle goes up 5 points. Additionally, the entry point number one in this should meet the following criteria:

1. The ADX line (yellow line) is above 40.
2. The +DI line (green dashed line) crosses the -DI line (red dashed line) and the ADX line (yellow line), curving upward on entry.

short
Wait until the next candle (confirmation candle) is fully formed and is a bear candle. Well, a good entry point is when the first or second candle after the confirmation candle moves down 5 pips. Additionally, the entry point number one in this should meet the following criteria:

1. The ADX line (yellow line) is above 40.
2. The -DI line (dashed red line) crosses the +DI line (dashed green line) and the ADX line (yellow line), curving upward on entry.

Exception to the rule (long) : You can enter the market without a confirmation candle only if IB/OB is formed and during the formation of the confirmation candle the ADX line is above 20 and +DI crosses above -DI. Look for an entry 10 pips above the IB/OB high.

Exception rule (short): You can enter the market without a confirmation candle only if IB/OB is formed and during the confirmation candle formation the ADX line is above 20. And -DI intersects with +DI. Look for an entry 10 pips below the IB/OB low.

------------------------------------------------------------------------------------------------------------------

Phew! ! I know this is long, but once you read it a few times, it's not that hard to follow.

OK It's time to show some practical examples of this system. I know my paintings are not the best. :

Here's a deal I made today:
http://img217.imageshack.us/img217/2...een1mn0.th.jpg

Here's a trade I made on Friday:
http://img217.imageshack.us/img217/3...een2yn7.th.jpg

That’s the summary of this article. I'm always looking to improve the system, so please feel free to give me your thoughts on the system.

Thanks, I look forward to replying!