Inside Bar Break (IBB) Strategy

Price Action Inside Bar

Break Trading Strategy
By: Alson Chew
By: Alson Chew
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PAM INSIDE BAR BREAK (IBB) STRATEGY

Background
PAM Inside Bar Break (IBB) is an optional strategy for trading upside/downside straight line continuation of
price action. There is no elements of manipulation as this strategy does not require force top/bottom
scenario. Hence, there is no need to check for presence of LP levels. We will discuss the criteria's in the
following slides.

Trader need to be familiar with PAM’s 3 main EXE and inside bar formation.

Common FAQ for IBB structure

1. Which time frame is suitable for IBB?

Weekly Chart
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2. How is IBB different from force strike formation?

For IBB we are trading the break of mother bar high fractal while force strike is a false break of mother bar
high. IBB looks similar to force strike formation, however their application is different.

Note: Force strike bar strategy is covered in force strike continuation and reversal lessons.

3. How do we know if upside IBB will turn into bearish force strike at key LP level?

Such scenario may happens when inside bar occurs at LP levels. If we are trading a valid upside IBB, we
will still go long even if there is presence of LP. We do not need to reference LP levels when trading IBB.

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UNDERSTANDING PRICE ACTION BAR FORMATION

SUMMARY OF THE 3 STANDARD BARS [email protected]

Bullish Bullish Ice Bullish Mark Bearish Bearish Ice Bearish Mark
PIN Bar Cream Bar Up Bar PIN Bar Cream Bar Down Bar

Top 1/3 Range Top 2/3

Range

Bottom 2/3 Range

Bottom
1/3
Range

Flush up bar is visually at least 1.5 times normal bar range and must be visually “outstanding”. A
guide is that when in doubt, usually it is not outstanding and most likely still considered mark up bar. A flush
up bar is bearish to a trader as opposed to mark up bar which is bullish to a trader.

Flush down bar is visually at least 1.5 times normal bar range and must be visually “outstanding”. A
guide is that when in doubt, usually it is not outstanding and most likely still considered mark down bar. A
flush down bar is bullish to a trader as opposed to mark down bar which is bearish to a trader.

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INSIDE BAR FORMATION – PRELUDE TO FORCE STRIKE FORMATION

Mother Bar Baby Bar

Baby bar within

CRITERIA
Mother bar range
• Baby bar must be equal or within Mother
bar range

• Mother bar or baby bar can be bullish or

bearish

Baby bar within SIGNIFICANCE

Mother bar range
• Inside bar shows a period of indecision on
the chart

• Inside bar should not be used as an

Baby bar outside of execution sign but a prelude to Force Strike
Mother bar range bar formation (next slide)

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UPSIDE INSIDE BAR BREAK (IBB) FORMATION
For Trading Upside Price Movement Continuation

1.) Concept of Upside Inside Bar Break (Upside IBB)

Recommended Time Frame: Weekly (4yr 1W)

Characteristic
1.) Prior upside price movement followed by IB formation (defined in the next slide)
2.) Price action has to be above 50sma.
3.) Mother bar has to be one of the 3 bullish EXE. Baby bar can be any type of bars as long as it is within
mother bar range.

Entry Rules
4.) Within next 3 bars after formation of IB, there must be a break bar (BB) that breach the mother bar high.
Example if the mother bar high is $45.00, long entry should be taken once break bar hit $45.00.

Exit Rules
5.) SL at 50% of mother bar range or low of break bar. Trader’s discretion based on “tightness” of entry and SL
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6.) Target projection exit based on 1.5 RR. Use find target in PAM excel to determine size and exit upside
target price.

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UPSIDE INSIDE BAR BREAK (IBB) FORMATION

Prior Upside Price Movement Definition

At least 2 bars out of prior 3 bars (preceding mother bar)

that opens lower than opening price level of mother bar

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DOWNSIDE INSIDE BAR BREAK (IBB) FORMATION
For Trading Downside Price Movement Continuation
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1.) Concept of Upside Inside Bar Break (Downside IBB)

Recommended Time Frame: Weekly (4yr 1W)

Characteristic
1.) Prior downside price movement followed by IB formation (defined in the next slide)
2.) Price action has to be below 50sma.
3.) Mother bar has to be one of the 3 bearish EXE. Baby bar can be any type of bars as long as it is within
mother bar range.

Entry Rules
4.) Within next 3 bars after formation of IB, there must be a break bar (BB) that breach the mother bar low.
Example if the mother bar low is $45.00, short entry should be taken once break bar hit $45.00.

Exit Rules
5.) SL at 50% of mother bar range or high of break bar. Trader’s discretion based on “tightness” of entry and SL
chosen.
6.) Target projection exit based on 1.5 RR. Use find target in PAM excel to determine size and exit upside
target price.

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DOWNSIDE INSIDE BAR BREAK (IBB) FORMATION

Prior Downside Price Movement Definition

At least 2 bars out of prior 3 bars (preceding mother bar)

that opens higher than opening price level of mother bar

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Upside Inside Bar Break Examples

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UPSIDE INSIDE BAR BREAK (IBB) FORMATION

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UPSIDE INSIDE BAR BREAK (IBB) FORMATION

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UPSIDE INSIDE BAR BREAK (IBB) FORMATION

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UPSIDE INSIDE BAR BREAK (IBB) FORMATION

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UPSIDE INSIDE BAR BREAK (IBB) FORMATION

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UPSIDE INSIDE BAR BREAK (IBB) FORMATION

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UPSIDE INSIDE BAR BREAK (IBB) FORMATION

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UPSIDE INSIDE BAR BREAK (IBB) FORMATION

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 Downside Inside Bar Break Examples

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DOWNSIDE INSIDE BAR BREAK (IBB) FORMATION

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DOWNSIDE INSIDE BAR BREAK (IBB) FORMATION

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DOWNSIDE INSIDE BAR BREAK (IBB) FORMATION

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DOWNSIDE INSIDE BAR BREAK (IBB) FORMATION

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DOWNSIDE INSIDE BAR BREAK (IBB) FORMATION

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TC2000 SCRIPTS FOR INSIDE BAR BREAK (IBB) FORMATION

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TC2000 SCRIPTS FOR INSIDE BAR BREAK (IBB) FORMATION

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TOS SCRIPTS FOR INSIDE BAR BREAK (IBB) FORMATION

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 Inside Bar Break (IBB) Strategy
Price Action Inside Bar
Break Trading Strategy
By: Alson Chew
By: Alson Chew
[email protected]
All Adam Khoo Updated Courses, Communities and CSM
Available. Courses From other creators also Available.
© 2021 Piranha Pte Ltd. All rights reserved.

Copyright © 2021 Adam Khoo Learning Technologies Group Pte Ltd. All Rights Reserved. 27