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In another week of the basic Inside Bar Momentum Strategy mech system in play, I was able to catch a couple of valid signals that were quickly blown out. In case you missed it, here’s a rundown of the system rules and some tweaks that I’m considering.

First off, I’ve marked the valid inside bars on the confirmation candles 0n USD/JPY’s 4-hour chart. Then I zoomed in to shorter-term time frames to see how the price ticks turned out before any early exit conditions were met.

USD/JPY 4-hour Forex Chart
USD/JPY 4-hour Forex Chart

Here’s a look at how price action fared on the 1-hour chart with the inside bar candles still marked, along with the entries and exits.

USD/JPY 15-min Forex Chart
USD/JPY 1-hour Forex Chart

If you prefer a table format, here’s a summary of the positions:

inside bar.fw

I actually thought that the second signal would yield a profitable position since the pair made a really strong rally, but it turns out the trade was stopped out on a small pullback before USD/JPY gained bullish momentum. In this case, system adjustments involving a trailing stop probably wouldn’t have saved the position and neither would specifying a ratio for the inside bar candles. Hmm, maybe a wider % stop loss to give the trade room to breathe before it establishes a direction? Plus a trailing stop?

I know, I know… Looking at one losing trade isn’t enough to gauge which adjustments might work best so I plan on taking note of potential tweaks as we go along with forward-testing. Got any other thoughts on this system you’d like to share?