Inside Bar Breakout
An inside day is the market holding its breath. Price spends the whole session inside yesterday's high and low, volatility contracts, and stops pile up on both edges. That compression resolves, and on the Nasdaq it breaks out of yesterday's range 83% of the time. The only real question is which way.
An inside day is a session whose entire range fits within the prior day's high and low. It is a compression signal: the tighter the coil, the more energy behind the release. The play is to trade the breakout of the prior day's high or low, with the opposite side as your stop and a measured move as the target. Direction matters more than the break itself, and on the Nasdaq the upside break is the higher-quality side. When price closes above the prior high it holds more often than a close below the prior low does, so lean long unless the tape says otherwise.
How to trade it
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See what you get with ProWhen it fails
The one inside day in six that stays trapped tends to follow a wide, exhausted prior day. After a 2%+ prior range the breakout rate falls to 72%; after a quiet one it climbs to 94%. Tightness is the whole tell, so weight the coils, not every inside day.
Compression cuts both ways: an inside day can break, suck in the breakout crowd, and snap back the other way. That is why the stop sits on the far side of the range, and why the upside break, which holds more often, is the side to trust.
Related strategies
You know the setup. Here is when it pays.
Market Edge tells you when a setup is worth trading and when it isn’t. Built on five years of real market history, it measures how any setup actually behaved, by day of the week, by time of day, by the state of the market, and shows the conditions where it paid and the ones where it didn’t. Same setup, very different odds depending on when you take it.
83% is the headline. The trade lives underneath it, in the conditions, so you take the version with the edge and skip the one that looks identical but isn’t.
