Outside In Trades

I haven't shown many outside in trades in the blog as they are too tempting for newer traders. Knife catching is a dangerous sport. The Outside In trades are tempting because if you have the right trade location then you take no heat on the trade.

With the markets as they are, I'm focusing very strongly on my discipline. There is less forgiveness for errors and I can get my head handed to me if I go off piste. My stats show more Outside In trades than in previous years. How you determine the right trade location is critical to the win rate on these trades.

Having a tested fixed stop and target can make this trade more mechanical and easier to do. So if you have a specific criteria to take the trade and automatically enter your tested fixed stop and target, you can create a trade with a high win rate and positive expectancy. Without this backtested trading plan, it's an alligator and can eat you up.

Today's DAX chart is a 2 minute chart as the market has been quiet.