An inside day (entirely within prior day's range) combined with 20-day-low ATR signals double volatility compression. A coiled spring. Trade the break of the inside day in the direction of trend for outsized moves.
Indicators Used
ATREMA 50
Rules
📈 Long Inside-Day Break
- Inside day confirmed: today's high < yesterday's high, today's low > yesterday's low
- Current ATR(14) at 20-day low (volatility compressed)
- Price above EMA 50 (uptrend context)
- Next day: break above inside day's high
- Enter long on breakout
- Stop: below inside day's low
- Target: 2× inside day range, or prior swing high
Inside Day
Required
20-day low
ATR Level
💡 Pro Tip
The double compression (inside day + low ATR) often precedes news-driven moves or fundamental catalysts. Check the economic calendar before entering. Entering right before a major release can lead to a breakout that immediately reverses on the data.