Exterior Bar Buying and selling System -MANUAL – Buying and selling Methods – 27 February 2026

1. INTRODUCTION

OutsideBarTradingSystem 1.00

2-Bar Continuation Sample with Vary-Engulfment Evaluation

Writer: Ich Khiem Nguyen | MQL5: https://www.mql5.com/en/customers/khiemni/vendor

OutsideBarTradingSystem detects Exterior Bar candlestick patterns in your MetaTrader 5 charts robotically. The indicator evaluates every accomplished bar pair towards 4 structural gates, scores surviving patterns throughout six weighted high quality components, and locations pending purchase cease or promote cease orders on the breakout degree when a sound Exterior Bar is confirmed. Entry value, cease loss, and take revenue ranges are drawn straight on the chart so you possibly can assess the commerce alternative moderately than carry out the calculations manually.

What Is an Exterior Bar Sample?

An Exterior Bar is a two-candle continuation formation the place the second candle’s vary utterly encompasses the primary candle’s vary. The second candle’s excessive exceeds the primary candle’s excessive, and the second candle’s low falls beneath the primary candle’s low. This vary enlargement alerts renewed volatility and directional dedication within the course of the sample’s context (uptrend for bullish Exterior Bar, downtrend for bearish Exterior Bar).

The Exterior Bar represents value vary enlargement after consolidation. Moderately than instantly closing throughout the first candle’s vary (which might point out indecision like an Inside Bar), the second candle’s vary enlargement establishes that consumers or sellers have seized management and pushed value to new extremes. This construction usually precedes continued motion within the established development course.

Bulkowski’s analysis ranks the Exterior Bar at place 2 amongst continuation patterns, with a 58% win price in bull markets when the breakout is upward. The Exterior Bar is a reversal of the Inside Bar sample — the place Inside Bar represents consolidation, Exterior Bar represents enlargement and momentum dedication.

Bullish Exterior Bar

Seems throughout an uptrend or after a consolidation breakout above a resistance degree. Bar 1 is any candle (giant or small). Bar 2 engulfs bar 1’s complete vary: HIGH_2 > HIGH_1 AND LOW_2 < LOW_1. Each bars sometimes shut increased (bullish physique shade), confirming that consumers keep management. Entry is a pending purchase cease order positioned barely above bar 2’s excessive (HIGH_2 + 0.05×ATR), triggering if value breaks above the engulfing candle.

Bearish Exterior Bar

Seems throughout a downtrend or after a consolidation breakdown beneath a help degree. Bar 2 engulfs bar 1’s complete vary. Each bars sometimes shut decrease (bearish physique shade), confirming that sellers keep management. Entry is a pending promote cease order positioned barely beneath bar 2’s low (LOW_2 – 0.05×ATR), triggering if value breaks beneath the engulfing candle.

Uptrend Context Detection

The indicator checks the development previous to the sample formation. If the prior bars present increased lows and better highs, the sample is assessed as a bullish Exterior Bar continuation. The context detection examines the three bars earlier than bar 1 to find out development course alignment.

How the Indicator Finds Patterns

The indicator evaluates every potential two-bar sample towards 4 sequential gates. All 4 should cross for a sign to be generated.

1. Vary Engulfment gate: Bar 2’s excessive should exceed bar 1’s excessive, and bar 2’s low should fall beneath bar 1’s low (HIGH_2 > HIGH_1 AND LOW_2 < LOW_1). This confirms the vary enlargement that defines the Exterior Bar construction.

2. Bar 2 Vary Measurement gate: Bar 2’s complete vary should signify at the least the minimal required vary/ATR a number of (Commonplace: 0.50×ATR, Strict: 0.60×ATR). This confirms that bar 2 is a big range-expanding candle, not a small engulfing spike.

3. Bar 2 Physique Measurement gate: Bar 2’s physique should signify at the least the minimal required physique/ATR a number of (Commonplace: 0.20×ATR, Strict: 0.25×ATR). This ensures the candle has significant construction past simply wicks, decreasing whipsaw danger on pure spike patterns.

4. High quality gates: Bar 2’s relative vary (bar 2 vary / bar 1 vary) should exceed the minimal threshold (Commonplace: 1.20×, Strict: 1.30×), and physique ratio have to be enough (Commonplace: 0.40, Strict: 0.45). These gates affirm that the engulfment is significant and the candle isn’t just marginally bigger.

Solely candles passing all 4 gates proceed to high quality scoring and sign registration.

High quality Rating — Evaluating Sample Energy

Each sample that clears detection receives a top quality rating between 0.00 and 1.00. Six components contribute to this rating, every weighted by its contribution to the Exterior Bar’s continuation reliability.

High quality Components

QF-1 and QF-2 carry equal weight (0.20 every) as a result of each contribute to the core structural requirement: vary enlargement. Vary/ATR measures absolute volatility enlargement; Relative Vary measures enlargement relative to the instantly previous candle.

Rating Grades

• Grade A (0.80 – 1.00) — Wonderful: Massive vary enlargement with stable physique construction and powerful development alignment
• Grade B (0.60 – 0.79) — Good: Dependable Exterior Bar with clear vary engulfment and reasonable physique high quality
• Grade C (0.40 – 0.59) — Common: Legitimate construction however vary enlargement is modest; use with further affirmation
• Grade D (0.20 – 0.39) — Beneath Common: Marginal setup; increased false breakout danger
• Grade F (0.00 – 0.19) — Poor: Keep away from buying and selling these alerts

High quality Threshold

The default minimal high quality is 0.30. Adjusting this threshold modifications which patterns seem on the chart:

• 0.50 – 0.65: Reveals solely probably the most clearly expanded Exterior Bars with robust vary/ATR and stable physique metrics — fewer alerts with increased per-signal high quality
• 0.20 – 0.30: Reveals extra alerts together with weaker enlargement examples — helpful for analysis or finding out the sample throughout completely different market circumstances
• Tip: Begin with the default 0.30 in your chosen image and timeframe and observe a number of dozen alerts earlier than adjusting

Entry Mode: Pending

Exterior Bar patterns use pending purchase cease or promote cease orders positioned on the breakout degree moderately than quick entry at bar shut. When a sound Exterior Bar is confirmed, the system creates a pending order at HIGH_2 + 0.05×ATR (bullish) or LOW_2 – 0.05×ATR (bearish). The order prompts provided that value breaks above (bullish) or beneath (bearish) that degree, capturing the breakout transfer.

This displays the character of the sample: bar 2’s vary engulfment establishes enlargement potential, however the precise directional dedication happens at breakout. Ready for the breakout ensures entry aligns with market consensus moderately than getting into speculatively at bar shut.

Buying and selling Ranges

Bullish Exterior Bar:

• Entry = Pending Purchase Cease at HIGH_2 + 0.05×ATR
• Cease Loss = sample low − 0.25×ATR

Bearish Exterior Bar:

• Entry = Pending Promote Cease at LOW_2 – 0.05×ATR
• Cease Loss = sample excessive + 0.25×ATR

The sample low/excessive is the minimal/most of bar 1 and bar 2. The cease loss buffer of 0.25×ATR is positioned past this excessive. A break past the sample excessive invalidates the continuation premise.

Take revenue ranges are calculated from entry utilizing configurable risk-reward multiples (default: 1R, 2R, 3R, 4R from entry to cease distance).

What You See on the Chart

When an Exterior Bar sample passes all detection gates and high quality filters, the indicator attracts the next:

Sign Markers

• Arrow icons: Upward inexperienced arrows mark bullish Exterior Bar patterns; downward pink arrows mark bearish patterns. Grey arrows point out alerts blocked by an energetic filter.
• High quality labels: A numeric rating (e.g., “0.65”) seems close to every sign, exhibiting how the sample ranked throughout all six high quality components.

Buying and selling Strains

• Entry line: An orange horizontal line on the pending order degree — HIGH_2 + 0.05×ATR (bullish) or LOW_2 – 0.05×ATR (bearish)
• Cease Loss line: A pink horizontal line labeled “SL” — positioned past the sample excessive with an ATR buffer
• Take Revenue strains: As much as 4 inexperienced horizontal strains labeled TP1 by TP4, spaced at configurable R:R multiples from the entry degree

Visible Zones

• Sample spotlight: A shaded rectangle spans each bars of the Exterior Bar, making it simple to establish which pair triggered the sign. The danger zone between entry and SL is shaded in pink; reward zones between entry and every TP degree are shaded progressively lighter.
• Monitoring dots: Small coloured dots replace because the sign state modifications — white for pending (order positioned, awaiting breakout), yellow for energetic (breakout triggered, commerce reside), inexperienced for goal hit, pink for cease hit.

Sign Lifecycle

1. Pending: Pending purchase cease or promote cease order is positioned at breakout degree — ready for value to interrupt above/beneath
2. Energetic: Breakout triggered, commerce entry occurred, commerce is reside
3. Goal Hit: Value reached a take revenue degree
4. Cease Hit: Value reached the cease loss

Settings You Can Regulate

Detection Parameters

Detection Preset Values

Customized Threshold Parameters

Settings Ideas

• Start with the Commonplace preset and default high quality threshold in your chosen image; observe at the least two to 3 weeks of alerts earlier than adjusting
• If Commonplace produces too many alerts, increase Min High quality to 0.50 moderately than switching to Strict — this preserves detection sensitivity whereas filtering out weaker examples
• The vary enlargement gate (0.50× ATR Commonplace) permits reasonable enlargement; on risky devices, improve to 0.60 for extra pronounced vary dominance
• Keep away from slicing the SL buffer beneath 0.20×ATR — the sample excessive is the logical invalidation level, and a few retesting is regular earlier than the transfer develops

Finest Timeframes and Markets

Really useful Timeframes

• H1 — High quality: Excessive | Frequency: Medium | Finest for: Day merchants looking for clear range-expansion setups at intraday help and resistance; advisable place to begin
• H4 — High quality: Excessive | Frequency: Decrease | Finest for: Swing merchants who need well-formed Exterior Bar patterns with robust follow-through potential
• M15 — High quality: Medium | Frequency: Excessive | Finest for: Scalpers wanting frequent alerts throughout energetic session hours
• D1 — High quality: Highest | Frequency: Low | Finest for: Place merchants looking for textbook Exterior Bar formations at main each day construction ranges

Finest Markets

• XAUUSD (Gold): Exterior Bar patterns on H1 and H4 often mark momentum continuation factors, significantly throughout London and New York session crossovers
• Main foreign exchange pairs (EURUSD, GBPUSD, USDJPY): Exterior Bar formations are widespread after vary breaks, particularly close to spherical numbers and session open costs
• Indices (US30, NAS100): Exterior Bar patterns close to prior highs can mark continuation entry factors after breakouts
• Oil (USOIL): Sturdy Exterior Bar formations seem after sharp upward or downward strikes on H1 and H4

The indicator works on any image and timeframe. H1 with the Commonplace preset on XAUUSD is the advisable beginning configuration.

Getting Began — Fast Setup

1. Open MetaTrader 5 and cargo a chart (XAUUSD on H1 is an effective place to begin)
2. Within the Navigator panel (Ctrl+N), develop Indicators → Customized and find OutsideBarTradingSystem
3. Drag the indicator onto the chart
4. Within the settings dialog, choose Detection Preset (Commonplace advisable for first use) and click on OK — the indicator will scan historical past and show detected patterns instantly
5. Observe the alerts: inexperienced upward arrows point out bullish Exterior Bar patterns; pink downward arrows point out bearish patterns
6. Verify the standard rating on every sign — give attention to patterns scoring 0.50 or increased when beginning out
7. Elective: Allow alerts within the ALERTS part to obtain notifications when new patterns kind in real-time

All Options at a Look

• Automated bullish and bearish Exterior Bar two-candle detection on any image and timeframe
• 4-gate structural detection: vary engulfment, bar 2 vary/ATR, bar 2 physique/ATR, relative vary and physique ratio high quality gates
• 6-factor weighted high quality scoring (vary/ATR 0.20, relative vary 0.20, CLV 0.20, physique ratio 0.15, development alignment 0.15, physique shade 0.10)
• Pattern context detection utilizing 3-bar prior value motion and directional evaluation
• 3 detection presets: Commonplace, Strict, Customized (user-defined thresholds)
• Pending purchase cease or promote cease entry at breakout degree (not quick)
• Sign states and lifecycle monitoring
• High quality filter to suppress weak patterns beneath threshold
• Excessive zone filter (overbought/oversold rejection)
• Stoploss hunt filter (liquidity sweep validation)
• Reverse sign filter (forestall conflicting alerts)
• Danger/Reward with 3 cease loss strategies (Donchian Channel, ATR, Sample)
• As much as 4 take revenue ranges (TP1-TP4) at configurable R:R ratios
• Donchian Channel trailing cease loss
• MTF Scanner (as much as 150 symbols × 8 timeframes)
• Market construction evaluation (BOS / CHOCH)
• 4-channel alert system (popup, sound, push, e mail)
• Sign statistics dashboard
• Skilled chart themes (Darkish, Gentle, Customized)
• EA sign buffers for automated buying and selling

For detailed guides on every characteristic, see the MANUAL included with the indicator.

Frequent Questions

Q: What’s the distinction between Exterior Bar and Inside Bar?

Inside Bar represents consolidation and indecision: bar 2’s vary is totally contained inside bar 1’s vary (HIGH_2 <= HIGH_1 and LOW_2 >= LOW_1). Exterior Bar represents enlargement and dedication: bar 2’s vary utterly incorporates bar 1’s vary (HIGH_2 > HIGH_1 and LOW_2 < LOW_1). Inside Bar usually precedes a breakout; Exterior Bar usually confirms a breakout has begun.

Q: Why does the indicator use pending orders as a substitute of quick entry?

The Exterior Bar’s defining characteristic is that bar 2’s vary expands past bar 1’s extremes — the enlargement sign happens at bar shut, however the precise directional dedication and affirmation of continuation happens when value breaks above (bullish) or beneath (bearish) that vary. Ready for the breakout ensures entry aligns with market consensus that the enlargement is significant moderately than getting into speculatively at bar shut.

Q: How do I distinguish bullish from bearish Exterior Bars?

Bullish Exterior Bars sometimes happen throughout uptrends with each bars closing increased (bullish physique shade) and are entered with purchase cease orders above the excessive. Bearish Exterior Bars sometimes happen throughout downtrends with each bars closing decrease (bearish physique shade) and are entered with promote cease orders beneath the low. The indicator’s course filter and development evaluation detect this context robotically.

Q: What does “development alignment” imply for Exterior Bar?

The indicator checks the three bars earlier than bar 1 of the potential sample to determine whether or not an uptrend or downtrend is in place. If bars are making increased highs and better lows, an uptrend is established; if making decrease highs and decrease lows, a downtrend is established. Bullish Exterior Bars rating increased when forming throughout confirmed uptrends; bearish Exterior Bars rating increased throughout downtrends. This context detection aligns alerts with the continuation premise.

Q: Why does the indicator place breakout orders above the excessive as a substitute of precisely on the excessive?

Purchase cease orders are sometimes positioned barely above (sometimes HIGH_2 + 0.05×ATR) to make sure the order triggers cleanly on true breakout momentum moderately than on minor wicks or bid/ask unfold noise on the actual excessive. This buffer improves entry high quality by requiring barely extra conviction earlier than triggering.

Q: What if a number of patterns kind shut collectively?

If a number of Exterior Bar patterns kind on close by bars, the spacing filter prevents them from all showing as alerts. The Min Bars Between Patterns setting (default: 3 bars) ensures that solely the highest-quality sign is proven when patterns cluster. Regulate this setting in the event you choose to see all patterns no matter spacing.

What’s New — Model 1.00

That is the preliminary launch of OutsideBarTradingSystem. Key options embody:

• Exterior Bar bullish and bearish two-candle detection utilizing 4-gate structural validation
• 6-factor weighted high quality scoring with balanced give attention to vary enlargement (0.40 weight mixed) and construction high quality
• Pattern context detection from 3-bar prior value motion to tell apart bullish from bearish Exterior Bars
• Commonplace and Strict presets, plus absolutely customizable Customized threshold mode
• Pending purchase cease or promote cease entry at breakout degree above/beneath the engulfing candle
• 7-layer filter chain (High quality, Excessive Zone, Route, Stoploss Hunt, Sign Zone, Market Construction, Reverse Sign)
• Multi-timeframe scanner masking as much as 150 symbols and eight timeframes concurrently
• Automated Entry/SL/TP ranges with Donchian Channel trailing cease
• 4-channel alert system (popup, sound, push notification, e mail)
• EA sign buffers enabling automated buying and selling techniques to devour Exterior Bar alerts by way of iCustom()
• Skilled chart themes (Darkish, Gentle, Customized) for prolonged buying and selling classes

Getting Assist

If in case you have questions or want help:

Able to Begin?

OutsideBarTradingSystem identifies the structural second when value vary expands past the prior bar’s extremes, signaling renewed volatility and directional dedication. Connect the indicator to your chart, begin with the Commonplace preset on XAUUSD H1, and observe how the vary enlargement aligns with the momentum strikes you’ll establish manually.

Glad buying and selling!

Ich Khiem Nguyen

OutsideBarTradingSystem 1.00 — Created 2026-02-24