I think it depends when you trade it. Sometimes it does, sometimes it has challenges. The market ebb's and flow's and I personally do not believe that you have always this or always that.
So your IB's will work sometimes, sometimes not and sometimes they will go through larger DD periods.
I think the key with IB's in my opinion is to line up several other price action confirmations. Price Patterns, Trendlines, Support & Resistance as well as Fib's and even volume if that floats your boat.
I believe IB's can be dangerous from a mechanical perspective. If you think about an IB trade it is really just a consolidation of price and a breakout. You will find that 2011 was a great year for breakouts due to volatility which also increases your stops and affects r:r. A TON OF PEOPLE fade inside bars because they know that is what the 'big guys' do to screw up the IB traders or breakout traders.
The key of all of this to me is to use common sense and if you see a breakout of the IB, wait for it to retrace, bounce of resistance/support and consider the trade there and also verify momentum, intensity, even some fundamentals if EUR is getting killed like it is now, then IB shorts are probably a better bet than IB long's etc...
COMMON TRADING SENSE + IB's = could be profitable.
The following 2 users say Thank You to bluemele for this post:
I know this thread has been dead for more than a year already but I just want to say a big thanks to Jeff and the rest who had created and contributed to this thread. I am a beginner and not a very active trader (still trying to learn). And because I've made more losses than profits to date, I began to lose interest in trading but that was until I found this thread recently. It is a simple yet fairly high prob system. I've been doing sim trades for the last few weeks and the results have been promising so far. I've found that the IB trades (compared to the other 2 setups) have been more reliable in generating profitable trades overall.
Many thanks once again to Jeff and all - you've contributed to my learning experience.