Automating Larry Williams’ Previous-Day Range Breakout Strategy

Summary

The article translates Larry Williams’ volatility breakout idea into an automated trading system. At the start of each day, the system measures the previous session’s high-low range, then places potential entry levels above and below today’s open using configurable fractions of that range. It waits for price to reach a level rather than entering in anticipation. Stop distance is also tied to the prior range, while the profit target is set as a multiple of the trade’s risk. The design permits only one position at a time and includes direction and position sizing choices.

The document focuses on implementing the rules in an MQL5 Expert Advisor and describes the resulting system as suitable for testing and adaptation. It refers to attached tester settings and parameters, but the supplied text does not state specific performance results. The strategy’s premise is that an unusually large expansion can precede continued directional movement; that premise needs independent backtesting and forward testing across instruments and market conditions. Range multipliers, reward settings, execution assumptions and risk controls affect outcomes.

Key ideas

• The strategy derives daily breakout levels from the current open and a fraction of the previous day’s range.
• It enters only after price reaches a breakout level and discards unused levels when the day ends.
• Stop distance scales with yesterday’s range, and the profit target is based on a chosen risk-reward multiple.
• The system restricts trading to one open position and supports manual or automatic position sizing.
• The article describes implementation and testing materials but gives no specific performance results in the supplied text.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.