Automating Larry Williams Smash Day Reversal Signals
Summary
The article turns Larry Williams’ smash day reversal idea into objective rules for an Expert Advisor. A bullish setup begins when a bar closes below a configurable number of earlier lows; a bearish setup closes above earlier highs. Outside bars are excluded, and the EA waits for price to cross the smash bar’s opposite extreme before entering, treating that failure to continue as evidence that breakout traders may be trapped. Entry can be immediate or delayed until a bar closes beyond the level.
Risk controls place the stop at the other end of the smash bar, set profit targets through a configurable risk-to-reward ratio, and allow either fixed lots or balance-based sizing. Buy and sell patterns can be enabled separately, with one position active at a time. The article frames the EA as a research tool for testing pattern definitions and settings across markets and timeframes. The supplied excerpt does not show backtest results or establish profitability, and it emphasizes that context still matters; the rules are an operational interpretation rather than proof that reversals will follow.
Key ideas
- A smash day closes beyond recent highs or lows, creating a potential breakout trap.
- A reversal entry waits for price to cross the smash bar’s opposite extreme.
- The implementation excludes outside bars and makes the lookback and entry confirmation configurable.
- Stops use the smash bar’s far extreme, while targets follow a chosen risk-to-reward ratio.
- The Expert Advisor is intended to support systematic testing, not to guarantee profitable trades.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.