Larry Williams Smash Day Patterns for Reversal Entries

Summary

This document describes two price-action patterns attributed to Larry Williams and presents them as possible reversal signals. The first pattern identifies a bar that moves beyond a recent low or high and then closes beyond the preceding bar’s corresponding extreme. The second looks for a candle that closes in the opposite direction from its body color, with the close near one end of the bar’s range. The indicator marks long and short signals separately for each pattern.

The suggested entry is at the signal bar’s high for a long trade or low for a short trade. The author says they monitor the indicator for possible endings to corrections in growth stocks, but explicitly says they have not backtested the system. The document offers no performance evidence, exit rules, risk controls, market selection criteria, or implementation details beyond signal conditions and entry placement. Its favorable characterization of the book’s claims is not substantiated by results here, so the patterns should be treated as hypotheses requiring independent testing.

Key ideas

• The indicator encodes two variations of price-bar patterns intended to identify potential reversals.
• The first pattern requires price to exceed a recent extreme and close beyond the previous bar’s corresponding level.
• The second pattern uses the candle’s direction and the close’s location within its range.
• The suggested entry is at the signal bar’s high for longs or low for shorts.
• The author reports no backtest, and the document supplies no exits or risk-management rules.

Tags

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