Rule-Based Smash Day Reversals with Context and Validity Filters
Summary
The article turns Larry Williams’ Smash Day reversal pattern into objective rules for an automated trading system. A buy setup occurs when a bar closes below a configurable number of prior lows; a sell setup uses a close above prior highs. Outside bars are excluded, and each setup expires after a specified number of bars unless price breaks the setup bar’s opposite extreme. Entry can trigger at the level break or after a confirming bar close.
Optional filters align trades with Supertrend direction and restrict trading to selected weekdays. The system allows buy-only, sell-only, or both directions, with one position open at a time. Stops sit at the Smash Day bar’s far extreme, while targets use a fixed risk-to-reward ratio; position size can be manual or based on account balance and stop distance. The article describes an MQL5 Expert Advisor and its configurable inputs, but the provided text does not establish that the approach is profitable. Results will depend on market, timeframe, costs, and parameter choices, so the framework is best understood as a testable strategy specification.
Key ideas
- A Smash Day buy setup closes below prior lows, while a sell setup closes above prior highs, and outside bars are excluded.
- A setup expires after a configurable number of bars if price does not break its trigger level.
- Entries can use an intrabar level crossing or wait for a bar close beyond the level.
- Supertrend direction and weekday selection are optional context filters.
- Stops use the setup bar’s opposite extreme, and targets follow a fixed risk-to-reward ratio.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.