Smash Day Trading Strategy

A modified version of Larry William’s Smash Day trading strategy. Working on Daily timeframe (D1).

Concept

In an uptrend, a sell-stop pending order is placed just bellow yesterday’s low. The premise is, if the uptrend is already happened for a long enough time, breaking yesterday’s low often become a sign of exhausted trend. Therefore, a trend reversal is likely to come not long afterwards. Likewise but the opposite in a downtrend.

Rules for Entry

All of the calculations are executed at today’s candle open. The calculations ignore today’s candle. Only looking from yesterday’s candle and backward.

• Long
  1. Yesterday’s candle close must be lower than previous candle low.
  2. Yesterday’s low must be the lowest price in the last X days. X is a variable to be optimized.
  3. Place a buy-stop order at the yesterday’s high. This pending order must be executed in the next 48 hours. If not executed, delete it.
• Short
  1. Yesterday’s candle close must be higher than previous candle high.
  2. Yesterday’s high must be the highest price in the last X days. X is a variable to be optimized.
  3. Place a sell-stop order at the yesterday’s low. This pending order must be executed in the next 48 hours. If not executed, delete it.

If there is a trade still running, any subsequent signal to the same direction is ignored.

Filter

X number of days (lookback) in the point 2 above become the entry filter. The premise is, after X number of days, any break of previous day’s structure (high or low) to the opposite direction of the trend, become the sign of a trend exhaustion, and likely to be followed by a trend reversal. Thus, we catch the next trend quite early.

Input Parameters

• Magic : EA’s magic number
• Lots : Lot opened on each trade.
• Timeframe : Timeframe of execution. Default is D1
• lookback : number of days to look back. (Filter)
• atrPeriod : ATR Period to calculate ATR-based stop loss distance.
• atrMult : –> SL distance = ATR * atrMult.
• slMode : SLMODE_ATR means the stop loss is calculated based on ATR. SLMODE_FIXED means the stop loss is a fixed value.
• slPoint : SL distance in points. Used when SLMODE_FIXED is selected.
• tpFactor : –> TP distance = SL distance * tpFactor. Used in either ATR and fixed SL.
• pendingDistance : buffer distance in points away from the high/low or close price whichever farthest from the close price. Used to avoid false confirmation.
• ExpirationHours : pending order expiration in hours.

Test & Results

EURUSD Benchmark

EURUSD D1, 2013-01-01 until 2023-04-29, 10000 USD initial balance, 0.1 lot/trade. Risking 2350 points and 0.75 TP factor. The set file used in the test is included.

• Net profit: 7749.72 USD. Which means 7749.72 pips of profit if using 0.1 lot/trade.
• Profit trades: 73.68%
• Total trades: 114
• Profit factor: 2.12
• Sharpe ratio: 1.82
• Max. consecutive losses: 2x
• Max. consecutive wins: 8x

Porfolio Mode

Portfolio consists of EURUSD,EURJPY,AUDUSD,AUDJPY, and GBPJPY. Test was done from 2015-01-01 until 2023-01-01, 10000 USD initial balance, pip calculation mode. The set file for each pair is not included.

• Net profit: 26966.22 pips
• Profit trades: 64.61%
• Total trades: 356
• Profit factor: 1.83
• Max. consecutive losses: 4x
• Max. consecutive wins: 12x