Larry Williams' smash down days
This is a coded version of Larry Williams’ smash down days as described in his book “Long-Term Secrets to Short-Term Trading”.
I put in the same code the two different smash down days entries. When an histogram bar is showed enter long (or short) at the high (or low) of the price bar corresponding to the histogram bar.
Since I don’t do short term trading I haven’t backtested the system but the author promises wonders. I personally keep an eye on this indicator to asses the end of a correction for growth stocks.
Blue skies!!
//smash day type 1
//long
c10=low<lowest[2](low[1])
c11=close<low[1]
if c10 and c11 then
sdlong=1
else
sdlong=0
endif
//short
c12=high>highest[2](high[1])
c13=close>high[1]
if c12 and c13 then
sdshort=-1
else
sdshort=0
endif
//smash down type 2
//long
c20=close>close[1]
c21=close<open
c22=(close-low)<=((0.25*range))
if c20 and c21 and c22 then
sd2long=0.5
else
sd2long=0
endif
//short
c23=close<close[1]
c24=close>open
c25=(high-close)<=((0.25*range))
if c23 and c24 and c25 then
sd2short=-0.5
else
sd2short=0
endif
return sdlong coloured (0,210,0) style(histogram) as "smash down 1 Long",sdshort coloured (0,210,0) style(histogram) as "smash down 1 Short",sd2long coloured (210,0,0) style(histogram) as "smash down2 Long",sd2short coloured (210,0,0) style(histogram) as "smash down2 Short",0
Comments
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Paul, he uses the best day of the week to trade (he figured out the best day to enter, exit and how much holding the stock) but I agree with you that combining the two indicators you can make great things. If I was a short-term trader and I had more abilities to backtest I would try an entry based on the daily smash down days with a 3 bar trailing stop on an intraday graph. G
Juanj, is all in Larry Williams' book “Long-Term Secrets to Short-Term Trading”. Just to give you a quick and dirty overview (I will cover just the long entry since the short is just the opposite) you need to put a buy stop 1 tick above the bar preceding the one with the long entry signal. The author doesn't say how long to keep this buy for. Gabriele
thnx for posting. Combine it with Williams’ 3 bar trailing stop to create strategy!