Smash Day Pattern Theory

Introduction

The Smash Day Pattern Trading System identifies entry points based on the relationship between the current closing price and the previous day's high or low. This system is suitable for both daily and weekly charts, providing traders with reliable entry and exit points.

How It Works

Setup

A Smash Day buy signal is generated when the closing price is above the previous day's high. A Smash Day sell signal is generated when the closing price is below the previous day's low.

Entry

If a higher high occurs on the next trading day after a Smash Day, it is considered a strong buy signal. However, if no higher high follows, and instead the previous day's low is reached, a sell signal is generated.

Entry Signal

Stop Buy LONG signal at the day's high / Stop Loss SHORT signal at the day's low

Permanent Filters

• 50 % + X must tend in one direction
• Intermarket spread DJIA: Weekly basis
• 20-day average weekly basis
• Triple bar trend-following filter weekly basis
• Volume explosion filter weekly basis

Volatility Filter

0.5 % - 2.5 % daily basis

Stops

• Initial stop for LONG position is the current candle's low.
• Initial stop for SHORT position is the current candle's high.
• Trailing stop: After each profit candle, the stop is moved by the amount of the book profit.

Time Stop

5 candles if no stop is reached.

Position Size

1 % of the account volume: Point distance of the initial stop = number of shares

Loss Brake

After 2 consecutive losses, the system is blocked for the applied timeframe. The same block applies to the traded base value.

System Highlights

• Advanced AI algorithms designed to spot market trends.
• Real-time analysis to make quick and informed decisions.
• Customizable options for individual trading preferences.

Optimizing Your Strategies

Discover techniques to maximize your trading success with our detailed guide on using the Smash Day Pattern System effectively.

Download Full Guide

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Conclusion

The Smash Day Pattern Trading System is more than a set of rules; it is a comprehensive trading framework that integrates technical analysis, psychology, and rigorous risk management. It equips traders with the knowledge and tools necessary to navigate the complexities of the market, maximizing opportunities while controlling risk. By applying this system, traders of all experience levels can enhance their market presence, making informed and profitable trading decisions.