Smash Days in forex

[tomorton]

Larry Williams developed the idea of Smash Days. It’s a day which smashes through yesterday’s range and reverses a whole bullish or bearish series of recent days. The set-up is simple and objective, the trade is easy to understand.

The objective is to join a reaction move away from a new swing high or low.

The strategy has been optimised over the years and the rules I will follow are -

• Today’s Close must be above yesterday’s Close
• Today’s Close must be above preceding 5 days’ Highs
• Set a sell order at today’s Low, valid for tomorrow only
• Set a stop-loss at today’s High
• Exit at the first profitable Close after 5 sessions or more

As of last night there are two viable Smash Day trades available for Monday from the 28 leading forex pairs - short GBP/NZD or long NZD/CHF. You will see immediately that these two charts are inverse versions of each other so not much to gain by trading both. My preference is to go for GBP/NZD, as GBP is a more heavily traded currency than CHF and this pair has a higher historic volatility. If the sell order at yesterday’s Low is triggered on Monday, I will look to exit at the first profitable Close from Friday 04/04 onwards. If the sell order is not triggered on Monday I will cancel it.

Have a great weekend.

 

[Lightning McQueen]

Thought I'd join in on this thread with you tomo, mt4 spread bet demo account, following the rules you've set out other than setting a take profit.

 

[tomorton]

Thought I'd join in on this thread with you tomo, mt4 spread bet demo account, following the rules you've set out other than setting a take profit.

View attachment 340943

Your chart inadvertently demonstrates the differences between charts from different providers/brokers. Your chart shows a Close which is lower than mine and does not quite top the preceding bars' Highs. It's still the highest Close for 10 bars so the market might be said to be ripe for a pull-back. This might turn out to be just a detail as early price action today suggests the low of 28/03 will not be breached today anyway.

 

[Lightning McQueen]

Yes, you're right of course, at the time I thought it close enough to the previous highs to ignore. But an interesting observation nonetheless regarding different broker/provider prices/charts and the sharing of strategies.

Agreed, it doesn't look like a possibility of a breach today. That would be because I got involved!! always does the opposite! Looking on the bright side it would appear the bar is shaping up to be a smash day. That being the case my intention would be to adjust the order to todays bar on GBP/NZD and not look elsewhere, as we are at the top of a channel with the possibility of a retracement to a support line/MA area, and where I placed my take profit. See my weekly chart

 

[tomorton]

Mondays Close -
GBP/NZD short was not triggered today so this is cancelled.

Plenty of Smash Day set-ups printed today - almost all the AUD and NZD pairs, plus USD/CAD. Can't take all the trades, and as AUD and NZD mostly follow each other, a trade on both would double the risk on what would basically be the same TA.

My preference here is for a slightly more varied programme for tomorrow - a buy order on AUD/USD, a sell on GBP/AUD, and a sell on USD/CAD. All valid for Tuesday only.

 

[tomorton]

Tuesday's Close -
GBP/AUD short triggered. This position will run until it is either stopped out at today's High or it makes a profitable Close on 08/04 or later.

The other two orders were not triggered today so they are cancelled.

No new Smash Day set-ups today. No less than 10 of hte 28 leading pairs printed Inside Days, so obviously, not a fertile day for our set-up.

 

[Lightning McQueen]

My readjusted GBP/NZD order choice didn't trigger.

GBP/NZD performed in a similar manner to your GBP/AUD trade pick, but didn't have quite the oomph behind it.

Good luck with GBP/AUD, looking good so far!

 

[Lightning McQueen]

My Smash Day pick today is EURUSD

 

[tomorton]

Wednesday's Close -
GBP/AUD short stopped out. I guess that's what happens when you take a position across major news events.......

Trump seems to have thrown a spanner in everyone's plans. Right now I see only two Smash Day set-ups, EUR/JPY and USD/JPY, so I'm setting a buy order on USD/JPY.

We'll see what tomorrow brings......

 

[Lightning McQueen]

Today seems to once again be opposites day and will adjust the orders at the close.

As for your previous point on differences between charts from different providers/brokers. I'm just not seeing your USDJPY setup, not on a daily chart at least, which timeframe are you setting up from? hourly? charts are city index web trader and cmc mt4

 

[Lightning McQueen]

Thinking on this I can only assume it a time zone issue, our price feeds are in different time zones, producing different daily bars to each other.

Thinking on this further, it could be argued that people would have differing results running a smash day strategy on forex around the world on any given day?

 

[tomorton]

For people with less experience who might be tracking this thread, it's worth being aware of how your forex chart provider deals with the time period between the end of the US business day and the start of the next calendar date's trading.

I am in the UK and use charts produced here. Most of our D1 charts close at 2200hrs UK time. So today's daily Close price will be the price at 2200hrs.

It's worth watching what your chart provider does in this period. You might find that daily Close prices change from what they look like at bed-time tonight to a different price when you get up tomorrow.

 

[Lightning McQueen]

Yes agreed, 22.00 is when my chart shows a daily bar close, as can be seen on my post from yesterday at 10:21 PM, hasn't changed.

Its a shame I binned out tickmill mt4, uk provider but feed was from somewhere in the middle of the Indian ocean or some such, I don't recall. But could have been a good comparison. Found the posting https://www.trade2win.com/threads/t...arts-monday-glowing-star.242232/#post-3257615

At least we can thank our lucky stars neither of our trade choices triggered, mine did came close!

 

[RolloTape2025]

Hi guys, I am probably misreading the rules, because the first rule seems redundant to me, the second rule seems to imply the first. What am I missing?

 

[Lightning McQueen]

Hi Rollo, You're right of course. I just read it as making the rules clear, easy to follow in a methodical logical manner.

 

[Lightning McQueen]

Jumping the gun early.

Yesterdays EURUSD smash trade setup is cancelled and orders moved to todays bar.

Today my smash trade selection is a sell on EURGBP

Also a smash trade buy on USDJPY

 

[tomorton]

Hi guys, I am probably misreading the rules, because the first rule seems redundant to me, the second rule seems to imply the first. What am I missing?

Rule 2 significantly adds to the basic requirement of Rule 1. Now you're ready for a reversal of a swing leg not just after 1 isolated Close but a Close that was so far isolated it beat not just the last close but the last 5 highs as well. So this isn;t just an isolated bt pof volatility, it's a reversal after a significant upleg, lasting at least 5 days. Increases the probability of bearish follow-through.

 

[tomorton]

Sitting on my hands tonight. I wish Trump would sit on his.