STUDY #5 | Chapter 18: Confirmation of Direction and Intra-Day Reversal Filter

This strategy study takes another step toward optimization. In this study, we are combining two of the higher probability entry scenarios to further strengthen this approach. We are going to look at trading only after an intra-day reversal and only when the daily directional indicator and the intra-day momentum method direction agree.

There are no stop-losses used in this study.

Rules for the STUDY

If an intra-day reversal occurred during the previous trading session these rules apply:

1. If ML1 is reached, a Long position is taken at ML1 or better.
2. If MS1 is reached, a Short position is taken at MS1 or better.
3. Exit all positions at the close.

If an intra-day reversal did not occur in the previous trading session, the following rules apply:

1. DDI = Long and ML1 Level is reached. Take a Long Position at ML1 or better.
2. DDI = Short and MS1 Level is reached. Take a Short Position at MS1 or better.
3. Exit all positions at the Close.