The Wilder Reaction Trend System

Wells Wilder's Reaction Trend system is wonderfully imaginative. It is programmed to use intraday data. We takes trades in the direction of a breakout at preset breakout levels. However, if the market reverts to a congested formation, the system switches to a reaction mode. In this mode, there are Buy days, Sell days and Out days that are determined from the highest high while long or from the lowest low while short in the breakout mode. These days are automatically identified as B, S or O as shown in the chart below. This system is best used when the ADX is below 25 because it will take many small winning trades in a choppy market but is around for the big trend trade when it happens.