Trading System Labs, Vol. 2: Countertrend Trading

While the Futures System Lab (Active Trader, September 2006) uses the HLR indicator to detect trends, this system uses it as a countertrend indicator to trade short-term dips. This system goes long when the HLR indicator (based on 10-day highs and lows) drops below a certain threshold and exits after holding the position for 10 days.