Down Day Trading Strategy

What is Down Day?

Defined by J. Welles Wilder, Jr. in 1978 in his book “New Concepts in Technical Trading Systems” for the RSI. Records days which have been “down”, i.e., the close price has been lower than the day before.

Down Day Indicator

The Down Day is a Momentum Oscillator indicator, defined in 1978. This indicator analyses the market price and calculates down days of the market. The indicator can analyse the scenarios and help traders pick the right entry and exit time in the market.

How To Calculated Down Day Indicator

Formula:- Down Day = max(close_prev – close, 0)

Why Use Down Day

The indicator calculates down days and showcases market trends for bearish or bullish scenarios. Traders can effectively use this indicator to predict if the market will witness a bullish or bearish scenario.

How to Use Down Day Trading Strategy

Bullish Scenario:- Since the indicator only calculates down days and returns 0 for others, thus if the indicator returns 0 value for a few days, that means there is no loss. In other words a bullish scenario.

Bearish Scenario:– If the indicator returns any value for a few days, that means continuous losses are occurring hence a bearish scenario.

Building Down Day Trading Strategy in Mudrex


BUY:- Down Day(2 days) crosses down Down Day(5 days)

SELL:- Down Day(2 days) crosses up Down Day(5 days)


Creating the strategy on Mudrex:- 

We will use 2 Down Day compare blocks—one for selling and one for buying.

For buying, we will use the following settings:-

Down Day Trading Strategy

For selling, we will use the following settings:-

Down Day Trading Strategy

Final Strategy:-

Down Day Trading Strategy


Running backtest on Binance Futures: BTC/USDT with tick interval of 6H yielded an overall profit of 365.41%



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