What Is True Low

Defined by J. Welles Wilder, Jr. in 1978 in his book “New Concepts in Technical Trading Systems”, the ATR records the “true low”, which is the minimum of today’s low and yesterday’s close.

True Low Indicator

The True Low is a momentum indicator and is part of the True Range, which is calculated using True Low and True High values.

How To Calculate True Low Indicator

Here’s how True Low is calculated

True low = min(low, close_prev)

True Low value is the lower value of today’s low or the previous close,

Why Use True Low Indicator

The True Low is part of the True Range, which is used when calculating directional market movement, volatility and other analysis techniques. 

How To Use True Low Indicator

Bullish Scenario:- Being a momentum indicator, if the value of the stock increases, the value of the True Low indicator increases showing a bullish scenario.

Bearish Scenario:- Similarly, if True Low decreases, it indicates a downward trend meaning a bearish scenario.

Building True Low Trading Strategy in Mudrex

Strategy:- 

BUY:- True low(14 days) crosses up true low(30 days)

SELL:- True low(14 days) crosses below the true low(30 days)

TIME FRAME:- 6Hrs

Creating on Mudrex:- 

We will use 2 True low comparing blocks- one for selling and one for buying.

For buying, we will use the following settings:-

For selling, we will use the following settings:-

Final Strategy:-

Testing:- 

Running on Binance Futures: BTC/USDT with tick interval of 6H yielded an overall profit of 168.93%

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