80 20 day trade

Checked October 2026

The 80-20 looks for a day that opened near its high and closed near its low, then buys the next day if price breaks that low and comes back. Connors and Raschke published it in Street Smarts in 1995. Backtoast ran it on futures. This version failed our test, losing 5.3% a year over 655 trades.

Backtoast

You pay $99 for two full tests of your own strategy, and a pass is an offer of 30% of the profit Backtoast makes trading it with its own money.

80 20 day trade

The setup day opens in the top 20% of its range and closes in the bottom 20%, which is the name. The next day, once price has traded a few ticks below that day's low, a buy stop goes at the low, so the trade fills only if price comes back up through it. The stop starts at the day's low, and the trade is closed by the end of the session. The short is the mirror.

The book doesn't say how to trail the stop, so the run trailed it under each new 15-minute low. It used the 9:30 to 4:00 New York session on all five markets.

Turtle soup is the other Street Smarts reversal here, fading a failed 20-day breakout, and Williams oops buys back through yesterday's low after a gap.

When it works

The 80-20 is a short-term reversal, so it makes its money in range-bound markets, where a day that sold off from open to close often turns around the next morning, and it loses when the selling keeps going. Day traders like it because it sets up often (about 11 trades a month across the five markets in our run) and it's flat by the close. Taking longs only in an uptrend and shorts only in a downtrend is the usual filter for a reversal setup like this, and a draft can test that before you spend a full test.

Origins

Connors and Raschke published it in Street Smarts in 1995, with examples on 15-minute charts. The book wasn't in hand, so the rule follows the versions quoted from it. The run traded E-mini S&P 500 and Nasdaq futures, crude oil, gold and 10-year notes from late 2021 to October 2026.

The run is Backtoast's, from 29 October 2026, after costs.