In terms of using this strategy to trade intraday I see no reason why it should not work. There is no reason why what you have suggested should not make money long term. The only problem I can see is in a long term sideways movement it could take a while for a decent trend to come along before you get paid off. As I suggest on my strategy page I like to see some other price formation in place before I make the trade. Like double bottom, bouncing off support etc. The problem with these is they are very hard to code into a screener so I always check the chart before placing the trade. I have never gone short with this strategy purely because I have never seen a good short opportunity in the 6 months or so that I have been trading it. Plus the overall market (FTSE 350) has been in an uptrend since then so you would expect to see more buying opportunities.
Using the logic of seeing an additional price pattern using the chart you have provided this would see long positions open at 4,8 & 10. 4 - previous double bottom, 8 - support, 10 - Support
On the short side the only potential one would be 7 but this is a bit subjective. There was quite a lot of resistance around 7 so this would be why it was a potential.
Unfortunately for me because I work full time I have no chance to trade this intraday and to be honest I have no desire to do so. I'm stuck in front of a computer screen for 8 hours a day now (Usually longer) which is exactly what I am trying to get away from.
I suspect what you are trying to do is create an automated trading system which is great. I would love to do it myself. I suspect that using the method you have suggested would generate a profit in the long run as you will be capturing most of the trend, but who can say for sure. The markets do what they like when they like and there would be no reason trading this strategy could also make you bankrupt.
What I have written here should not be deemed as advice or a recommendation of any kind. Just so we're clear please read my disclaimer
If you do trade this I would be very interested to know how you get on, so please keep us informed.
May the markets be with you!
The Spread betting beginner