Video: Look For THIS When You're Looking For The Next "BIG RUNNER"
Creator: Momentum.
Original Video: Watch the original video
Difficulty: Intermediate
The Big Idea
A stock that moved yesterday is a candidate to watch, not a reason to buy today. A useful day-two plan asks whether fresh participation is confirming continuation, whether a definable pullback provides an entry, and whether the chart offers enough space before the next obstacle.
If you remember one thing: yesterday supplies the watchlist; today’s behavior must supply the setup.
Three Different Jobs: Selection, Trigger, Management
The source contrasts a quiet, difficult premarket with a stronger opportunity after the open. Trading fewer stocks coincided with the trader’s best day of that week. That personal recap illustrates why activity and opportunity should not be confused. It does not establish that two stocks, a particular ticker, or a specific session will reliably produce a profitable day.
Organize the process in three stages. Selection identifies stocks with a recent move and room on the larger chart. The trigger identifies current strength followed by an acceptable pullback. Management determines what happens if the move stalls, approaches resistance, or accelerates. A strong selection cannot compensate for chasing a poor entry, and a clean entry cannot remove execution risk.
What Range Means in This Lesson
Here, range means available room toward relevant prices on the daily chart, rather than simply the distance between today’s high and low. Prior highs can provide reference areas for potential objectives. Mark the nearest obstacle first; farther highs are not promises that price will reach them in sequence.
The source connects greater room with greater incentive for traders to participate. Treat that as an economic hypothesis. A large empty area on the chart does not reveal how many buyers will arrive or how much size they will use. Risk budgets, liquidity, volatility, and competing information all affect participation.
| Observation | Useful interpretation | What still needs confirmation |
|---|---|---|
| A strong prior-day advance | The stock deserves a place on the watchlist | Today’s demand and an executable setup |
| Price pushes through yesterday’s high | A visible reference has been exceeded | Whether the break holds rather than immediately fails |
| A retest closes back above the level | The pullback has shown a bullish response | Target room, fill price, and invalidation |
Why the First Pullback Matters
Buying the breakout and buying a later retest are different decisions. A breakout entry risks paying for a moment of maximum excitement. A retest can offer a closer invalidation reference, but may never occur or may fail. Neither method automatically has the better expectancy.
The recap includes a sequence in which one candle establishes a reference, another breaks above it, and a later candle pulls back before continuation. That chronological order matters. You cannot label the initial break as a successful retest after the rally has already happened.
A brief dip beneath the reference followed by recovery can strengthen the pullback argument. It cannot prove that identifiable institutions deliberately collected stops. Describe what the chart shows: a level was traded through, and price recovered. Keep the explanation of who traded and why separate from that observable event.
Worked Example: Room Shrinks When the Entry Slips
Consider an invented stock with yesterday’s high at $3.20 and a nearby daily obstacle at $3.60. Today it breaks higher, retests the area, and gives a planned entry at $3.25 with invalidation at $3.10. Price risk is $0.15 per share. The obstacle offers $0.35 of room, about 2.33R, before costs.
A $75 price-risk budget would permit 500 shares under those assumptions. If the actual fill is $3.35, the unchanged stop creates $0.25 risk per share and the same obstacle offers only $0.25 reward: 1R. The planned 500 shares now expose $125 before costs. The watchlist selection remains unchanged, but the trade no longer has the original economics.
Do this calculation before deciding whether to use a market order, a capped limit, or no order. An unfilled limit is a missed opportunity, not an imaginary winning trade. Do not compare only the favorable limit fills with every market-order attempt.
Volume, Depth, and Halts Are Different Risks
The source avoids one heavily traded but stagnant stock and waits for clearer movement elsewhere. A large volume total does not guarantee smooth directional movement. Similarly, visible order-book size can change or disappear; the recap is an observation about that session, not a durable liquidity forecast.
Fast small-cap moves also introduce halts and reopening gaps. A stop entered before a halt cannot ensure the same execution price after trading resumes. Partial profits can reduce exposure, but a remaining position still carries risk. Calling a runner risk free ignores gaps, fees, slippage, and the possibility that the stop fills away from its trigger.
Reentries Need Fresh Evidence
The recap contains later pullbacks, hesitations, and another trade after direction becomes clearer. Record each as its own decision. A profitable first trade does not establish that every revisit to the same stock is valid, and the desire to recover a missed portion of the move is not a trigger.
A practical stopping rule can be qualitative but explicit: repeated failed breaks, loss of a reclaimed area, or a session in which your entries consistently stall. Write that rule before reviewing the day’s eventual high. The later outcome should not rewrite what information was available at the time.
Pine Script Indicator
View Pine Script Indicator Code
//@version=6
// Guide: https://candlechasers.com/day-two-momentum-range-confirmation/
// Original educational indicator, not an exact reconstruction or a trading system.
indicator("CC Day Two Break Retest", overlay=true, max_labels_count=100)
if not timeframe.isintraday
runtime.error("Use an intraday chart below the daily timeframe.")
minPriorGain = input.float(5.0, "Minimum prior daily gain %", step=0.5)
life = input.int(12, "Retest window in chart bars", minval=1)
tolATR = input.float(0.25, "Retest tolerance ATR", minval=0, step=0.05)
needVolume = input.bool(false, "Require breakout volume expansion")
volFactor = input.float(1.5, "Breakout volume / prior 3-bar maximum", minval=0.1)
regular = ticker.new(syminfo.prefix, syminfo.ticker, session.regular)
[priorHigh, priorGain] = request.security(regular, "D", [high[1], (close[1] / close[2] - 1) * 100], lookahead=barmerge.lookahead_on)
atr = ta.atr(14)
vwapValue = ta.vwap(hlc3)
priorVol = ta.highest(volume, 3)[1]
volOK = not needVolume or (not na(volume) and priorVol > 0 and volume >= priorVol * volFactor)
breakout = barstate.isconfirmed and priorGain >= minPriorGain and close > priorHigh and close[1] <= priorHigh and volOK and not na(atr)
var float level = na
var float tolerance = na
var int armed = na
var int signals = 0
bool reclaim = false
if barstate.isconfirmed
if timeframe.change("D")
level := na
armed := na
if not na(armed)
if bar_index - armed > life or close < level - tolerance
level := na
armed := na
else if bar_index > armed and low <= level + tolerance and close > level and close > open
reclaim := true
signals += 1
level := na
armed := na
if na(armed) and breakout and not reclaim
level := priorHigh
tolerance := atr * tolATR
armed := bar_index
plot(priorHigh, "Confirmed prior regular-session high", color=color.blue, style=plot.style_stepline)
plot(vwapValue, "Chart-session VWAP (context only)", color=color.purple)
plot(level, "Waiting retest", color=color.orange, style=plot.style_linebr, linewidth=2)
plotshape(breakout, title="Qualified breakout", style=shape.circle, location=location.abovebar, color=color.orange, size=size.tiny)
plotshape(reclaim, title="Later retest confirmation", style=shape.triangleup, location=location.belowbar, color=color.lime)
alertcondition(reclaim, "Day-two retest confirmed", "CC: confirmed retest on {{ticker}} {{interval}}. Visual setup only.")
var table status = table.new(position.top_right, 1, 3, bgcolor=color.new(color.black, 15))
if barstate.islast
table.cell(status, 0, 0, "Prior gain: " + str.tostring(priorGain, "#.##") + "%", text_color=color.white)
table.cell(status, 0, 1, na(armed) ? "No retest armed" : "Waiting for retest", text_color=color.white)
table.cell(status, 0, 2, "Confirmed setups: " + str.tostring(signals), text_color=color.white)
What This Indicator Shows
The indicator plots yesterday’s completed regular-session high and chart-session VWAP. It watches for a close above the high after the prior daily close gained at least 5%, then freezes the broken level while waiting for a later bullish retest. The setup expires after twelve chart bars, resets on a new chart day, or invalidates when price closes beyond its quarter-ATR tolerance below the level.
The prior-gain threshold, tolerance, expiry, and optional volume ratio are our definitions. They do not reproduce the source’s scanner or its discretionary wick zones. Volume expansion is optional and off by default. VWAP is displayed as context; it does not veto signals.
What This Indicator Does Not Show
This is a one-chart selection aid. It does not scan every stock, map all historical overhead levels, identify news, model halts, or execute entries and exits. The blue line uses regular-session daily data; VWAP and intraday triggers use the chart’s selected session. A setup during extended hours therefore depends on having those bars available. It does not imply a filled order or a profitable day-two pattern.
Chart Setup, Alerts, and Validation
Paste the complete script into Pine Editor, save it, and add it to a standard-candlestick chart. Follow the timeframe and session instructions above. Configure alerts for the named condition using Once Per Bar Close. The code gates setup markers on completed chart bars; developing reference plots can still move while the current bar forms.
Allow enough history for every lookback and any higher-timeframe calculation. Inspect the visible references and status table before concluding that a quiet chart is broken. A restrictive filter can correctly produce no signals. Changing the chart session, timeframe, inputs, or available data can change the observations; create new alerts after such changes.
Validation status: code, state handling, confirmation timing, and HTML preservation were reviewed statically. The indicator has not been compiled or chart-tested in TradingView here, and alerts and browser copying have not been tested live. No orders, fills, backtest results, or performance claims are produced.
Practice and Research
- Separate selection from timing: replay a fixed watchlist and record every qualifying break, including stocks that fail. Do not build the list from the eventual biggest runners.
- Compare participation: hold all price rules fixed and compare the optional volume filter off versus on. Record how many candidates disappear and why.
- Audit available room: mark the nearest daily obstacle before advancing the chart. Compare outcomes by initial room in R, including unfilled and skipped opportunities.
Record spread, signal-close price, intended stop, actual fill if traded, and any halt. A chart-only result cannot establish the economics of execution on a fast small-cap stock.
Check Your Understanding
What turns yesterday’s winner into today’s setup? Fresh confirmation and an acceptable entry; the prior move alone does not.
Does a remaining runner become risk free after a partial exit? No. Execution and gap risk remain.
Replay assignment: freeze a prior-day high, identify the first qualified break and later retest, and explain every skip before seeing the next bars.
Final Takeaway
Use the prior move to select candidates, current price action to confirm interest, and actual entry economics to decide whether the remaining room is worth the risk.
Risk Disclosure
This material is for education and research, not personalized financial advice or a recommendation to trade any security, contract, or account program. Trading can result in substantial losses. Leveraged products can produce losses beyond the amount initially committed, and short selling can involve unlimited loss. Options carry exercise, assignment, liquidity, and expiration risks. Stops and displayed prices do not guarantee execution; gaps, spreads, slippage, fees, funding, halts, and platform interruptions can materially change outcomes. Hypothetical examples, historical charts, indicators, and creator-reported results do not establish future performance. Understand the instrument, account rules, and total exposure, practice before committing capital, and use only risk capital you can afford to lose.
CandleChasers provides independent educational analysis and is not affiliated with, endorsed by, or sponsored by the source creator, platforms, or firms discussed.