Book: The Gap and Go Trading System
Author: Not named; the supplied guide is branded TradingTips.com
Difficulty: Intermediate
The Big Idea
A gap identifies a change in price between sessions. It does not tell you whether that change will continue. This reading joins a candidate screen to two ways of waiting for more information: an opening-range breakout and a late-session candle assessment.
This workbook builds the skills needed to evaluate those ideas: distinguish quotes from trades, freeze a range before testing its breakout, measure a developing daily candle without borrowing its final close, and calculate risk from an assumed execution price.
Keep the original PDF beside you. Page references below count its cover as PDF page 1; the file has 10 pages and no printed page numbering. Its filename mentions day-tradingz, but the visible branding identifies TradingTips.com. A named author, edition, and publication date are not supplied. The workbook uses original examples and does not reproduce the guide’s charts.
Quick study guide
| Idea | Working definition | Mistake to avoid |
|---|---|---|
| Quote gap | 100 × (current ask / previous regular close − 1) | Calling a quote an execution, or mixing ask-based and open-based samples. |
| Candidate screen | Source: about 3% or more, premarket volume above 100,000, a catalyst; ideally average volume of at least 1 million | Replacing news verification with a large candle. The average-volume lookback is unspecified. |
| Morning observation | Our reading: freeze 09:30–10:00 New York high; observe a completed 5-minute close above it by 10:30 | Using the eventual first-hour high to authorize an earlier decision. |
| Late-session assessment | Measure body fraction, close location, and volume at a recorded timestamp | Using 16:00 data for a decision made at 15:40. |
| Initial stop reference | Source: one 14-day ATR from entry; our morning indicator uses the prior completed daily ATR | Treating ATR as maximum possible loss or the plotted reference as a stop order. |
| Long stop adjustment | Our operational rule: if either higher high or higher low fails, consider day low − $0.20; never lower an existing stop | Confusing a completed-day observation with an intraday instruction. |
| Evidence | Annotated examples illustrate a mechanism; a consecutive, timestamped sample evaluates it | Selecting only attractive winners or assigning gap types after seeing outcomes. |
Reading map and study plan
Use seven short sessions, or combine them at your own pace. Completion means you can explain and audit the method; it says nothing about expected profits.
| Session / PDF reading | Learning goal | Produce |
|---|---|---|
| 1 · pp. 2–4, introduction and gap types | Separate observable context from later interpretation | Module 1 classification notes |
| 2 · pp. 5–6, setup | Build a timestamped candidate screen | Module 2 screening calculations |
| 3 · p. 7, intraday entry | Resolve the timing conflict without future information | Module 3 bar-by-bar timeline |
| 4 · p. 8, entry before close | Quantify subjective candle language | Module 4 measurements |
| 5 · p. 9, swing exit | Calculate ATR risk and monotonic stop updates | Module 5 risk plan |
| 6 · p. 10, conclusion; revisit charts pp. 4, 7, 9 | Distinguish illustration from measured evidence | Module 6 research protocol and indicator replay |
| 7 · reread relevant pages | Apply the full process to unseen data | Four worksheets and capstone |
1. Describe the gap before labeling it
Read: PDF pp. 2–4. Goal: describe trend context using only what was visible at the time.
The reading distinguishes gaps associated with a new trend, an ongoing trend, and a trend’s possible exhaustion. These labels are useful questions about context. They become misleading if a trader first watches the outcome and then assigns the label that explains it.
Write an observation before a prediction: “price opened above a six-week range” is checkable. “This gap cannot fill because it is a breakaway” adds certainty the chart cannot provide. The source’s tendency statements and selected AAPL chart do not establish probabilities for a fresh candidate.
Original example: one gap, several possible stories
Fictional prices. Freeze the information set at the opening auction; do not peek at the next five days.
| Known at the open | Value | What can be concluded |
|---|---|---|
| Previous close / previous high | $40.00 / $41.50 | These are different reference prices. |
| Opening price | $41.60 | A 4% gap from the close; only about 0.24% above the prior high. |
| Recent context | Six weeks between $37 and $41.50 | A range escape is observable. |
| Future outcome | Hidden | Continuation or failure remains unknown. |
Remember: Define the gap’s denominator and the decision timestamp before assigning a trend story.
Practice 1
- Calculate the close-to-open gap in the example.
- Does a gap above the prior close guarantee a gap above the prior high?
- Why could “exhaustion” introduce hindsight?
- What information would let another reviewer reproduce your classification?
Check your answers — practice 1
- ($41.60 − $40) / $40 = 4%. The prior-high comparison uses $41.50 instead.
- No. An opening price can lie above the close but inside the previous day’s range.
- If the label requires observing a subsequent reversal, it was unavailable at the original decision time. Record a provisional context label instead.
- A timestamped chart, reference prices, a predefined lookback, and explicit classification criteria; allow “uncertain” when they conflict.
2. Separate a candidate from a tradable quote
Read: PDF pp. 5–6. Goal: audit the three candidate conditions without treating them as an entry.
The source uses the current premarket ask relative to the previous close, premarket share volume, and a news catalyst. It also prefers substantial average daily volume. These measure different things: repricing, participation, and an explanation for attention.
Record the bid, ask, last trade, quote time, and data source separately. A stale last trade cannot substitute for a current ask. High aggregate volume also does not guarantee a narrow spread at the moment an order arrives.
Original example: the same stock passes one measure and fails another
Fictional snapshot taken at 09:25 New York. Average daily volume here means the prior 20 completed regular sessions, our definition.
| Field | Observation / calculation | Decision |
|---|---|---|
| Previous close | $25.00 | Reference price |
| Bid / ask | $25.55 / $25.85 | Ask gap = 3.4%; bid gap = 2.2%. |
| Spread | $0.30 / $25.70 midpoint ≈ 1.17% | A meaningful cost obstacle despite the quote gap. |
| Premarket volume / average daily volume | 140,000 / 1,300,000 shares | Passes the source’s participation suggestions. |
| Catalyst | Timestamped company release located | Record the original release; do not infer whether it is good news. |
| Regular open | $25.65 | An opening-gap proxy is only 2.6%, so it fails our 3% indicator threshold. |
Remember: A premarket candidate and an opening-gap marker are different samples.
The prose uses “at least” 100,000 shares, while the setup checklist uses “greater than” 100,000.
Use strictly more than 100,000 and record the boundary choice. Define the premarket window and feed before sampling; do not silently change them.
The SEC’s extended-hours bulletin describes reduced liquidity and wider spreads. Those are reasons to record executable quotes rather than assume a displayed price was attainable.
Practice 2
- Calculate the example’s ask gap.
- Would exactly 100,000 premarket shares pass our worksheet convention?
- Why does the opening-gap indicator reject the candidate?
- What does an unverified headline change in the screen?
Check your answers — practice 2
- 100 × ($25.85 / $25 − 1) = 3.4%.
- No. Our explicit convention is strictly above 100,000; that resolves the reading’s inconsistent boundary wording.
- The actual opening proxy is 2.6%, below its default threshold. It does not use premarket ask data.
- The catalyst condition remains unverified. Mark it unknown; price action does not establish the headline’s authenticity or timing.
3. Freeze the opening range
Read: PDF p. 7. Goal: identify exactly when a breakout observation becomes available.
A completed range creates a fixed hurdle. If the hurdle keeps moving as a breakout develops, the test becomes circular. The source’s chart annotation refers to clearing the first 30 minutes, which supports a practical interpretation of its entry sentence.
One instruction refers to marking the first-hour high; the next calls for a 5-minute close above the first-30-minute high within that first hour.
Freeze the high from 09:30 up to 10:00, then inspect completed bars ending 10:05 through 10:30. This makes the event observable without knowing the eventual first-hour high.
A wick above the hurdle is not a close above it. A close exactly at the hurdle is also not above it. Waiting for the bar’s final close means you cannot assume an order filled at an earlier price inside that bar.
Original example: a wick is followed by a confirmed close
Fictional 5-minute observations. The frozen 30-minute high is $52.40. All times below identify bar closing times.
| Close time | High / close | Observation |
|---|---|---|
| 10:00 | Range finalized at $52.40 | No post-range breakout bar has completed. |
| 10:05 | $52.55 / $52.35 | Wick crosses; close fails. |
| 10:10 | $52.70 / $52.60 | First qualifying completed close. |
| 10:15 | $52.90 / $52.75 | A later confirmation, not a second first event. |
| 10:35 | $53.00 / $52.85 | Outside the first-hour eligibility window. |
Remember: The first observation arrives at 10:10, not when price first touches $52.40.
The source discusses morning entry in a section about swing trading. A morning trigger therefore does not by itself require a same-day exit. Holding period and exit rules must be written separately. Our indicator only marks the morning observation; it does not manage a position.
Practice 3
- Which example bar produces the first marker?
- Does a 10:00–10:05 bar close at 10:00 or 10:05?
- Why can the final first-hour high not authorize a 10:10 decision?
- What should happen if a required opening-range bar is missing?
Check your answers — practice 3
- The bar ending at 10:10 because its completed close is strictly above $52.40.
- At 10:05. Many charts label bars with their opening time, so audit the platform convention.
- That high can include activity occurring after 10:10. Using it at 10:10 would borrow future information.
- Flag the session as incomplete. Our indicator suppresses markers unless all six consecutive opening-range bars are present; it does not invent the missing prices.
4. Measure the late-session candle
Read: PDF p. 8. Goal: turn subjective candle judgments into a reproducible snapshot.
The source looks for a substantial body, elevated volume, and price near the favorable end of the day’s range during the final half-hour. Before the close, these are developing measurements. A decision at 15:45 cannot use a 16:00 close that does not exist yet.
For an original research protocol, take one snapshot at 15:45 on ordinary full sessions. Define a bullish body as (current price − open) / (high so far − low so far) ≥ 0.60, and favorable location as (current price − low so far) / range ≥ 0.80. A zero range is invalid. These thresholds are ours, not source rules.
For volume, compare cumulative regular-session volume at 15:45 with the mean full-session volume of the prior 20 completed sessions. Require a ratio strictly above 1.30 to reflect the reading’s “over 30%” condition. A same-clock volume comparison would be a separate experiment; it has a different denominator.
Original example: record what exists at 15:45
Fictional snapshot: open $60.00, high $64.00, low $59.50, current price $63.50.
| Measurement | Calculation | Interpretation |
|---|---|---|
| Bullish body fraction | ($63.50 − $60.00) / $4.50 = 77.8% | Above our 60% threshold. |
| Close-location proxy | ($63.50 − $59.50) / $4.50 = 88.9% | Above our 80% threshold; current price is not the final close. |
| Volume ratio | 1.40 million / 1.00 million = 1.40 | 40% above the prior full-session mean. |
| Final daily close | Unknown | Keep it hidden until the snapshot is recorded. |
Remember: A late-session screen is a timestamped estimate, not a completed daily candle.
Bearish research can mirror body direction and distance from the low, but requires a separately specified short-selling and borrow protocol. The source’s strongest numerical premarket example is ask-based and bullish; do not quietly assume all long-side screening details translate unchanged to shorts. Early-close sessions need their own clock protocol and are excluded from this example.
Practice 4
- Calculate the example’s range.
- Would a body fraction of 55% pass our definition?
- Why is same-clock volume not interchangeable with full-day average volume?
- If the final price later falls to $60.50, should you rewrite the 15:45 snapshot?
Check your answers — practice 4
- $64 − $59.50 = $4.50.
- No. The research threshold is at least 60%; it is an introduced measurement rule.
- They compare different exposure times. A ratio to typical volume by 15:45 can differ from a ratio to typical total daily volume.
- No. Preserve the snapshot and record the later outcome separately; revising it would erase an actual failure.
5. Keep stop calculations consistent
Read: PDF p. 9. Goal: distinguish a risk reference, a stop instruction, and an actual execution.
ATR measures recent price variation. True range is the largest of high minus low, absolute high minus previous close, and absolute low minus previous close. A 14-day ATR smooths daily true ranges; it is a distance, not a forecast or a loss guarantee.
The reading places the initial reference one daily ATR from entry. For morning study, use the prior completed daily ATR, because today’s final range is unknown. For a late-session study, explicitly choose prior completed ATR or a timestamped developing estimate. Never mix those versions in one dataset.
Original example: size from the execution assumption
Fictional long example: signal close $72.00, assumed later fill $72.25, frozen prior-day ATR $1.80, account $20,000, planned risk 0.5%. No live fill is claimed.
| Step | Calculation | Meaning |
|---|---|---|
| Budget | $20,000 × 0.005 = $100 | A planned loss budget before exceptional gaps. |
| Stop reference | $72.25 − $1.80 = $70.45 | Based on the assumed fill, not the earlier signal. |
| Shares ignoring costs | floor($100 / $1.80) = 55 | Planned price risk $99; notional exposure $3,973.75. |
| Assumed round-trip cost | $0.10 per share | Our hypothetical spread/slippage/fee allowance. |
| Shares with allowance | floor($100 / $1.90) = 52 | Planned price risk plus allowance $98.80. |
| Adverse overnight fill | $68.90 | Price loss alone: 52 × $3.35 = $174.20; the stop reference was not a guarantee. |
Remember: Calculate from the assumed or verified fill and keep gap losses outside any promise of fixed risk.
The source’s adjustment sentence also needs a logical choice. For our long-side worksheet, a failure means not both a higher high and a higher low: H ≤ previous H or L ≤ previous L. That differs from requiring both to fail. We choose the first reading and document it.
After the daily bar completes, compute a candidate long stop at its low minus $0.20. Set the next stop reference to the larger of the existing reference and that candidate. For a short worksheet, reverse the comparisons, use high plus $0.20, and take the smaller reference. Equality counts as failure. The no-loosening convention is our safeguard, rather than an additional quoted rule.
| Long daily review | Candidate | Next reference if current stop is $70.45 |
|---|---|---|
| Previous H/L = $74.00/$71.80; today = $73.90/$72.00 | High failed; $72.00 − $0.20 = $71.80 | $71.80, effective only after the completed-day review |
| Later day low falls to $70.00 and fails the test | $69.80 | $71.80; do not loosen the reference to $69.80 |
A candidate stop already above the current price is not a sensible new protective sell-stop instruction. Flag it for the predeclared execution protocol rather than manufacturing an earlier exit. These are worksheet calculations, not orders. The SEC’s stop-order bulletin explains why triggered market execution can differ from the stop price.
Practice 5
- What is the no-cost share count in the example?
- Why does the cost-aware count fall to 52?
- Does a higher low alone prevent an adjustment under our logic?
- Can a stop decided after today’s close be treated as active during today’s earlier low?
Check your answers — practice 5
- 55 shares: floor($100 / $1.80). This is planned exposure to a price distance, not a maximum-loss guarantee.
- The assumed total planned cost per share is $1.90, so floor($100 / $1.90) = 52.
- No. If the higher-high condition fails, the conjunction fails. An alternative “both fail” interpretation creates a different research rule.
- No. That would use later information to change earlier execution. Record when the revised instruction could actually become active.
6. Turn examples into a fair investigation
Read: PDF p. 10; revisit pp. 4, 7, and 9. Goal: write a test capable of finding the idea unhelpful.
The annotated charts demonstrate how selected patterns can be described. The supplied PDF does not provide a consecutive trade ledger, total candidate count, cost model, or reproducible performance statistics. Its optimistic conclusion is a proposal to investigate, not evidence of expected income.
The claim that an exhaustion-gap swing trade will be unprofitable is too categorical for a trading outcome: results depend on entry, exit, costs, and when the classification became available. Replace the label with a measurable pre-entry feature before testing it.
| Our experiment | Change one variable | Keep constant / record | Interpretation |
|---|---|---|---|
| Does waiting for a close matter? Hypothesis: close confirmation reduces immediate failures. | First completed close above frozen high versus first high touching it | Same premarket-qualified candidates, date range, 30-minute range and 10:30 deadline. Record first-event time, trigger rate, and return to range within 30 minutes of each event. | Fewer failures with far fewer triggers is a selection tradeoff. These observations do not establish executable returns. |
| Does late candle strength distinguish persistence? Hypothesis: stronger snapshots retain more of the move by next close. | Body threshold 0.40 / 0.60 / 0.80 | Same 15:45 snapshots, location ≥0.80, volume ratio >1.30, same universe. Record eligible count and next-close change divided by prior-day ATR. | A broad pattern across thresholds is more credible than one isolated peak; adverse excursions still matter. |
| Does the stop sentence change the sample? Hypothesis: “either fails” updates earlier than “both fail.” | Failure of either versus failure of both daily progress conditions | Same assumed fills, ATR convention, $0.20 buffer and no-loosening rule. Record update days, reference distances, ambiguous crossings, and cost-aware manual outcomes. | Different exits reveal interpretation sensitivity. They do not prove one was the creator’s intent. |
Choose a fixed universe and date interval before opening charts. Retain rejected candidates, missing-data sessions, and no-trigger days. Use an initial segment to refine definitions, lock them, and evaluate a later untouched segment. If you calculate manual returns, predeclare order timing, spreads, costs, gaps, and ambiguous-bar treatment; never choose the favorable intrabar sequence.
Practice 6
- Why is an annotated winner insufficient evidence?
- What is the denominator for trigger rate?
- What would repeated tuning on the evaluation segment do?
- Can our indicator determine an actual fill or return?
Check your answers — practice 6
- It lacks the full opportunity set, failures, selection procedure, and execution assumptions. It illustrates a possibility.
- All eligible candidates under the same predefined screening rules, including those with no trigger. Report missing data separately.
- It turns evaluation data into development data. A newly untouched segment would be needed for a fresh check.
- No. It records chart observations and reference levels only; execution and outcomes require a separate protocol.
Opening-range Pine indicator
Research question: when does a stock with a qualifying opening gap first produce a completed close above its first-30-minute high?
This is original Pine Script v6 for a narrow, long-only observation proxy. It uses indicator() and creates no orders. It is not a complete recreation of the source screen.
What This Indicator Shows
- Chart scope. Use standard 5-minute US stock bars with a 09:30 New York open. Other timeframes, non-stock instruments, and synthetic chart types are rejected.
- Gap proxy. The 09:30 bar’s open versus the prior regular-session daily close; default minimum 3%, adjustable. This replaces the source’s premarket ask and can select different days.
- Frozen range. All six consecutive bars opening 09:30 through 09:55 must be present. Freeze their high and low after the last bar completes.
- First marker. The first completed close strictly above the frozen high on bars ending 10:05 through 10:30; at most one per New York calendar day.
- Visual references. Blue is the signal close, orange is that close minus prior completed daily ATR(14), rounded down to the tick. They are not a fill or protective order.
- State and expiry. Later breakouts do not replace the first marker or references. Eligibility ends at 10:30; references remain visible during the assumed 09:30–16:00 session and reset next calendar day.
State changes and alerts require completed bars. The fixed range may appear after 10:00 during realtime updates; a forming breakout bar cannot produce a marker. Confirmed daily requests use a one-bar offset with lookahead enabled, following TradingView’s confirmed higher-timeframe pattern (paid link). No developing daily close or ATR is used. Feed corrections and changed settings can still change historical observations.
What This Indicator Does Not Show
It does not check premarket volume, average daily volume, bid/ask spread, news, trend context, flag patterns, short opportunities, late-session entries, stop adjustments, actual fills, or performance. Verify the source filters manually before labeling a marker a source-qualified candidate.
The New York clock is fixed and handles daylight saving through its timezone identifier. Early closes are not detected: the morning window is still 09:30–10:30, while the nominal display cutoff remains 16:00. Use ordinary full sessions for workbook comparisons. Missing opening bars suppress signals; halts or missing later bars can still affect observations. ATR may be unavailable early in the dataset, leaving the orange reference absent without suppressing the marker. An orange value at or below zero is not a usable stop instruction.
Validation status: This script has not been compiled in TradingView or run against historical data here. No performance results are claimed. Static review checks timing, state, higher-timeframe offsets, and indicator-only structure; it cannot establish compilation or chart behavior.
View Pine Script Indicator Code
//@version=6
indicator("CC Gap and Go - Opening Range Study", overlay=true)
// Original long-only study proxy. This does not screen news or premarket quotes.
float gapMin = input.float(3.0, "Minimum opening gap (%)", minval=0.0, step=0.1)
string tz = "America/New_York"
if not (timeframe.isminutes and timeframe.multiplier == 5) or syminfo.type != "stock" or not chart.is_standard
runtime.error("Use a standard 5-minute US stock chart with a 09:30 New York opening.")
string regularId = ticker.new(syminfo.prefix, syminfo.ticker, session.regular)
// Offset every daily expression: no developing daily values.
[priorClose, priorAtr] = request.security(regularId, "1D", [close[1], ta.atr(14)[1]], lookahead=barmerge.lookahead_on)
int yy = year(time, tz)
int mm = month(time, tz)
int dd = dayofmonth(time, tz)
int dayKey = yy * 10000 + mm * 100 + dd
int start = timestamp(tz, yy, mm, dd, 9, 30)
int rangeEnd = timestamp(tz, yy, mm, dd, 10, 0)
int windowEnd = timestamp(tz, yy, mm, dd, 10, 30)
int rthEnd = timestamp(tz, yy, mm, dd, 16, 0)
bool rth = time >= start and time < rthEnd
var float rangeHigh = na
var float rangeLow = na
var float gapPct = na
var float signalReference = na
var float stopReference = na
var int rangeBars = 0
var int nextExpected = na
var bool continuous = false
var bool fired = false
bool signal = false
if barstate.isconfirmed
if na(dayKey[1]) or dayKey != dayKey[1]
rangeHigh := na
rangeLow := na
gapPct := na
signalReference := na
stopReference := na
rangeBars := 0
nextExpected := na
continuous := false
fired := false
if time == start
continuous := true
nextExpected := start
gapPct := not na(priorClose) and priorClose > 0 ? 100 * (open / priorClose - 1) : na
if time >= start and time < rangeEnd
if not continuous or time != nextExpected
continuous := false
else
rangeHigh := na(rangeHigh) ? high : math.max(rangeHigh, high)
rangeLow := na(rangeLow) ? low : math.min(rangeLow, low)
rangeBars += 1
nextExpected := time + 5 * 60 * 1000
bool ready = continuous and rangeBars == 6
bool inWindow = time >= rangeEnd and time_close <= windowEnd
if ready and inWindow and not fired and not na(gapPct) and gapPct >= gapMin and close > rangeHigh
signal := true
fired := true
signalReference := close
stopReference := not na(priorAtr) ? math.floor((close - priorAtr) / syminfo.mintick) * syminfo.mintick : na
bool frozen = continuous and rangeBars == 6 and time >= rangeEnd
plot(rth and frozen ? rangeHigh : na, "Frozen first-30-minute high", color=color.teal, style=plot.style_linebr)
plot(rth and frozen ? rangeLow : na, "Frozen first-30-minute low", color=color.gray, style=plot.style_linebr)
plot(rth ? signalReference : na, "Signal close reference - not a fill", color=color.blue, style=plot.style_linebr)
plot(rth ? stopReference : na, "Prior-day ATR visual reference - not an order", color=color.orange, style=plot.style_linebr)
plot(gapPct, "Opening gap (%) - proxy", display=display.data_window)
plotshape(signal, title="First confirmed proxy breakout", style=shape.triangleup, location=location.belowbar, color=color.teal, size=size.small, text="Study")
alertcondition(signal, "Confirmed opening-range study marker", "Gap and Go study proxy: completed 5-minute close above first-30-minute high. Verify source filters manually. Not an execution signal or fill.")
Replay checklist
- In TradingView, compile the script first and resolve any errors before using markers.
- Choose a full US session, load sufficient prior daily history, and verify the previous close and ATR against regular-session daily data.
- Advance one bar at a time. Check all six range bars, the strict close comparison, and the 10:30 cutoff. Test exactly-at-high closes and missing-opening-bar sessions.
- Check that only the first marker survives and next-day state resets. Compare historical reload behavior with bar-by-bar observations.
- Create an alert using the named condition with once-per-bar-close delivery. An alert is a study observation, not a broker instruction.
- Annotate premarket/news eligibility separately; keep proxy-only days distinct from fully screened candidates.
Four reusable worksheets
Copy these fields into your journal. Keep timestamps and unknown values visible; do not turn blanks into invented confirmations.
A. Candidate observation
| Field | Record |
|---|---|
| Identity | Symbol, date, feed, timezone, ordinary / early-close session |
| Quote snapshot | Timestamp; prior regular close; bid; ask; last trade; quote age |
| Participation | Premarket window and volume; prior 20-session average daily volume |
| Catalyst | Original release URL, release time, what was known before the screen |
| Context | Range/trend description using past data; provisional label; uncertainty |
| Decision | Ask gap; spread; pass / fail / unknown with reason; opening-gap proxy separately |
B. Entry and risk plan
| Field | Record |
|---|---|
| Method | Morning / late session; exact rule version and decision time |
| Event | Frozen range and first qualifying close, or timestamped late-session measurements |
| Execution assumption | Order type, earliest eligible submission, assumed or verified fill, costs |
| Risk reference | ATR value and information cutoff; stop; positive distance; share calculation |
| Management | Holding period; adjustment logic; no-loosening rule; next effective time |
| Outcome record | Actual or hypothetical label; gaps; partial fills; ambiguous sequence; no-trigger status |
C. Research comparison
| Field | Record |
|---|---|
| Question | Single hypothesis; baseline; changed variable; thresholds |
| Sample | Fixed universe and dates; development / untouched evaluation split |
| Eligibility | All candidates; rejects and reasons; missing-data counts |
| Measurements | Trigger count / eligible count; event timestamps; predefined horizon and normalization |
| Execution if studied | Fill convention, commissions, spread/slippage, overnight treatment, ambiguity rule |
| Interpretation | What would contradict the hypothesis? Stability across periods; limitations |
D. Weekly review
| Field | Record |
|---|---|
| Coverage | Sessions reviewed; all candidates retained? Missing data? |
| Timing audit | Any use of final highs, final closes, or final volume before available? |
| Rule audit | Premarket ask versus open proxy; volume boundary; stop-logic version |
| Reproducibility | Independent reviewer agrees? List disagreements and unknowns |
| Process errors | Missed events, duplicate counts, revised snapshots, unrealistic fills |
| Next action | One locked change for future development; keep evaluation data untouched |
Capstone: audit ten consecutive sessions
Pick a fixed list of US stocks and ten consecutive ordinary full sessions before reviewing outcomes. This is a process audit, not a statistically conclusive performance study. Use archived premarket evidence where available; otherwise label that eligibility unknown and retain the indicator-only observations separately.
- Complete worksheet A for every candidate and retain a count of all stocks checked.
- For each eligible or explicitly proxy-only session, record the opening range, whether a morning observation occurred, and the separate 15:45 snapshot.
- Use worksheet B for at least two fictional execution plans or historical plans with documented assumptions, including one adverse-gap scenario. Do not imply execution occurred when it did not.
- Compare one variable from module 6 using worksheet C. Report counts and missing data before discussing outcomes.
- Complete worksheet D, then write 150–250 words explaining what the evidence supports and what remains untested.
| Completion criterion | Points | Evidence required |
|---|---|---|
| Source understanding | 0–2 | Accurate reading map and explicit source / original-definition distinctions |
| Time integrity | 0–2 | Ranges and snapshots frozen before outcomes; no future daily values |
| Calculations | 0–2 | Correct denominators, candle fractions, ATR distances, and cost-aware sizing |
| Sample integrity | 0–2 | Candidates, rejects, missing data, and no-trigger sessions all retained |
| Interpretation | 0–2 | No invented fills or performance; uncertainty and one useful next experiment |
Aim for at least 8/10 with no future-information or fabricated-execution errors. Revise any zero-scoring area before expanding the sample. This rubric grades understanding and documentation, not trading readiness.
Final Takeaway
The reading proposes combining unusual opening repricing with participation, a catalyst, and confirmation. Its most useful lesson is to separate a candidate from a timed decision. The open questions concern definitions and evidence: do the confirmation rules add useful information when applied consistently to every eligible case? Start with a timestamped observation study before making performance claims.
Risk Disclosure: This material is for educational and research purposes only and is not financial or investment advice. Trading can result in substantial losses. Hypothetical examples and chart indicators do not establish profitability or reproduce live execution. Commissions, spreads, slippage, liquidity, gaps, halts, order behavior, borrowing costs, and market changes can materially affect outcomes. Stop prices do not guarantee execution prices or limit losses to a planned amount.
This is an independent educational companion to the supplied guide and is not affiliated with, sponsored by, endorsed by, or authorized by its creator or TradingTips.com.