Anyone up for a challenge?

[Batman]

I came across an interesting trading theory today, from this video:

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His theory in a nutshell is that if a large gap up in price and volume takes place in one candlestick, then the length of the gapping candlestick will probably offer an area of support in the event of a pullback. This is a reversal strategy, which he describes as buying the dip. The dip in this case is a return to the area where a gap-up took place. (The theory should work on any level, but he used the 2Day-2Minute time frame in the video).

The big question is whether and how this simple trading strategy can be transformed into a TOS study, ideally with buy signals so that the scanner can pick up on them. Anyone up for the challenge?

 

[rad14733]

@Batman I've actually employed an alternate methodology... When an asset shows a rapid rise, such as HOOD has, I'm more apt to watch for a reversal and ride it down to midway between the high and where the rise originated from... But, then again, I have more of a scalping mindset... If the price returns to the original level I'd be selling any remaining positions that weren't sold at midpoint or preparing to ride the next upward movement... Another option would be to average down during the pullback in anticipation of a new upward rebound... Different strokes for different folks... It all comes down to knowing an asset intimately rather than merely watching the entire market and jumping in and out of assets blindly based on hunches or boilerplate patterns...