Gap Up & Gap Down Scanner for ThinkorSwim

Likos

Member
2019 Donor
Prior the the "orb scanner" I think this is great but how about a gap potential or open window of opportunity. I've used the previous day closing gap but rather difficult to use since what's done is done leads to a 50/50 chance trade for opening new wedge gap
 

BenTen

Administrative
Staff member
Staff
VIP
ThinkorSwim already provide users with their own Gap up and Gap down scanners.

isXgMHL.png
 

markos

Well-known member
VIP
@Likos the rules have changed on how Gaps work according to two former portfolio managers for William O'Neill and company. In this case, Google really IS your friend. Please search for "take the fear out of buying big gaps" that was published March 11, 2013 by Gil Morales and Dr. Chris Kacher.
They wrote more than one article but that is the only one that I have printed out. Sorry I don't have the name of the publication.

Also, see a website called virtueofselfishinvesting.com. Those two gentlemen might have some information on that site, as they are the ones that run it. On there they call them "BGU's". It will take some research but it's the only place I know of that has firm rules on purchasing Gap Ups.

After you have reviewed that, you will have better odds of winning on a trade using the scanner that @BenTen pointed to above.
Good investing, Markos
 

markos

Well-known member
VIP
After you do your Pareto Analysis, good idea to put your links somewhere so that your helpers can send people to it. Apparently reading & watching "How to drive the scanner" is difficult to do. btw, excellent job with the video!
 

wilmanv

Member
VIP
Thanks, Sir

Mr @BenTen, question Bookmarks, is the same as favorites? how to save my favorites post or scripts

If I want just scan for gaps up or down for the etf components: SPY, QQQ, DIA is possible? thanks
 

markos

Well-known member
VIP
@wilmanv Please contact support and set up a time for your Free Tour. Have 10 questions written down to ask so that your particular questions get answered.

Also, please spend some time reading in our Tutorial Section. You will find many answers to your questions above.

Your question may have already been asked, please use the Search Box above to check that out.

Thanks, Markos
 
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BenTen

Administrative
Staff member
Staff
VIP
@wilmanv Bookmarking is like saving a comment or post.

Whatever ToS provides in their default scanner is what you can use. You can also create your own set of watchlist.
 

perkybets

New member
This is a pretty common setup but I'm not sure which TOS scan to use to find this potential set up through the morning.

I'm looking at a 5-minute chart. The image attached shows more detail. Price eventually doesn't make a new high on the next candle. Once that happens we are looking for consolidation candles of 3 or more without the price pulling back percentage X. This should alert me of stocks with this pattern.

Here are the rules.
1. Stock must have gapped up or down at least 1% from previous days close.
2. It doesn't take into account pre or post-market activity.
3. Many can consider this a bull or bear flag type of setup.
4. We are however looking for tight consolidation without too much pullback.

HQhwpQ5.png


I'd appreciate anyone's input on this.

Thanks,
Perky
 

heramone

New member
Hello All,

I know that there many good software programmers here in the house. Can you or all of you (as a team) make something like this youtube video? I have been researching for a while to get the trend but unfortunately, I couldn't find anywhere. I think you guys can do it for us.

edited by moderator. media content blocked. Contained commercial content prohibited by Forum's terms & guidelines

please watch this video and see if you/we can make a similar reversal for the room. It will be worth it. Thanks
 
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K1CK455

New member
Hi Guys,

I need help with building a gap up scanner and as well the opening range breakout scanner. I want those gap up stocks to go through opening range breakout as well(only stocks that appeared in gap up) to enter a long position. I have used the gap up scanner and opening range scanner combined from our site but nothing shows up in the scanner. Can i do it like that. Need help guys.
 

Mlentsch0

New member
VIP
So I have this code that says need one defined plot when I upload it I was hoping that someone could help with this code and make it work

Code:
# choose to scan up down gaps
# 1 = Only up gaps
# 2 = Only down gaps
# 3 = BOTH up and down gaps

input GapDirection = 3;

#set min max gap size you would like.
input minimumPercentFromPriorClose = 1.0;
input minimumDollarsFromPriorClose = 1.0;
input MaximumPercentFromPriorClose = 100.0;
input MaximumDollarsFromPriorClose = 100.0;

# makes sure there is a gap between the currentprice and the prior High/low, not just from the prior close

input OutsideYesterdaysRange = no;

#Looks for only gaps that are gapping up over red candle or gapping downsideGapThreeMethods under green candle, in addition the other criteria, Some people believe this adds "shock value" and forces people to cover their positions, adding momentum in the direction of the gap.

input GapAboveRedOrBeLowGreen = no;

# choose to only look for gapsthat havent filled yet interday
input OnlyGapsThatHaventFilled = no;

# if set to yes then scan will only consider a gap to be filled id the current days price action has touch previous days close.
input GapIsOnlyFilledAtClose = yes;

#Only change these if you are dealing with special marketor know what your doing
input MarketOpenTime = 0930;
input MarketCloseTime = 1600;
 
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He said to know your prior day high... it can be institutional supply level... AGAIN, he repeats, would we short if the ZM share price surged to the possible short level ON CATALYTIC NEWS such as a big contract for services??? N.O. NO! Never take a position if there is catalyst news that can change FEAR and GREED balance. Likewise, would we buy long at the possible long zone shown if there was catalystic bad news??? Again, NO? So you must have your news open to real time news for every stock you are stalking. He said this is why we trade in the first hour or last hour intraday. There is seldom news released after the open in the first hour or last hour. It may have news pre-hours which changes our plans for opening a position when market opens, but if no prehours news, then not likely to have any in the first few minutes of market open.

Summary: Know the yesterday's high and lows, know the prehours price actions to determine where is share price "coming from" as the market opens and the price surges in a direction. Maker sure your are always watching for news which may have been release after close of yesterday or in prehours. It may cause you to abort trading plans.


 
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dreamscape25

New member
Pivot lines, not ATR?

He starts discussing actual trades in this video at about 11:15 mark. He repeated says he waits for trades to come to him. He may have only one trade for a given day, but that's fine. Some traders have only 2 trades in a week. Don't work to make a trade every day. Sometimes the set up occurs in the first hour, but sometimes in the last hour. He does not recommend sitting and waiting in between those hours. Wasted time, and hard on your butt! The set up has to occur WITH NO CATALYST GOING ON. No conf call, no news, no product news, no regulatory news, etc. This lack of catalyst is what allows for extreme surges to come back to the mean. If there is a sudden move during the middle of trading day, he suspects there is likely a catalyst known. You have to take that into account in subsequent surges at end of day or next start of day.... be careful. He even says YOU SHOULDN'T EVEN BE TRADING IN THE MIDDLE OF DAY ON THESE SURGES. He admits that a trading strategy success may stop working. He's had success with a strategy that stopped working and he subsequently lost a lot of money when he tried to continue to use the same past successful strategy... But he thinks this first hour and last hour FEAR and GREED based strategy has been more successful. He repeats that a trader new to this strategy SHOULD NOT BE TRADING IN THE MIDDLE OF DAY. He says "ALWAYS, ALWAYS, ALWAYS ASK YOURSELF: Where it the stock coming from and how fast??" The example with CVX, at about 28:00 mark, he showed a drop from $78 to $74 in about 30 minutes in the middle of day. His experience allowed him to take a rebound trade from the $74 to profit about $2/sh. But he does not recommend such mid-day trading for traders new to this surging price and reversion action because many times some catalysts is released and that can screw the price reversion action.
You nailed it! When I watched the video I had the same thought process as you. I think you covered on how to take a trade the next part is to find a scanner and voila! Easier said than done but great job man. We have awesome programmers here and I hope they will figure this out.
 
Here is another video on Youtube.com sounds like Dan... Truetrader. After watching the above video... you can see the rational behind Dan's trades. He does not show the Pivot Points levels but he does mark the levels at which he initiates trade positions. You can surmise those levels are the zones he has predetermined (Pivot Points or whatever). He is quite patient at waiting for the levels to be hit. He is definitely juggling a few different stocks simultaneously. Pretty nimble guy.

Dan wrote: "Pro tip: On breakouts above key levels, put a BUY STOP a hair above the breakout level to get the instant execution." This is quite a valuable tip. I've never use a BUY STOP. So instead of putting in a BUY LIMIT to catch a falling knife, Dan determines where the support is likely to be and then bounce. Instead of buying a limit order which may get burned by going much lower, he is willing to put a BUY STOP order a little above the price action that is occurring at the support zone. Then if the share price moves higher off that support zone, he will catch the wave higher, knowing more confidently the move has started in the direction he was waiting for. So, he's not trying to get the very best price at the risk of also being burned. He's more willing to not get the best price, but be more assured the direction has now turned in his favor. the BUY STOP will likely have to be "at the market" because a limit order with a BUY STOP may not get executed if share price is popping.

Also Dan takes "half" of his profits pretty quickly to more assure he can exit rest at break even if direction goes against him too quickly. He takes the other "half" of profits soon after. He does NOT hold shares for later in the day. He gets in, then gets out.

Uh, Dan is buying very large dollar amounts. His example of MRK was a $400,000 dollar position alone. His gain waas 87cents for a $4200 profits. Do the math and that is $4200 / $0.87 = 4827 shares... at about $85/sh starting price... over $400,000 position.




 
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In another video here,: Pro Tip from Dan: "Check the most range the stock has had in one single day in the last 24 months. Use that as a guide." In his trade example a stock dropped from open about $96.50 to $91... He went long and it went lower briefly. But he implied from his Pro Tip that he felt confident it would not go much lower because of the past range of stock action.

His trading shows the prehours price action of each stock, but does not reveal what the previous day price action was. But he must be using the previous day high and low as trading zones. He also then considers if today's open surges in a particular direction in relation to previous close, high, low and prehours price action.

Check out his trade on HAS at about the 10:30 mark. He went long on HAS then noticed huge volume to downside and concerned about it. You can see the deep red candlestick with sudden display of big volume. He closed position for fear a conference call was starting and too much unknown about what will be a catalyst.

At about the 15.30 mark, there is great display of his chart on LMNX. It is a daily, one minute chart and shows the previous day close action, the prehours tanking before the market opens, then the surging share price opens well above the previous day's close and prehours end... The shares peaked, then dropped all the way back close to the previous days close, then turned higher again.

There are a few trades he closed because the price action was lackadaisical. He expect directional move soon after he initiates a position. If there is sideways action for too long, he closes position. DISH was example at about 15:45 mark.

 
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We definitely need a scanner for the TrueTrader method. The SCAN finds stocks that open with gap up or down from previous day close. That should be easy. Maybe set a parameter of 5% or greater gap. Then on one monitor you have maybe a dozen small displays of stocks that show up on the SCAN so you can immediately watch if there is a continued surge in direction of the gap (ie gap down, goes further down; gap up, goes further up). I don't think there is a way to SCAN for price action during the preopen hours compared to previous trading day hours. Someone correct me if I am wrong.

Look for news or catalyst information on your prospective stocks. Eliminate those with news.

Set you upper and lower zones at the previous days intraday high and low. Use Pivot Points for determining other possible turning points intraday.

Any other ideas???
 
At this video at the 2:40 mark you have to watch his trade on BA. He does a great job explaining the trading decisions. In particularly he discusses how he was willing to add to his long position at a lower price based on a support level (he does not reveal how it is determined). It would have lowered his cost basis to allow him to hold longer on a pull back. But since he did not get the lower price, he felt obligated to sell and take profits compared to the possibility of a pull back causing a profitable trade turning into a losing trade. It was interesting to learn his rational.

Check out his trade on CHEF at the 5:40 mark. He displays THREE days of trading charts which allows us to see what the previous trading day highs were, the prehours price action, the regular market open prices. CHEF was a rare trade in which he held the position overnight! It was a swing trade for him that he was willing to hold for days or weeks.

Pretty interesting. Again, these are factors for the SCAN to find.

 
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