Before getting into the strategy just wanna tell you that amibroker supports two in built functions gapup() and gapdown() to identify gap up and gap down openings.
GapUp() – this inbuilt function Returns ‘1’ or ‘true’ on the day a security opens gap up. Rest of the days it returns Zero.
GapDown() – this inbuilt function Returns ‘1’ or ‘true’ on the day a security opens gap down. Rest of the days it returns Zero.
Based on this two functions one can easily create a Simple Gapup and Gapdown Strategies.
Strategy is very simple. when the market open with gap up and at the same time ,it crossed the previous day high then it should be considered as strong buy. When the market open with gap down and while opening if it crosses yesterday low then it should be considered as strong short.
1)Target % parameter Control is given to the user. so user can set the target as required. Default value is 1%
2)Stop loss logic in the AFL code is not added however you can set the stop loss nearly 0.3% in the bactesting settings as shown below. 0.3% if Static stoploss is the minimum risk
3)Tested the strategy with different stocks and its success ratio in between 50 to 60 %
4)On an average you will get the signal 2-4 times in month .
5)Exploration is also added to scan the stocks which meet above requirement
Preferred Timeframe : 5min charts.
One can experiment with high beta stock.The beauty of the system is stop loss is only 0.3 % which is very less .