Dynamic RTH Gap [Pro+] (The Engineer)

Elevate your trading expertise with the Dynamic RTH Gap [Pro+], specifically designed for day traders and intraday analysts. Built to serve functionality, it enables traders to dissect and leverage Regular Trading Hour gaps with unparalleled precision and customization.

Dynamic RTH Gap° [Pro+]

Concept Introduction & Indicator Features

Elevate your trading expertise with the Dynamic RTH Gap [Pro+], specifically designed for day traders and intraday analysts. Built to serve functionality, it enables traders to dissect and leverage Regular Trading Hour gaps with unparalleled precision and customization. This tool is built based on the methods and experience of TheEngineer who has refined these concepts over Time, creating a stronger framework for intraday analysis.

The difference between the price at market close and the open price at market open defines the RTH gap. These Times vary across different markets and countries, for example for US markets, the gap is defined between 16:15 and 9:30 of the following day.

In futures contracts, traders can use Electronic Trading Hours (ETH), or Regular Trading Hours (RTH). ETH includes the overnight session and pre-market, where majority of market participants are inactive.

When the new day RTH Opens, the Inner Circle Trader teaches how influential the gap created from the previous day's close and the next day's open is to futures contract analysis. Using RTH gap midpoints and projections can aid day traders in interpreting price action with higher context, contributing to higher probability ideas.

Indicator Features:

  • Selective Day Analysis: Optimize your trading strategy and templates by focusing on specific days of the week. This tool provides checkboxes for Monday through Friday, allowing for granular analysis on the days that matter most to your trading regimen.

    Tuesday Gap extended throughout the week serves as a compass and, in this case, supports price:

  • RTH Gap Visualization: Engage with the markets through a dynamic visual display of RTH gaps. Benefit from our 'Show RTH Gap' option with an 'Auto Color' feature that automatically adjusts to reflect the bullish or bearish significance of the gap, enhancing your chart analysis with an intuitive color scheme.

  • Historical CE: This feature is a dedicated component of the Dynamic RTH Gap [Pro+] that integrates the concept of Consequent Encroachment (CE) from the ICT Inner Circle Trader methodology. CE is noted as the 50% of the RTH Gap. Historical CEs may act as key market pivots and or display imbalances away from such level.

  • Gap Grades Flexibility: Choose from various styles such as 'Dashed', 'Solid', or 'Dotted' to categorize gap grades. An additional option to 'Show Quarters' divides the Regular Trading Hours Gap into quarters for more detailed analysis.

  • Proactive Gap Projections: Activate 'Show Projections' to display standard deviations of the Regular Trading Hours Gap with an 'Auto' or manual setting. This is complimented with a a visual selection for projection style, providing clearer lines per TradingView layouts.

  • Projection Gap Threshold:

    The 'Proj. Gap Threshold' slider is an innovative feature within the Dynamic RTH Gap [Pro+], designed to empower traders’ control for gap projections. This feature allows one to display larger or smaller gaps to their back tested values.

    Smaller RTH Gaps are less insightful, notice this small gap's projections being hit in the first few candles after the gap is established:

  • Data Table Integration: With the 'Show Data Table' toggle, access a neatly organized table that compiles and presents relevant gap data. Enhance your data analysis with 'Color Coding', distinguishing data points for quick identification and comparison. Lastly, monitor the % fill of the RTH gaps, up to five gaps in the past.

  • Automated Gap and Deviation Alerts: This tool is equipped with real-time alerts for immediate notification when gaps fill or when specific deviation levels are reached. Tailor your alerts to your strategy, and stay informed with minimizing chart time. With this feature, traders can maintain a competitive edge on multiple instruments by setting alerts, providing additional trading opportunities.

Historical and CE Settings

Choose the Number of Historical Gaps Displayed

Choose to display the Historical Consequent Encroachment (CE) of the RTH Gaps. Consequent Encroachment is an ICT Term also known as a Midpoint of the Gap.

Analysts can choose the number of Gaps to display on their charts. For those that want to backtest this tool, increase the value to see all of the applicable gaps for your applicable TradingView plan. Learn more about TradingView’s historical bars and plan limitations.

Gap Alerts

With this feature, you can set an alert to notify you when a RTH Gap is rebalanced. Toggle the setting to enable alerts and follow the same procedures to enable TradingView Alerts on an Indicator.

Day of the Week, Auto Coloring, and Grading

Day of the Week Filtering

Customize the indicator to activate on specific days of the week. You can select individual days or select all days for the entire week. This setting is crucial for traders who have day-specific strategies or observe varying market behaviors on different days.

RTH Gap Color Settings

Analysts are given the option to toggle on and off the RTH Gap. This setting could be useful for those only wanting to study gap projections.

Analysts can easily view bullish and bearish gaps with Automatic Coloring. Bearish RTH Gaps are defined as when the previous day close is higher than the next day open. Bullish RTH Gaps are defined as when the previous day close is lower than the next day open.

Analyst Insights: Before the session starts, identify where we are in relation to the previous RTH close, in order to anticipate where we will open and the type of gap we get during the market open (bullish vs bearish gap)

Choose to style your Automatic RTH Gaps with your own coloring, or use the defaulted colors for Red (Bearish), and Blue(Bullish).

Analyst Insights:

As we know, smart money will look to position themselves at the best price they can get. That means, in deep discount when they are looking to buy, and in deep premium when they are looking to sell.

Let’s say, we are expecting an expansion higher the upcoming trading day. When the market opens at 09:30 we will be looking to position ourselves below the 09:30 open price, because that is discounted relative to the opening price. That way we are aligned with smart money.

Gap Grades

Easily toggle through stylistic options for Gap Grades: Dashed, Dotted, or Solid

Determine if the indicator displays Quarters or not. Quarters are insightful for traders to enable when gaps are larger, indicating possible areas for redelivery and rebalance. Analysts can use quarterly levels for scalping opportunities, take profit objectives, and draws on liquidity.

RTH Gap Projections

Show Projections

Auto/Both
Analysts have the ability to select Both for projections above and below the RTH Gap, or choose to select Auto. Choosing the Auto feature, the indicator will plot projections above then price has closed above the gap, and plot projections below the gap when price closes below the gap.

With the Both feature enabled, you can see that when price opens and the RTH Gap begins to print, the projections are shown immediately above and below, regardless of the closing price.

With the Auto feature enabled, you can see that when price is below the RTH Gap, projections show automatically below. When price closes back above the RTH Gap, projections begin painting above the gap.

Projection Gap Threshold

Some analysts may want to study smaller or larger gaps depending on their own trading models and styles. Some smaller gaps may be unfruitful for projections and traders may still want to see the RTH gap but not be bothered by its smaller and less meaningful projections. This feature was created to give the flexibility to analysts.

Data Table Insights

Once gaps are redelivered to their previous days close, price will price a checkmark to indicate the gap has been filled.

The photo above displays NQ on RTH Session Settings utilizing the 5M chart with default Automatic Coloring. You can see the data table print the current gap size in points as well as the previous 5 gap values.

The Color Coding feature of the Dynamic RTH Gap Pro+ allows analysts to easily discern bullish or bearish gaps by color. Keep the default settings of Red for Bearish and Blue for Bullish or feel free to change your own colors.

Traders can more easily identify when the market might be creating a Balanced Price Range, where two previous RTH Gaps overlap. This can assist traders in knowing the effects of rebalancing and when CE is breached from Balanced Price Ranges. Pay keen attention to the overlapping of Bullish and Bearish RTH Gaps.

Analyst Insights: The table shows you what percentage of the gaps from the last few days remain open and the size of these gaps. This helps you anticipate certain scenarios, as Michael mentioned in his latest videos, when we have a gap greater than 40 handles, there is a high probability of rebalancing at least 50%.

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