Reprinted from Technical Analysis of Stocks & Commodities magazine. © 2010 Technical Analysis Inc., (800) 832-4642, http://www.traders.

com
product review

MarketGauge
Opening Range Success Formula
O
DataView LLC Requirements: No special graphics pening Range Success Formula,
70 Sparta Ave, Suite 203 required, but broadband is always MarketGauge’s new product,
Sparta, NJ 07871 helpful is a trading course and mastery
Phone: 888 241-3060 Price: $1,297 with a 30-day money- program, with multiple strategies for
Internet: www.openingrange.com, back guarantee or Blueprint and one daytrading equities and commodities.
www.marketgauge.com month of Opening Range Mastery; Opening Range Success Formula is
Email: (tech support) info@ $147 a month, which includes based on pattern-based trading strategies.
marketgauge.com; (sales) geoff@ HotScans ($75 a month separately). There are two parts to Opening Range
marketgauge.com Success Formula: the OR Blueprint and
Product: Trading course by Dennis D. Peterson OR Mastery. Let’s take a look at each.

OR blueprint
This is where you learn what Market-
Gauge calls its opening range trading
strategies. There are nine modules about
six hours in length. The Introduction
module is basically a synopsis of the
trading backgrounds of MarketGauge
cofounders Keith Schneider and Geoff
Bysshe. The second module, Basic
Opening Range Theory, gives you the
overall approach. The next six modules
give you specific trading pattern setups,
such as momentum swing trade with
three-day pivots (Figure 1), gapping
bulls and bears, and reversal trade. The
ninth module is the conclusion.
One of the charts in the theory mod-
ule provides some interesting statistics.
In general, the first 30 minutes of each
Figure 1: typical course module. View nine modules to understand the background and setups for day establishes the high or low of the
MarketGauge’s opening range trading strategy. After selecting a particular module, click on specific topics in
the table of contents to the left. The modules are all narrated with both graphics and text. Controls at the bottom day 35% of the time, and in periods
let you pause the presentation as needed. of expanded volatility, this percentage
tends to rise. Just prior to attending a Las
Vegas conference, Bysshe demonstrated
this with a brief period, showing that the
high and low were established 68% of
the time, as annotated on the chart with
up and down arrows (Figure 2).
The OR Blueprint tab has two sections:
The Course and Pre-set HotScans. From
the Course titles, you might conclude
there are six setups or events to learn.
You’ll find there are actually 13 when
you choose the Pre-set HotScans. These
scans are preset for your convenience
and can be customized in many ways.
MarketGauge gives you a lot of mate-
Figure 2: OPENING RANGE STATISTICS. The price pattern chart is annotated with up and down arrows rial to consider. To help you remember
where the low of the day, up arrows, or the high of the day, down arrows, occurred within the first 30 minutes. the material, MarketGauge created what
The period chosen established the high or low of the day 68% of the time within the first 30 minutes.
 Reprinted from Technical Analysis of Stocks & Commodities magazine. © 2010 Technical Analysis Inc., (800) 832-4642, http://www.traders.com
product review

it calls a Mindmap (Figure 3) to provide

a way of organizing the material. They
are the steps you want to go through to
maximize your odds of success.
One overall approach is identify the
most-active stocks in the premarket, then
update your watchlist with real-time up-
dates after the market has opened. After
the market has opened, you want to get
an idea of the general market direction.
MarketGauge suggests using Spy (Stan-
dard & Poor’s 500), Dia (Dow Jones
Industrial Average), Qqqq (Nasdaq
100), and Iwn (Russell 2000), and look
for times when all four are moving in the
same direction or find a situation where
FIGURE 3: OPENING RANGE MINDMAP. To help with organizing the material, MarketGauge has created a
three are showing the same behavior and series of elements that let you put material you learn into different buckets. Note that, independent of the time of
the fourth is divergent in a way leading day, you still want to scan for the most active, understand general market direction, and then recognize what type
the other three. Three might be showing of trading you can support — that is, a full-time trader scalping versus a part-time swing trader.
a bottoming pattern, for example, while
the fourth has moved off its lows and is
headed up.
Sectors refer to the usual suspects, and
MarketGauge’s HotScans web-based
dynamic tool product can help with a
beta product you can use to see which
industry groups are the most active and
what direction they’re going. Your time
horizon will affect how long you stay in
a trade and the period of your price bars
— for example, daily versus five-minute
bars. If you are trading five-minute bars,
it’s not likely you’ll be holding any posi-
tions open overnight, or if you just want
to trade before you go into work in the
morning.
FIGURE 4: PRICE CHART WITH REFERENCE VALUES. Six lines, where green is for high and red for low, are
OR Blueprint (Techniques) used to analyze price behavior: dashed lines are for a 30-minute opening (the red dashed line is under thicker
green line), nonlabeled solid lines are for yesterday’s range, and labeled lines are three-day pivot values. The
As you go through the individual MarketGauge dialog that might go with the chart would be something like: (1) prices move up, then consolidate
courses, you’ll become aware of what at the opening range high (white rectangle); (2) a wide range bar is the breakout above the bars leading into the
MarketGauge refers to as reference consolidation; (3) the 30-minute opening range high, and (4) checking the SPY at 8:15 am toward the end of the
points. These are three pairs of lines, consolidation shows weakness, and therefore, this stock is showing strength.
all related to opening range, six lines in
total since there is a high and a low for
each. The one you might not be familiar Opening Range is like other trading strategies
with is the three-day pivot. Basically, it that have strong success records with its heavy
smoothes the data by using a midpoint reliance on patterns.
calculated from a three-day range bar,
then calculates the high and low using
the difference between the midpoint principle: when prices are in a trend, of prices from a consolidation pattern
of the range and a three-day range bar say an uptrend, look for prices to move and that then moves above one of their
midpoint. above the reference line pivot high. The key reference points (the three-day
If this sounds confusing, an easier three-day pivot high would be the entry pivot high, when you are in an uptrend,
way to understand is to look at the Excel point. or below the three-day pivot low if in
calculation that MarketGauge supplies. The underlying principle that Market- a downtrend, is an example). Figure 1
Figure 1 gives an illustration of the Gauge follows is to look for a breakout illustrates this point by showing prices
 Reprinted from Technical Analysis of Stocks
breaking above the green dashed line
while in an uptrend. Market action that
breaks above (or below) is significant,
and hence, they are referred to as refer-
ence lines because price action often
reflects or refers to them. If you ask
how MarketGauge determines whether
prices are in a trend, the answer is that
they advise using the slopes of the 10-,
20-, and 50-day simple moving averages
(Smas) and whether the Smas are stacked
one above another.
To help create price charts with these
reference lines (Figure 4), you can go
to www.marketgauge.com/TS for the
TradeStation code. They also have a
chart template you can download for
TradeStation as well. Use TradeStation
8.6 or newer to get the code and template
imported. The type of MarketGauge
narrative to analyze the price action is
given in the Figure 4 caption. The very
last step in the caption is as important as
the first three. If you recall the discussion
about Mindmaps, one of the steps is to
check the overall market conditions.
& Commodities magazine. © 2010 Technical Analysis Inc., (800) 832-4642, http://www.traders.com
product review
An example of the care that has been
given to this course is that price action
relative to reference lines has its origins
in the second module, Basic Opening
Range Theory, where “Trading the line”
is discussed. The narrator doesn’t give
you specific details of the line, only that
it is support/resistance.
OR mastery
After completing the course, it’s time to
put what you know to work. For support,
the OR Mastery program provides six
hours of prior live seminars provided to
mastery participants. In addition, there is
a forum for all participants, with regular
messages left by Bysshe and Schneider
to guide you in your trading. Schneider’s
message is about overall market condi-
tions such as whether the market is
overbought or oversold, while Bysshe’s
is oriented toward HotScans screens you
will want to consider.
There is a live seminar once a month,
and twice-weekly training videos with a
monthly theme. Plus, a private Twitter
feed is in the works to provide real-time
alerts from Bysshe and Schneider. All
the live and video training is archived
and include such topics as volume-
weighted average price (Vwap), using
volatility index (Vix), and floor trader
pivots OR.
Summary
My friends often ask what I think the
market is going to do. If I were to ask
Schneider and Bysshe, I would pay at-
tention to the answer. And that is what
you get with the mastery program.
Opening Range is like other trading
strategies that have strong success
records with its heavy reliance on pat-
terns. Both Bysshe and Schneider trade
every day. You can’t do this for 20 to
30 years and still have any money if
you aren’t successful. Try this product.
You’ll like it.
Dennis Peterson is a Staff Writer for
Stocks & Commodities.
S&C