O
OOPS Gap-Reversal (Inna Rosputnia / Larry Williams)
Inna Rosputnia / Larry Williams
Analysed 01 Jul 2026, 11:31 PM IST
Detected components (auto-read from transcript)
Claims it makes (quotes pulled from the transcript)
- “A gap-reversal swing pattern: in a downtrend, when today opens BELOW yesterday's low (a panic gap) and then climbs back across yesterday's low, BUY there with a stop below the gap-day's low; mirror for shorts. Pitched at 70–80% accuracy.”
Verdict
One of the few setups in this entire study with a genuine, durable edge — credit where it's due. The panic-gap reversal is a real anomaly: a stock that gaps below yesterday's low and reclaims it tends to keep recovering into the close, and exiting there is solidly positive after costs — +0.42R per trade across 27,000 trades, payoff ~2.9. The 'only in a trend' filter she stresses helps a little. Real, mechanical, teachable.
How we tested it
Mechanized on 158 daily large/mid-caps over 8 years with real Zerodha delivery costs — long & short, trend-filter on/off — and scored across five exits (same-day close, next-day close, fixed 1:1, 1:2, and the prior-day range). 27,000 trend-filtered trades.
But the '70–80% accuracy' is false — the measured win rate is ~43%; the edge comes from the payoff (≈2.9), not the hit rate. And it only works if you exit at the close or prior-day range — the textbook fixed 1:1/1:2 target most people bolt on actually loses (the tight gap-day stop gets chopped before the target pays). Two honest asterisks: it's tested on daily bars (real fills use the intraday cross, so live slippage will shave the edge), and her own results were on commodities/futures, not Indian equities — index/commodity futures would be the fairer arena. Net: a genuinely profitable pattern, mis-sold on win rate, that lives or dies by riding the reversal to the close rather than capping it.
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