TD Open

Tom DeMark's gap-reversal signal. Flags bars whose open prints outside the prior bar's range but whose subsequent action recovers back inside it — a classic gap-and-fade reversal pattern. Useful for catching exhaustion gaps where the gap-open turns out to be a fade rather than a continuation.

Quick reference

Item	Value
Family	DeMark
Input type	Candle (uses open, high, low)
Output type	f64 — +1.0 buy, -1.0 sell, 0.0 no signal
Output range	{-1.0, 0.0, +1.0}
Default parameters	none — TdOpen::new()
Warmup period	2
Interpretation	Gap-and-fade reversal pattern detector

Formula

buy_signal  (+1.0):
    open[i] <  low[i - 1]               (gap-down open)
    high[i] >  low[i - 1]                (high recovers above the prior low)

sell_signal (-1.0):
    open[i] >  high[i - 1]               (gap-up open)
    low[i]  <  high[i - 1]                (low fades back under the prior high)

else: 0.0

The one-bar lookback means the indicator emits its first value on the second input candle. See crates/wickra-core/src/indicators/td_open.rs.

Parameters

None — TdOpen::new() takes no arguments.

Inputs / Outputs

Indicator<Input = Candle, Output = f64>. Python: TdOpen().batch(open, high, low) returns a 1-D np.ndarray (first bar is NaN). Node: same shape; update(candle) returns number | null.

Warmup

warmup_period() == 2.

Edge cases

• No gap. If open prints inside the prior range, no signal. Most bars on liquid instruments emit 0.0.
• Gap continues. If open < prev_low AND high <= prev_low (gap didn't recover), no signal — the gap was a true breakout, not a fade.
• Reset. Clears the previous-bar cache.

Examples

Rust

use wickra::{Candle, Indicator, TdOpen};

fn main() -> Result<(), Box<dyn std::error::Error>> {
    // Bar 1: range [98, 102]
    let c1 = Candle::new(100.0, 102.0, 98.0, 100.0, 1.0, 0)?;
    // Bar 2: gap-down open at 96, recovers above prev low 98
    let c2 = Candle::new(96.0, 99.0, 95.0, 97.0, 1.0, 1)?;
    let mut td = TdOpen::new();
    let _ = td.update(c1);
    let v = td.update(c2);
    println!("signal = {v:?}");  // expect +1.0
    Ok(())
}

Python

import numpy as np
import wickra as ta

o = np.array([100.0, 96.0])
h = np.array([102.0, 99.0])
l = np.array([ 98.0, 95.0])

td = ta.TdOpen()
print(td.batch(o, h, l))

Node

const wickra = require('wickra');
const td = new wickra.TdOpen();
console.log(td.batch([100, 96], [102, 99], [98, 95]));

Streaming

use wickra::{Candle, Indicator, TdOpen};

let mut td = TdOpen::new();
let candle_stream: Vec<wickra::Candle> = Vec::new(); // your live OHLCV candle feed
for bar in candle_stream {
    if let Some(v) = td.update(bar) {
        if v > 0.0 { /* gap-down → fade up (buy) */ }
        if v < 0.0 { /* gap-up → fade down (sell) */ }
    }
}

Interpretation

• Gap-and-fade. TD Open identifies the classic exhaustion-gap pattern: an emotional open in one direction that immediately reverses into the prior range. Often signals failed news-driven moves.
• Day-trade timing. Particularly useful for first-hour intraday systems on equity index futures — gap-fade signals fire often near the open and have measurable edge in range-bound regimes.
• Pair with trend filter. Gap-fades work best in range-bound markets; gap-continuations dominate in trending markets. Layer with a trend regime filter (e.g. EmpiricalModeDecomposition near-zero or low ADX) to gate signals.

Common pitfalls

• Trading every signal blindly. Single-bar gap signals have many false positives. Use as setup, not as full entry.
• Mixing intraday and EOD. A gap on minute bars is just noise; a gap between sessions is meaningful. Run TD Open on session-aggregated bars only.
• Ignoring confirmation. DeMark recommends waiting for the bar to close before acting on the signal — using intra-bar data introduces look-ahead bias.

References

• Tom DeMark, The New Science of Technical Analysis (1994) — TD Open.

See also

• TdDifferential — 2-bar reversal pattern sibling.
• TdRangeProjection — next-bar range projection.
• Indicators-Overview — full taxonomy.