A Golden Gate is a momentum continuation pattern that measures the probability of extended price movement within the same trading day.
Price touches a 38.2% ATR level from the previous day's close
Price continues to the 61.8% ATR level on the same day
Why "Golden Gate"? Like crossing the Golden Gate Bridge, once you're on it, you're likely to complete the journey to the other side. This pattern reveals the probability of sustained directional momentum within single trading sessions.
ATR is a volatility indicator that measures the average range of price movement over a specified period, typically 14 days.
ATR calculates the average of true ranges over 14 periods, where true range is the largest of:
ATR helps traders understand normal price volatility to:
In our analysis, 38.2% and 61.8% ATR levels act as dynamic support and resistance zones. When price reaches 38.2% ATR from the previous close, it signals potential momentum. The 61.8% level serves as our target, representing a significant move relative to normal volatility.
6,344 trading days analyzed (corrected ATR)
6,346 trading days analyzed (corrected ATR)
Revolutionary analysis distinguishing between gap-open scenarios (stock opens beyond ATR levels) and intraday triggers reveals dramatically different success rates.
Success Rate
When stocks open beyond ±38.2% ATR levels, they reach ±61.8% targets with remarkable consistency
Success Rate
Traditional intraday touches of ATR levels show moderate continuation probability
Gap-open scenarios show a 20-25 percentage point advantage over intraday triggers, revealing that momentum continuation is dramatically more reliable when stocks gap beyond ATR levels at market open.
Stock opens beyond ±38.2% ATR levels (gap-open scenario)
Price reaches ±61.8% ATR levels (completion target)
Previous close: $100 → Opens: $104 (above +38.2% ATR) → High: $107 (reaches +61.8%) = COMPLETE gap-open
Previous close: $100 → Opens: $100 → High: $107 (reaches +61.8%) = COMPLETE intraday
Average True Range measures market volatility by calculating the average of true ranges over a specified period.
This volatility measure adapts to current market conditions, providing dynamic support and resistance levels.
Golden ratio-based percentages applied to ATR create mathematically significant price levels.
These ratios reflect natural market behavior patterns observed across multiple timeframes and instruments.
Detection of when price action interacts with specific ATR-based levels during trading sessions, regardless of opening price.
This method counts ANY interaction with the level during the day - whether price opens above/below the level and retraces to it, or approaches it from the opposite direction. This inclusive approach captures all momentum patterns including gap scenarios.
A momentum continuation event where initial level touch leads to extended level touch same day.
This pattern measures the probability of sustained directional movement within single trading sessions.
NEW: Enhanced logic that distinguishes between gap-open scenarios and intraday triggers for superior accuracy.
This revolutionary enhancement reveals that gap-open scenarios have ~75% completion rates vs ~54% for intraday triggers.
COMPREHENSIVE: Complete framework combining gap-open and intraday analysis with probability tiers.
Provides probability-tiered trading insights: high-probability gap-opens (~75%) vs moderate-probability intraday (~54%).
The enhanced methodology distinguishes between two distinct scenarios with dramatically different success rates:
Stock gaps above ATR level at open, showing immediate momentum that continues with high probability.
Traditional intraday momentum build-up with moderate continuation probability.
The 20+ percentage point difference between gap-open and intraday success rates represents a significant trading edge that was invisible in traditional Golden Gate analysis. This enhanced methodology enables probability-based position sizing and risk management.