Surge
"I do not chase the opening break. I trade the resumption."
Surge
"I do not chase the opening break. I trade the resumption."
Surge operates on a simple but powerful market principle: intraday momentum persists, but the first move is often the most dangerous to chase.
Rather than trying to catch opening breakouts (which frequently fail and trap eager buyers or sellers), Surge waits. It lets the first hour of the trading session establish a clear, institutional direction. Once that direction is confirmed, Surge waits for a pullback — a temporary retreat in price back to the volume-weighted average price (VWAP) — and enters in the direction of the trend when the buying or selling pressure resumes.
By entering on the pullback, Surge filters out the initial session noise, secures an asymmetric reward-to-risk ratio, and rides the second wave (the "resumption surge") of the day's trend.
Imagine the trading day is a maritime voyage. The market open is like a sudden, chaotic gust of wind off the harbor walls — unpredictable, switching directions, and capable of capsizing ships that set sail too aggressively.
Zephyrus, the Greek god of the west wind, does not blow this initial gust. He waits until the atmosphere settles, then unleashes a steady, powerful, and sustained wind (the trend) in a singular direction. There may be a brief lull in the wind (the pullback), but once the sails fill again, the steady currents carry the ship swiftly to its destination.
Surge's job is to ignore the opening squall, wait for Zephyrus' steady wind flow to reveal itself, board during the brief mid-morning lull, and ride the surge to the harbor.
When institutions buy or sell massive quantities of stock, they create the first leg of a trend. However, they cannot execute these massive orders continuously without moving the price too far against themselves. So, they pause.
During this pause, early breakout buyers take profits, and short-sellers try to fade the move. This profit-taking and counter-trading pulls the price back toward the session's average price (VWAP). Once the price reaches this "fair value" level, the large institutions resume their buying or selling program, triggering a second, highly predictable surge in the original direction.
"The market is breakout-buying at the open! I need to buy now before I miss it!" They buy at the peak, get trapped when the pullback occurs, panic, and sell at a loss right at VWAP.
"The trend is established, and volume is drying up on this pullback to VWAP. This is profit-taking, not a reversal. I will buy the bounce off VWAP from the trapped breakout traders."
Surge monitors a watchlist of active, catalyst-driven instruments provided pre-market. It uses the first hour of trading to filter out choppy markets and rank the strongest trends.
Establish direction. At 10:00 AM ET, Surge measures the return since the prior day's close. To confirm institutional direction, the absolute return must be at least ±0.30%, and the price must be on the correct side of VWAP.
Check trend strength (ADX). Surge requires the 5-minute ADX(14) to be at least 22 and rising. If ADX is below 22, the market is too choppy, and the trend is not strong enough to trade.
Orderly retracement. Price must pull back to touch or sweep VWAP. This pullback must be orderly, characterized by overlapping candles and neutral-to-contracting volume (volume on pullback bars must be ≤ 110% of the session average 5-minute volume). The retracement depth should not exceed 61.8% of the initial impulse move.
Wait for confirmation. Surge never buys a falling price. It waits for a 5-minute candle to close back in the trend direction (above VWAP for longs, below VWAP for shorts), establishing a higher low (for longs) or lower high (for shorts). ADX is re-checked at the trigger to ensure it remains ≥ 22. Volume on the resumption bar is preferred to be expanding (≥ 1.2× average), though this is relaxed in the live v1 guidelines.
Because momentum requires clean, trending conditions, Surge skips days where catalysts are too volatile or volume is too thin:
Read the Scanner watchlist (produced at ~4:15 AM) and event calendar between 5:30–6:30 AM to file the daily plan. Check for macro skips. If VIX is ≥ 30, the session is immediately gated out.
Compute 30-minute signal return (must be ≥ ±0.30%) and check ADX (must be ≥ 22). Select the single best-qualifying instrument to watch.
Wait for the price to pull back to VWAP on volume ≤ 110% of average. Trigger entry upon a 5-minute confirmation candle closing back in trend direction and above/below VWAP, provided ADX is still ≥ 22.
Trail the runner position on the 5-minute 9 EMA or Chandelier exit (peak − 2.0× ATR). Take 50% profits at +1.5R. If a single 5-minute candle closes decisively past VWAP by ≥ 0.1% of the price, exit immediately under the VWAP Integrity Stop rule.
All positions are closed at market. Surge never holds positions into the late afternoon or overnight, avoiding overlap with ECHO's window.
Surge trades liquid ETFs (SPY, QQQ) using a strict risk management framework to preserve capital on non-trending days:
Surge risks exactly 0.75% of account equity per trade ($187.50 on a $25,000 portfolio). The number of shares is calculated dynamically based on stop-loss distance. Maximum concurrent positions is 1 (the co-fire limiter ensures only SPY or QQQ enters, never both). Surge permits a maximum of 2 positions per session, but only if the first position reaches its partial target before the 12:00 PM entry window closes.
Placed just beyond the pullback swing low (minus a 0.25× ATR(14) buffer). To protect against extreme noise or premature stop-outs, Surge enforces a minimum stop floor of 0.8× ATR(14) and a maximum width of 1.5× ATR(14) (skipping if the structure requires wider risk).
Once price reaches +1.5R, Surge exits 50% to lock in profit. The remaining runner is trailed using the 5-minute 9 EMA (exiting on a full candle close against the trend), or a Chandelier exit set at peak minus 2.0× ATR(14).
Surge is currently Phase 1 complete and has cleared its **Phase 2 backtesting** (v9 multi-instrument model). The strategy is awaiting final firm integration and deployment to live paper trading.
Across the development set (2021–2023, 96 trades), Surge achieved a 1.78 Profit Factor, 31.2% Win Rate, and 7.08% Max Drawdown. On the 2024 holdout set (25 trades), the edge expanded to a 2.83 Profit Factor, 40.0% Win Rate, and 2.38% Max Drawdown.
Although the win rate is relatively modest (typical of pullback strategies), the win/loss asymmetry (average win is ~3.9× average loss) results in highly stable, positive expectancy. TEMPER cleared the agent for Phase 3 on 2026-06-23.