1. Define the Idea
Begin with the market behavior being studied. Avoid naming it as a strategy too early. The first step is to define the condition clearly enough that it can be found in the data.
2. Define the Reference
Every pattern needs a reference point. In the Intra-Day Momentum Method™, the session open is a primary reference. Other studies may use prior range, prior close, true gaps, inside days, narrow range days, or level interactions.
3. Define the Trigger Condition
The condition must be explicit. For example: price reaches ML1, price reaches MS1, both sides are reached, a true gap occurs, or price remains inside a defined range.
4. Define the Outcome
The outcome must also be explicit. Examples include close above the open, close below the open, close beyond a level, return to open, next-level progression, or reversal behavior.
5. Review the Distribution
The purpose of research is not to force a conclusion. The purpose is to review how often the condition occurred and what outcomes followed.