Introduction
My name’s Evan Schunk, and in this case study I’ll share how my statistical gap trading system became the foundation of my success after two years of painful failures. I started day trading in 2018 with no process, just gambling on volatile stocks and getting crushed. What changed everything was my commitment to tracking data, identifying patterns, and ultimately implementing a foreign-exchange like systematic approach to gapper plays and overextended moves that work year after year.
Trader Talks QnA
What made you realize discretionary trading wasn’t working?
In my first 20 months of training, I was basically buying any gapper on opening and hoping for reversals. There was nothing to the process. I remember one particularly painful $2,000 loss on a small cap stock where I kept telling myself “I’ll catch this one” but kept getting stopped out. That moment broke me mentally – I realized gambling with market moves wasn’t sustainable.
When did statistical analysis become your turning point?
By 2019, I started tracking historical data through manual spreadsheets. The biggest revelation came from looking at overextended gap downs with specific criteria – market cap under $500M, float under 20 million, largest relative strength 30 minutes before open. When i analyzed Tim Grantani’s data, I saw a 80% close-below-open rate for certain pattern. That statistical edge – knowing the stock’s directional bias – changed everything for me.
How did partnering with your brother help?
When my brother started following my trades but added precise entries/exits from my data tables, he made $6,000 in one day while I only made $1-2K. That moment hit me – I realized I needed to make my discretionary trades more systematic. We started building criteria for exact entry points, stop placements, and trailing strategies that could be replicated every time.
What’s needed to remain systematic?
It takes real discipline to stay consistent – I track every single play’s data points: pre-market extension, 100 SMA relationship, volume trends. My entries are between $.05-$17 float stocks, usually 30-40 cent stop above the overextended move. The key is executing exactly what your data shows, even if you think “this time might be different” (because it almost never is).
How do you handle losing periods?
2021 was my worst time – 2 straight weeks of max losses. We had been riding our system too hard through changing market conditions. The data showed our pattern hadn’t worked as well in previous downcycles, but we stayed committed to the entries even when perfection wanted to chase. Situation became better when we updated criteria using Polygon market data through my partner, adding 5-year regression testing to each pattern.
What advice would you give earlier self?
I’d tell myself to trust the data more, not less. When you see a historical pattern hit 80%+ every year since 2015, don’t get greedy trying to perfect 50cent tighter entry. The emotional toll of second-guessing will cost you more than the supposed “lost profit” from a slightly higher entry. Just execute the systematic gap trading strategy exactly as your data shows it works.
Evan Schunk Trade Statistics
Evan’s trading methodology evolved from discretionary direction betting to clear rules-based systems delivering consistent profits:
- Prior 20 months: + -$10,000 from discretionary mall capital training
- 2018 systematically applied: +$2,000/month average post implementation
- Brother’s single-day profit: $6,000 on identical pattern
- Current edge: 80% winning rate on properly validated gap reversal patterns
| Year | Performance |
|---|---|
| 2020 | Extremely positive (gappers anomaly year) |
| 2021 | Significant drawdowns during pattern changes |
| 2022 | Consistent +11-15 trades/month |
Key Trading Insights from Evan Schunk
Evan’s journey provides actionable educational value for systematic & discretionary traders alike:
- Create trading journal with at least 4 data points/criteria per pattern
- Size trading like chipping away smaller than you think
- Never combine discretionary with properly functioning systems
- Adapt patterns using 3+ years historical data during market shifts
Evan Schunk Gap Trading Strategy
At its core, Evan’s statistical gap trading system applies strict pattern recognition:
Overextended Short Bias Plays
Trades gap downs with: Market cap <$500M, Float <20M shares, 30M pre-market within 1hr of open. Uses weighted 100SMA and volume trends to identify reversals that underperform 80% across all market conditions when not chased emotionally.
Precision Entry Method
System defines exact entry points – usually right after pre-market consolidates its lowest point for gap downs. Stops placed 30-40 cents above trade, not chasing breakdowns that already played below that level.
Evan Schunk Tools
Key technology underpinning Evan’s systematic approach includes:
- Timothy Sykes’ Trading Tickers DVDs for pattern identification
- Personal spreadsheets for tracking backtest data
- Cobra Trading platform for execution and short sale locates
- Partner relationship with Calvin for advanced Polygon data extraction
Common Trading Mistakes to Avoid
Two decades of personal experience from Evan’s gap reversal strategy journey produced these warnings:
- “Chasing Better Entries” just because something “feels” right
- Ignoring 5-year historical pattern validation when identifying opportunities
- Trading undisciplined after losses – cut size instead of revenge trading
- Building system based solely on someone else’s data instead of personal backtesting
Conclusion
In my statistical gap trading system, the numbers showed profitability would come through consistency – not predicting short-term winners perfectly. By backtesting patterns across multiple market conditions and drawing from partnerships like Cobra Trading and trust data providers, I found my voice in systematic trading that works long-term for disciplined market participants. If you’re ready to start your journey, remember the lessons: track data rigorously, size appropriately, and always return to the numbers when emotions arise.