OPEN-SOURCE SCRIPT

Opening Range

Updated
The opening range or first 30 minutes of trading during the day sets the tone and becomes an important reference through the rest of the day. Price will react as it reaches the high and low of the opening range.

Backtesting has shown that the strategies based on the opening range have merit and provide an edge in trading. By not being aware of these points of reference you put yourself at risk.

In addition to the opening range, the distance from the high or low of the opening range plus the width of the opening range forms another important reference point.

Opening Range Rules.

Price must break out of the opening range in order to have a trending day. As long as price is inside the opening range, expect the trade to be choppy.

Once price leaves the opening range the market can begin to trend. However, before it trends most times it will retest the boundary of the opening range. This is a critical point, and a better than average entry for a position to join the trend. However, if price closes back inside the opening range watch out. Re-entry to the opening range has a high probability of going to the middle of the opening range, and a better than average probability of crossing the entire opening range.

snapshot

In the above chart we can see price broke below the opening range then returned to retest the opening range before beginning a downward trend that delivered 175 pts on NQ.

snapshot

Upon re-entering the opening range price tried to break down again but ultimately traveled up until it hit the 50% mark of the opening range.

snapshot

Once a trend has begun the first target is the green line which is 1 width of the opening range outside of the opening range.

snapshot

Once price broke out of the opening range to the upside, it came back to retest the opening range high, before beginning an uptrend that delivered 120 pts on NQ.
Release Notes
The opening range or first 30 minutes of trading during the day sets the tone and becomes an important reference through the rest of the day. Price will react as it reaches the high and low of the opening range.

Backtesting has shown that the strategies based on the opening range have merit and provide an edge in trading. By not being aware of these points of reference you put yourself at risk.

In addition to the opening range, the distance from the high or low of the opening range plus the width of the opening range forms another important reference point.

Opening Range Rules.

Price must break out of the opening range in order to have a trending day. As long as price is inside the opening range, expect the trade to be choppy.

Once price leaves the opening range the market can begin to trend. However, before it trends most times it will retest the boundary of the opening range. This is a critical point, and a better than average entry for a position to join the trend. However, if price closes back inside the opening range watch out. Re-entry to the opening range has a high probability of going to the middle of the opening range, and a better than average probability of crossing the entire opening range.

snapshot

In the above chart we can see price broke below the opening range then returned to retest the opening range before beginning a downward trend that delivered 175 pts on NQ.

snapshot

Upon re-entering the opening range price tried to break down again but ultimately traveled up until it hit the 50% mark of the opening range.

snapshot

Once a trend has begun the first target is the green line which is 1 width of the opening range outside of the opening range.

snapshot

Once price broke out of the opening range to the upside, it came back to retest the opening range high, before beginning an uptrend that delivered 120 pts on NQ.
balanceBands and ChannelsIBinitialopeningrange

Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.

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