CandleFocus Glossary Editor
What is Opening Range?
The Opening Range is the first price range of a trading day. It consists of the highest and lowest prices that a security traded within during the first 15 minutes of the trading session. Opening Ranges are important to traders because they provide insight into directional bias and market sentiment for the day. Day traders and short-term traders often use the Opening Range as a tool to manage their positions throughout the day.
Though the opening range has been in use since the early days of trading, its use has grown as electronic markets have become more prevalent, allowing traders to easily access data and respond quickly to changing market conditions. The Opening Range has been embraced by many professional traders and investors and is a frequently used tool in technical analysis.
The Opening Range is primarily used for identifying trends and market sentiment for the trading day. A strong opening range can indicate bullish market sentiment, or a strong direction upwards, while a weak opening range could indicate bearish sentiment or a weak direction downwards. Traders often use this information to identify potential entry or exit points for a trade.
The Opening Range is also sometimes used as a trading strategy. For example, a trader may purchase a stock if it breaks out of the Opening Range, signaling stronger bullish sentiment, rather than wait for a longer-term trend to develop. Traders may also sell a stock if it breaks below the Opening Range. This could suggest bearish sentiment and could potentially provide a trader with an ideal exit point.
In addition, many market professionals will use the Opening Range to measure market volatility. During times of higher volatility, traders may look to the Opening Range to help identify potential support and resistance levels. Furthermore, a wide spread between the high and low of the Open Range may indicate a more volatile trading day while a narrower spread could indicate a more tranquil trading day.
In summary, the Opening Range is an important indicator for traders who are looking to gain an advantage in the market. By monitoring the Opening Range, a trader can gain a better understanding of market sentiment and potential entry or exit points for trades. Furthermore, the Opening Range can be a useful tool for determining the levels of market volatility throughout the trading day.
The Opening Range is the first price range of a trading day. It consists of the highest and lowest prices that a security traded within during the first 15 minutes of the trading session. Opening Ranges are important to traders because they provide insight into directional bias and market sentiment for the day. Day traders and short-term traders often use the Opening Range as a tool to manage their positions throughout the day.
Though the opening range has been in use since the early days of trading, its use has grown as electronic markets have become more prevalent, allowing traders to easily access data and respond quickly to changing market conditions. The Opening Range has been embraced by many professional traders and investors and is a frequently used tool in technical analysis.
The Opening Range is primarily used for identifying trends and market sentiment for the trading day. A strong opening range can indicate bullish market sentiment, or a strong direction upwards, while a weak opening range could indicate bearish sentiment or a weak direction downwards. Traders often use this information to identify potential entry or exit points for a trade.
The Opening Range is also sometimes used as a trading strategy. For example, a trader may purchase a stock if it breaks out of the Opening Range, signaling stronger bullish sentiment, rather than wait for a longer-term trend to develop. Traders may also sell a stock if it breaks below the Opening Range. This could suggest bearish sentiment and could potentially provide a trader with an ideal exit point.
In addition, many market professionals will use the Opening Range to measure market volatility. During times of higher volatility, traders may look to the Opening Range to help identify potential support and resistance levels. Furthermore, a wide spread between the high and low of the Open Range may indicate a more volatile trading day while a narrower spread could indicate a more tranquil trading day.
In summary, the Opening Range is an important indicator for traders who are looking to gain an advantage in the market. By monitoring the Opening Range, a trader can gain a better understanding of market sentiment and potential entry or exit points for trades. Furthermore, the Opening Range can be a useful tool for determining the levels of market volatility throughout the trading day.