Time ▾ Price ▴ Research: The Weekly Opening Range & ICT Weekly Range Profiles

Wednesday, October 4, 2023

The Weekly Opening Range & ICT Weekly Range Profiles

The Weekly Opening Range is defined by Monday's range. Monday sets the Opening Range high and low for the entire week. Tuesday may extend that range. It could become a false break, a break and range extension, a reversal, or maybe an inside day. In a large majority of weeks, by the time Monday and Tuesday has traded, the high or low extreme is in place for the week, and one of these will tend to hold, the other may get broken.

After Monday's Weekly Opening Range only three things can happen on Tuesday:

A Breakout from a Opening Range and Trend.
A Breakout from a Opening Range and Reverse into the Opening Range (false breakout or stop hunt).
A Trading Range between Highs and Lows of the Opening Range (inside day).

Coming into Wednesday, look for the following:

Did Monday or Tuesday close as an inside day?
Did Tuesday's breakout fail?
Did Tuesday close outside of Monday's Opening Range (= Opening Range Breakout) or inside?
Was Tuesday a First Red Day (FRD) or a First Green Day (FGD)?
Has there already been 3 levels of rise or fall from the High or the Low of the Week (LOW/HOW)? This could indicate a daily reversal.
Consider market structure!

Here are some additional observations related to whether Wednesday will be a reversal or a trend continuation of the Monday-Tuesday initial balance:

If the market closes outside of Monday's Opening Range on Tuesday, the probability that Wednesday continues the trend increases significantly (unless the breakout fails on Wednesday)
On Tuesday the market breaks out of Monday's range, but pulls back and closes inside of Monday's range (failed breakout). The probability of reaching for the other end of the Opening Range increases significantly.
If Monday's breakout fails, and Tuesday's breakout also fails at the other end of Monday's range, there is high potential for a Parabolic Trend Trade on Wednesday.
3 Pushes of drives out of the Weekly Opening Range coming into Friday has the highest potential for a large reversal.
If there are only 2 drives out of the Opening Range coming into Friday, there is a higher probability for a Parabolic Trend Trade.
If the breakout on Tuesday closes 3 levels of rise or fall out of the Opening Range, the potential for reversal throughout the week increases.
In most instruments the Tuesday-Friday range extension from Monday's opening range is usually a multiple of 0.5, 1.0, 1.5, 2, 3, 4 or 5 of Monday's range.
In most instruments the Average Weekly Range equals 1.8 to 2.3 times the Average Daily Range.