In Jim Dalton's book Mind Over Markets, the author talks about 4 different types of Open.
Open-Drive
Caused by the other timeframe who have made decisions before the opening bell. Aggressive auction in one direction. Price never trades back to the open.
Open-Test-Drive
Similar to Open-Drive except that the market lacks the initial confidence necessary to drive immediately after the bell. The market tests beyond a known reference point, such as previous day high/low, then reverses back to the open. The reversal point often establishes one of the day’s extremes. Once price has driven in one direction, it should not return to the point where the drive began.
Open-Rejection-Reverse
Market that opens, trades in one direction, and then meets opposite activity strong enough to reverse price back through the opening range.
Open-Auction
No apparent conviction at all. Depending on where price opens in relation to prior day’s range helps determine what price will do. If opening within yesterday’s range or value area, it will likely be a non-convictional day. If price opens out of range or value area (imbalance) the chances of a big price movements increase, also increasing the likelihood of a Double Distribution Trend Day. If price is within range, expect a Nontrend, Normal, or Neutral day.
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I'd like to create an indicator that helps identify the Open Type. Since most of Market Profile talk in on the 30min timeframes, I'd propose the open types be determined within the first 30min to an hour.
I either need to figure out how to code this, or at least find something that will get close to identifying the type of open each day is. The purpose is to determine what to expect from the remainder of the day.
If there are any other suggestions on early indications of the remainer of the day, I'm open to anything.
Thank you.
Open-Drive
Caused by the other timeframe who have made decisions before the opening bell. Aggressive auction in one direction. Price never trades back to the open.
Open-Test-Drive
Similar to Open-Drive except that the market lacks the initial confidence necessary to drive immediately after the bell. The market tests beyond a known reference point, such as previous day high/low, then reverses back to the open. The reversal point often establishes one of the day’s extremes. Once price has driven in one direction, it should not return to the point where the drive began.
Open-Rejection-Reverse
Market that opens, trades in one direction, and then meets opposite activity strong enough to reverse price back through the opening range.
Open-Auction
No apparent conviction at all. Depending on where price opens in relation to prior day’s range helps determine what price will do. If opening within yesterday’s range or value area, it will likely be a non-convictional day. If price opens out of range or value area (imbalance) the chances of a big price movements increase, also increasing the likelihood of a Double Distribution Trend Day. If price is within range, expect a Nontrend, Normal, or Neutral day.
---
I'd like to create an indicator that helps identify the Open Type. Since most of Market Profile talk in on the 30min timeframes, I'd propose the open types be determined within the first 30min to an hour.
I either need to figure out how to code this, or at least find something that will get close to identifying the type of open each day is. The purpose is to determine what to expect from the remainder of the day.
If there are any other suggestions on early indications of the remainer of the day, I'm open to anything.
Thank you.
