The weekly open range as a reference

[Fairman]

The weekly open range as a reference

Many traders mark the first few hours of the week, from the Sunday open into early Monday, and treat the high and low as a range that matters. The idea is that the early positions set the stage for the week.

For scalpers, it offers fixed reference levels that do not change daily. A break of the weekly opening range can mark a shift in direction, while a failed break gives a good reversal setup.

The range is easy to compute, but it has quirks. The Sunday open is thin, with wide spreads and odd quotes, so the extremes can be influenced by noise rather than real flows. Choosing the starting point, whether the first tick or the start of London on Monday, changes the numbers.

Testing is the only honest answer. Mark the range for each week over a year, and check how price behaves around the highs and lows.

Even if the results are mixed, the exercise teaches how the first hours of the week differ from the rest.

One refinement is excluding the first hour of the Sunday open from the range, since it is thin, and starting at the Asian session proper. The resulting levels tend to be cleaner.

How has the weekly opening range worked as a reference on the pairs traded?