Volatility at the open as a predictor for the rest of the session

[Fairman]

Volatility at the open as a predictor for the rest of the session

Early movement in a session often hints at the character of what follows. A large first-hour range after the London open tends to be followed by an active day, while a muted opening suggests a quiet one. It is not guaranteed, but the relationship is worth knowing.

For scalpers, it supports adaptive behavior. On days with a wide opening range, use larger targets and keep the system running through the session. On narrow-range days, reduce activity or switch to a mean-reversion style.

Measuring is simple. Calculate the range of the first 30 or 60 minutes after the open, and compare it with the realized range for the following hours across many days. Plot the relationship. If there is a meaningful correlation, build it into the rules.

Even a simple three-bucket classification, small, medium, large, can guide position sizing and target selection.

The benefit is dynamic adjustment without complicated forecasting. The market tells how active it is early and the system listens.

Does the opening range predict anything useful in the data for the pair being traded?