Module 5 · The Open & Application
The Open Relative to Value
Inside, outside-but-inside-range, or a gap.
In this lesson you'll
- Read where the day opens vs prior value/range
- Map location to a balance or trend lean
- Combine open type with open location
Layer where the day opens (relative to yesterday's value area and range) onto the open type:
- Open inside prior value → balanced expectations; responsive/fade bias; lower odds of a trend day. Fade VAH/VAL back to the POC.
- Open outside prior value but inside prior range → mild imbalance; watch whether prior value accepts or rejects price.
- Open outside prior range (a gap) → directional signal. Gap acceptance (price holds away from prior value) → trend continuation, value migrates. Gap rejection/fill (price gets pulled back into prior range) → responsive, fade back toward prior value/POC.
Key takeaways
- Open inside prior value → balance/rotation; fade edges to POC.
- Open outside value but inside range → mild imbalance; watch acceptance/rejection.
- Gap (outside range): acceptance → trend continuation; rejection/fill → fade to value.
- Combine open TYPE with open LOCATION for the strongest read.
Check your understanding
Pick an answer to reveal instant feedback. Answer every question to complete the lesson.
Why that's off: Fading to the prior POC is the gap-REJECTION/fill case.
Why that's off: Holding outside value is imbalance, not balance.
Why that's off: Acceptance means continuation, not reversal.
Gap acceptance — holding away from prior value — means the market accepts the new prices and value migrates that way, favoring trend continuation.
Why that's off: Trend days more often open outside value or open-drive.
Why that's off: Opening inside value means there's no gap.
Why that's off: Double distribution is a profile shape, not an open location.
Opening inside prior value means both sides are comfortable with current prices, so the base case is rotation/balance — fade the value-area edges toward the POC.
Educational content only. Nothing here is financial or trading advice. Order-flow and options patterns shift probabilities; they never guarantee outcomes.