Lesson 07

Value and where the market opens

Where today opens relative to yesterday's value area is one of the first reads of the day. It tells you whether the market is still happy with yesterday's prices or is testing new ones.

In one lineOpen inside value: expect rotation. Open outside: the market has to prove the new price, or come back.

Three places to open

Inside yesterday's value. The market accepts yesterday's prices. Rotation inside the range is the base case.
Outside value, inside yesterday's range. A mild vote for change. Watch whether price can stay out.
Outside yesterday's range. A strong vote for change. Either new value builds out there, or price comes back toward yesterday's value.

Today opens above yesterday's value, fails to build trade up there, and returns inside. Illustration from simulated prices, not a real session.

A word on rules of thumb

You will hear rules with percentages attached, like "if it gets back inside value it will cross to the other side". Treat every one of them as a claim to test on your own data before you trade it. The structure (inside, outside, accepted, rejected) is the useful part.

Key terms

Prior value areaYesterday's VAH to VAL.

Gap openOpening outside yesterday's range.

Acceptance outside valueNew trade building beyond yesterday's value.

Return to valuePrice coming back inside after an outside open.

Try it

For the next ten sessions, write down where the market opened against yesterday's value, and where it was at noon. Your own tally is worth more than any quoted percentage.

AXIS Desk · AMT Fundamentals · free. Education only, not trade advice. Futures trading involves substantial risk of loss; past patterns do not guarantee future results.