Opening-range breakout: wait for the retest.

The lesson on YouTube

Watch. Then work through the idea.

Watch the English lesson first, then use the worked example and quiz below to check the idea. The article is a companion, not a transcript.

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What is actually happening?

The opening range is the high and low of a declared start-of-session window. In this example, two completed candles inside the first 15 minutes test the same upper price. Their body tops and wick highs define a narrower resistance band. We keep it fixed, then wait for a break, a retest and a close back above it.

Keep the boundary clear. A chart observation does not reveal a participant’s identity, intention or future orders.

Guided example · synthetic 5-minute candles

Break. Retest. Then decide.

Follow one opening-range example. Tap a candle to see its role. The blue band stays fixed as new candles appear.

Step 1 of 809:05 · 5M

Tap candles · drag history · wheel to zoom · arrow keys to inspect

Restart, examples & exact rules

Example

The model session starts at 09:00. Its first three completed 5M candles form the 09:00–09:15 opening range: 102.40–104.00. Two of them test 104.00 with body tops at 103.60. For this exercise, their upper wick-to-body band is fixed at 103.60–104.00, midpoint 103.80. This narrow band is distinct from the full opening range.

Long rule: a later close above 104.00, a subsequent return into the fixed band, then a completed close above 104.00. Only then model an entry at the next opening price. A completed close below 103.60 before entry cancels this setup. A touch or a close inside the band is insufficient. Other zone definitions and entry rules exist.

The entered examples assume a fill at 104.30, stop 103.50 (0.20 below the retest low), target 105.90: risk 0.80, reward 1.60 per unit, or 2R. One unit has $1 per price point; fees, spread and slippage are assumed zero here. Real execution can differ. Outcomes A and B share all candles through entry. C demonstrates cancellation before entry. These authored examples do not establish profitability.

The sequence is: first test → second test and frozen band → wick-only break → closed breakout → retest inside the band → completed close back above → next-open entry → outcome. The exercise needs JavaScript for interaction.

Make the conditions explicit.

01 / CONTEXT

Specify exchange, session start, timezone, daylight-saving treatment and window length. A 24-hour market still needs an explicitly chosen session convention.

02 / TRIGGER

For this exercise: fix 103.60–104.00 only after both source candles close. Require a later close above 104.00, a subsequent return into the band, and a completed close back above 104.00. Evaluate the next opening price only after all three conditions.

03 / CANCEL OR INVALIDATE

Before entry, a completed close below 103.60 cancels this setup. A close inside the band means wait. Also skip if the declared session cutoff has passed or the smallest position exceeds your cash-risk budget.

The quoted rules are illustrative research specifications. Parameters are not recommendations and have not been presented as profitable backtest results.

What can this cost?

Opening volatility can cause wide spreads and slippage. Do not use a completed range’s final values for a signal that occurred before the window closed.

Calculate the size from your assumptions

How the idea can fail.

Price can close above the range and immediately return inside. A failed breakout is not automatically a valid opposite-direction trade.

Practical habit

Put the session time and cutoff in the rule’s title. This prevents ambiguous “open” definitions when you review trades later.

Go one level deeper

Compare holidays, early closes and daylight-saving transition weeks separately. Do not silently mix incompatible session windows.

Check your understanding

The retest closes at 103.85 inside the 103.60–104.00 band. What does this rule require?

Enter immediately because the band was touched Wait for a completed close back above 104.00 Move the band down to make the entry valid