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Opening Candle Continuation

Whether the first candle direction persists or reverses through the session

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Opening Candle Continuation — Strategy Guide

First Candle as Directional Signal

The direction of the first RTH candle (5, 15, or 30 minute) can be a surprisingly reliable indicator of session direction. This report measures continuation rates — how often the session closes in the same direction as the opening candle.

Key Findings

Strong Open — A large-bodied opening candle with minimal wick. Continuation rates are highest (60-70%) with strong opens.

Weak/Doji Open — A small-bodied or doji opening candle. These have near-random continuation rates and signal indecision.

Candle Size Impact — Opening candles in the top quartile of size have significantly higher continuation rates than average.

Trading Strategy

If the opening candle is strong (large body, closes near its high/low), trade in its direction with a stop below/above the candle. If the opening candle is a doji or small body, wait for the second candle for confirmation or look for a fade setup.

Pro Tip

The 15-minute opening candle offers the best balance between reliability and early entry timing. The 5-minute is too noisy and the 30-minute makes you give up too much potential range.

Midnight Open Retracement

Engulfing Candles