A phenomenon of Open v/s high low

Open vs High – Opening price is significant especially at the beginning of market, to determine day trading strategies. Price at which stock first trade on trading day is known as opening price. Open vs high-low generally gives you the first impression of how a stock will perform throughout that trading day. Hence, the effect of news, events reflects on opening price, at times leading to opening of a stock in gap up or gap down.

When this opening price is compared with High or low helps  trader to take effective position in the market. Therefore, a specific feature where High price as well as low price could be compared with Open price at once would be beneficent for the trader.

Open vs High low can be understood into two sections, in order to generate Buy & Sell signal:-

  • Open  equals to high

This indicates Bearish trend as prices will probably move below high price. In other words, a trader can go Short.  Whereas Previous high will help a trader to identify breakout by comparing it with current day’s high price.

  • Open equals to low
open equals low

This indicates Bullish trend, thus a trader can go long. Here prices will possibly move upward beyond low price. However breakout can be determined by looking at Previous low.

We have thus developed open v/s high-low feature for traders to identify intra-day trading strategies and even the ‘%chg’ option plays an important role for intra-day traders. This feature in Truedata Cheetah is shaped in such a way where a trader can certainly take position by just observing the results.

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