Lesson 17 of 31 · Zero to reading a chart

The Market Open: What the Chart Looked Like at 9:35

At 9:30 every order that waited overnight lands at once, so the first minutes are the crowd discovering the price, not the price choosing a direction; box their high and low and call it the range.

This is a real chart, at nine thirty-five in the morning. Five bars. Which way is it going?

Most people answer. Up, or down.

But this is all anyone had. Five minutes.

Last time: an order placed before nine thirty does not trade. It waits in a queue.

And the night before was full of decisions.

Think of a stadium with one gate. All night, a crowd has been gathering outside. People who decided, hours ago, that they wanted in or out.

At nine thirty the gate opens. Everybody pushes through at once.

The first few minutes inside are not a game. They are people finding their seats.

That is what the open is. Every order that waited overnight arrives in the same moment.

Buyers and sellers who never met all trade at once. The price jumps around while they find out what everybody will pay.

It is not direction yet. It is discovery.

The first minutes are the crowd working out the price.

Not the price telling you where it is going.

Here is the real thing.

Nine thirty. Nine thirty-one. Thirty-two. Thirty-three. Thirty-four. Five one-minute candles, and nothing else. This is what the chart looked like at nine thirty-five.

Now draw a box. The top is the highest price in those five minutes. The bottom is the lowest.

That box has a name: the range. The first range of the day.

Now watch the rest of the day arrive, at the same scale.

The box that looked so big at nine thirty-five is a small thing now.

The day went somewhere the first five minutes did not point.

Nobody was fooled. At nine thirty-five, the day had not decided anything yet.

At nine thirty, everyone's overnight decisions land at once. The first minutes are the crowd discovering the price.

Box them. Name the box a range. Know that it is not a direction.

Here is the mistake. Somebody sees the first candle go up and says: it's going up today.

They have read a crowd finding its seats as a crowd choosing a side.

The first move is real. Just not the answer to that question.

And the same thing is true in reverse. A red first candle is not: down today.

The box is what the crowd did while it arrived.

Tomorrow, cover everything after nine thirty-five with your hand. Ask what you would have known.

Check yourself

Why is 9:30 different from 11:30?

Everyone's overnight orders land at once.

Is the first move the direction?

No. It is discovery.

What is the box?

The high and low of the first minutes. The range.

Next lesson: 9:40 and 2:40 are not the same move.

For learning only. Not financial advice, not signals, not stock picks.