The Opening Range Strategy: One Candle a Day (Free Guide)

Key takeaways

Mark the high and low of the first 5 minute candle, those two levels are your whole day
A break only counts with displacement: a fair value gap through the level
Wait for the retest of the gap and an engulfing candle before entering
Stop goes one tick beyond the retest candle, target a fixed 3 to 1
One trade a day. If the setup does not come, there is no trade

Why boring wins

Most beginners lose because they take ten impulsive trades a day. This strategy allows one. You mark two levels in the first five minutes of your session, and if price never gives you the full setup at those levels, you close the laptop. That discipline is the edge as much as the entry itself.

Every image below is taken straight from the video, so you can follow along frame by frame. The left column shows the 5 minute candle (the FCR, First Candle Range); the right column shows the same five minutes broken into 1 minute candles, starting at the 9:30 tag.

Step 1: Mark the first candle's high and low

Chart with the first 5 minute candle on the left and its high and low extended right as horizontal levels — The first 5 minute candle sets two levels. Everything else waits.

At your session open (9:30 New York for US indices, or your own fixed hour on synthetic indices, which trade 24/7), let the first 5 minute candle finish completely. Mark its high and its low and extend them across your chart. Those are the only levels you care about today.

Step 2: Ignore the fake breaks

Chart showing price poking at the high level, marked not a candle close and not a wick — A wick through the level is not a break. Even a close through it is not a break.

Price will poke at your levels. A touch is not a break, a wick through is not a break, and a candle close beyond the level is still not enough on its own. Price can close through a level and reverse straight back. This is where most people lose: they buy the first poke and get trapped.

Step 3: Wait for displacement

A large green candle pushing forcefully through the high level, labelled Displacement — Displacement: one expansive candle that leaves no doubt who is in control.

What you want is displacement: an expansive candle that drives through your level with real force. It is the market showing you which side is actually in control, and it is visibly different from the pokes in step 2.

Step 4: Find the fair value gap

The displacement candle with a grey gap box between the wick before it and the wick after it, straddling the high level — The gap between the two wicks, sitting right on the broken level. That box is your zone.

Displacement leaves a footprint: a fair value gap, the empty space between the wick of the candle before it and the wick of the candle after it. When that gap prints through your high or your low, the setup is armed. Now you do nothing and let price come back.

Step 5: The retest and the engulf

Price pulling back into the gap box, then a green candle engulfing the retest candle, labelled Engulfing — Price returns to the gap, then one candle swallows the retest candle whole. That is the entry.

Price almost always returns to retest the gap it left. Let it come. Your trigger is an engulfing candle, one whose body completely swallows the retest candle. That is the market confirming the level has flipped, and that is your entry, at the close of the engulfing candle.

Step 6: Stop and target, fixed, every time

The completed trade with a red stop zone below the entry and a green target zone three times as tall above it, labelled 3 to 1 — The red box is the risk, the green box is exactly three times it. Price runs to target.

Entry: at the close of the engulfing candle
Stop: one tick beyond the retest candle's low (for longs) or high (for shorts)
Target: exactly 3 times your stop distance. No trailing, no moving, no "just a bit more"

At 3 to 1 you only need to win about 1 trade in 3 to stay ahead of breakeven. That is what lets one boring trade a day compound.

Before you trade it

Run every setup through the pre-trade checklist first, and practise the pattern on the free entry trainer until spotting the gap and the retest is automatic. If you are brand new to charts, start with the free beginner course, it covers candles, structure and risk in 20 short lessons.

Then take at least 20 trades on a demo account before any real money touches the market. The setup is simple; the patience is the hard part.

Try trading free, $10,000 virtual demo →

Frequently asked questions

What is the opening range strategy?

You mark the high and low of the first 5 minute candle of the session, then trade the first clean break of either level. The break only counts when it comes with displacement, a fair value gap through the level, followed by a retest and an engulfing confirmation candle. One setup per day, fixed 3 to 1 target.

What time does the opening range start?

For US index sessions the classic open is 9:30 New York time, which is 13:30 or 14:30 UTC depending on daylight saving. On Deriv's synthetic indices there is no market open, they trade 24/7, so traders apply the same logic to the start of their own session or a fixed hour they always use.

What is a fair value gap?

A three candle pattern where the middle candle moves with enough force that the first candle's wick and the third candle's wick never overlap. The empty space between them is the gap. It shows one side took control, which is what separates a real break from a fake one.

Why not just enter when the level breaks?

Because a break alone means nothing. Price can wick through a level or even close through it and still reverse straight back. Waiting for the gap, the retest and the engulfing candle filters out most of those traps, at the cost of missing some moves. That trade-off is the strategy.

Where does the stop loss go?

One tick beyond the low of the retest candle for longs, or beyond its high for shorts. The target is fixed at 3 times the stop distance. If the maths does not give you at least 3 to 1 to the next obvious level, you skip the trade.

Can I practise this without risking money?

Yes. A free Deriv demo account comes with $10,000 of virtual funds, and the setup appears on any liquid market. Take 20 demo trades with this exact checklist before you even think about real money, and keep risk at 1% per trade when you do go live.

Written by Tony: AA Global FX
Tony runs a live trading desk on Deriv synthetic indices and index CFDs and has published 116+ free trading tutorials on YouTube since 2022. About · YouTube
Last updated: 2026-07-17

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