Daily Open Line – Indicator for better picture of market

Daily Open Line is a very simple indicator that draws the line which represents the ending day price for the previous day. We can’t make a strategy to trade based on if we use just the indicator, but it can be one of the other Forex trading strategy parts.

You’ll agree that all of us who are in this job look at the limit for the ending of a previous day, someone looks at it by chance, and someone checks on close day while someone has the indicator that does the calculation of various price levels (high, low, open, close…). In this way we just get the price in which the day ended and forget about this limit which is important because the price reacts in that area excellently.

If we insert this indicator we’ll get a lot more information about the price behavior on this line.

Sideway trend – if we take a look at the picture of a sideway trend we’ll notice that all days in sideway trend are being closed on the same price, logical isn’t it. In this case daily open line should be observed as a spine of the market because that’s what it’s all about. When the price closes below or above the lateral trend we can consider that the spine of a lateral trend is actually broken and that it will keep on moving the direction in which it’s broke, so we assume that new trend is about to come.

In bull market, if the price is above open daily line, we consider this price as a support and if it’s about bearish trend than the line is the resistance.

In the next few examples take a look how the price reacts to the daily open line.

Download Daily Open Indicator (MT4 platform):

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