True Opens in Quarterly Theory: Spot High‑Probability Trades

This article details the concept of "true opens" within the framework of Quarterly Theory, explaining how they are identified across various time cycles and how they can be used to filter out low-probability manipulation and identify high-probability trading setups.

Understanding True Opens

True opens are specific price levels derived from the open of the second quarter (Q2) candle within any given time cycle. They serve as a critical filter for market manipulation, helping traders distinguish genuine reversals or retracements from fake ones. The core principle is that price action relative to a true open indicates whether the market is in a premium (above the true open, suggesting short opportunities) or discount (below the true open, suggesting long opportunities) state for that specific cycle.

Identifying True Opens Across Cycles

The identification of true opens is consistent across all cycles: it is always the open price of the first candle of Q2. The specific timing and timeframe for viewing these opens vary by cycle:

• Quadrennial Cycle (4-year cycle):
  • Viewed on: Monthly timeframe.
  • True Open: The first monthly candle of the second year (Q2) of the cycle. This typically aligns with the first month of an election year.
• Yearly Cycle:
  • Viewed on: Weekly timeframe.
  • True Open (True Year Open - TYO): The first weekly candle of April. (January-March is Q1, April-June is Q2).
• Quarterly Cycle:
  • Viewed on: No specific date or time, as there are many quarterly cycles within a year.
  • True Open: The open of the first candle of the second quarter (Q2) of any given quarterly cycle.
• Monthly Cycle:
  • Viewed on: 4-hour timeframe.
  • True Open (True Month Open - TMO): The Sunday 18:00 (6 PM) candle of the second full week of the month.
    • Distortion Weeks: A "distortion week" occurs when a week starts in one month and ends in the next (e.g., starts in September, ends in October). These are ignored as Q0. The first full week after a distortion week is Q1, and the subsequent week is Q2.
• Weekly Cycle:
  • Viewed on: 1-hour timeframe.
  • True Open (True Week Open - TWO): The Monday 18:00 (6 PM) candle, which technically represents Tuesday's open (Asia session of Tuesday).
• Daily Cycle:
  • Viewed on: 15-minute timeframe.
  • True Open (True Day Open - TDO): The midnight (12 AM) candle open. This aligns with the "midnight open" concept taught by ICT.
• 90-Minute Cycle (Session Opens):
  • Viewed on: 5-minute timeframe.
  • True Open (True Session Open): The Q2 open for each session.
    • Asia Session: 7:30 PM (Q1 is 6:00 PM - 7:30 PM, Q2 is 7:30 PM - 9:00 PM).
    • London Session: 1:30 AM.
    • New York AM Session: 7:30 AM.
    • New York PM Session: 1:30 PM.
• Micro Cycle:
  • Viewed on: 1-minute timeframe.
  • True Open (True Micro Session Open - TMO): The Q2 open of the micro cycle. There are numerous micro session opens within a day.

Utilizing True Opens in Trading

True opens are integrated into the accumulation, manipulation, and distribution (AMD) framework of Quarterly Theory.

1. Establish the True Open: Once Q2 begins, mark the open price of its first candle.
2. Look for Manipulation:
   • For a bullish setup: Expect price to drop below the true open, ideally taking out previous quarter lows or liquidity, before reversing and pushing higher.
   • For a bearish setup: Expect price to push above the true open, ideally taking out previous quarter highs or liquidity, before reversing and dropping lower.
3. Confirming Manipulation: A strong close back above (for bullish) or below (for bearish) the true open after the manipulation confirms the move.
4. Distribution Phase: After confirmed manipulation, price is expected to distribute in the intended direction towards a higher timeframe draw on liquidity.

Important Considerations:

• Not an immediate entry signal: Being above or below a true open doesn't automatically mean shorting or longing. It's a gauge for market state.
• Manipulation is key: For a bullish setup, you must see manipulation below the true open first. You can still enter long above the true open after this manipulation has occurred and been confirmed.
• Reactive Levels: True opens are highly reactive levels. Price often bounces off them or retests them after manipulation.
• Exceptions: During extremely expansive candles (e.g., a super bullish weekly candle that just rips higher), price might not drop below the true open. However, in most cases, manipulation around the true open is expected.
• Filtering Fake Manipulation: If what appears to be manipulation occurs but price hasn't traded above/below the true open for that cycle, it might be "fake manipulation" designed to build liquidity before the actual manipulation around the true open.

Stacked True Opens

Stacked true opens occur when true opens from different time cycles align in a specific order, significantly increasing the probability of a reversal setup.

• Bullish Stacked Opens:
  • The true open of the cycle you are viewing (e.g., True Micro Session Open) is below the true open of the next higher cycle (e.g., True Session Open).
  • When price dips below both stacked opens, it creates a very high-probability setup for a bullish reversal.
• Bearish Stacked Opens:
  • The true open of the cycle you are viewing is above the true open of the next higher cycle.
  • When price pushes above both stacked opens, it creates a very high-probability setup for a bearish reversal.

While stacked opens increase probability, they are not strictly necessary for a valid setup. The primary requirement is to see manipulation above or below the current cycle's true open.

Chart Examples

Weekly Cycle Example (ES, 1-hour timeframe)

• Scenario: A weekly cycle with a bullish bias.
• Observation: The True Week Open (TWO) is established. Price initially chops around it.
• Manipulation: On Wednesday (Q3), price manipulates below Tuesday's low and below the TWO.
• Confirmation: Price aggressively expands away, displacing and closing strongly back above the TWO.
• Distribution: This is followed by distribution higher on Thursday and continuation on Friday.
• Key Takeaway: The manipulation below the TWO confirmed the bullish weekly move.

90-Minute Cycle Example (Friday, New York AM Session, 5-minute timeframe)

• Scenario: New York AM session, looking for a bullish move.
• Stacked Opens: The True Session Open (for the 90-minute cycle) is below the True Day Open, indicating a bullish stacked open scenario.
• Q1: Price shows continuation below Q4's lows.
• Q2: Offers a tighter range, an accumulation phase.
• Q3 Manipulation: Price drops below Q2's lows and below both stacked true opens. This provides high confidence for a reversal.
• Confirmation & Distribution: Price aggressively breaks above both true opens and then pushes significantly higher, distributing throughout Q3 and Q4.
• Key Takeaway: Stacked true opens provide extra confirmation for high-probability reversal setups. The speed of manipulation within Q3 allowed for the subsequent distribution.

In summary, true opens are a fundamental concept in Quarterly Theory, providing a time-based premium/discount framework that helps traders identify and confirm market manipulation, leading to higher-probability trading opportunities.