What Are Open Auction Types in Trading?

Market Context · ~9 min read · Updated 2026

The first 30 minutes of any session contain more information about the day's intent than almost any other window. Professional traders categorise these openings into four open auction types: Open Drive (OD), Open Test Drive (OTD), Open Rejection Reverse (ORR), and Open Auction (OA). Each one is a recognisable pattern with a different probabilistic outcome — and each calls for a different style of trade.

This guide explains what each open type looks like, what causes it, what it tends to predict for the rest of the session, and how to use it as part of a complete trade plan. Every example is anchored to the prior day's value area, which is why the value area concept is the prerequisite for understanding open types.

Why the Open Matters More Than You Think

Markets are continuous auctions, but the open is the moment overnight order flow finally hits the order book. Institutional desks adjust positions, retail orders queued overnight execute, and economic data released before the bell gets fully priced. The first few minutes are where the day's conviction level is revealed.

The auction-theory question to ask at every open is simple: where did price open relative to yesterday's value area, and did it accept or reject that location? The answer determines which of the four types you're seeing.

The Four Open Auction Types

1. Open Drive (OD)

Definition. Price opens with a clear directional commitment, takes out the previous bar's range immediately, and never trades back through the open. There is no "look-back" — the market doesn't test the prior day's value area at all.

What causes it. Strong overnight news, a clean technical breakout setup, or institutional positioning where one side has a much larger inventory imbalance to resolve.

What it predicts. Trend continuation. Open Drives are the most reliable directional opens — historically, the day's high or low is set in the first 15 minutes only ~25% of the time during an OD, meaning the move usually extends.

How to trade it. Don't fade. Wait for the first 5-15 minute pullback (usually shallow, often holding the half-back of the opening range) and join in the direction of the drive. Targets: extension of opening range, prior structural levels, ATR.

2. Open Test Drive (OTD)

Definition. Price opens, makes a small initial probe in one direction, briefly tests back through the open (often to the prior day's VAH or VAL), confirms support or resistance there, then drives in the original direction.

What causes it. A market that opens with conviction but checks the integrity of yesterday's value area before committing. Imagine a buyer who tests yesterday's high to confirm sellers have left, then loads up.

What it predicts. Trend continuation, but with a cleaner entry than OD. The test offers a textbook confluence trade — first test of value area extreme is high probability when it holds.

How to trade it. Wait for the test of VAH or VAL. Enter on the rejection candle with a stop just beyond the value area edge.

3. Open Rejection Reverse (ORR)

Definition. Price opens above VAH (or below VAL), fails to find acceptance there, and reverses back into the value area within the first 30-60 minutes. The session then auctions back through the opposite side of value.

What causes it. Overnight order flow ran ahead of fair value. When real trading hours begin, the absence of new buyers (or sellers) at the extreme sucks price back toward equilibrium.

What it predicts. Likely traversal to the opposite side of value. The 80% rule applies — if price re-enters value, it has roughly an 80% chance of reaching the other extreme of the prior day's value area.

How to trade it. Recognise the failure (a clean rejection candle at the extreme), wait for re-entry into VA, target POC and then the opposite VA edge.

4. Open Auction (OA)

Definition. Price opens within yesterday's value area and rotates without conviction. There is no immediate directional commitment — buyers and sellers are evenly matched at the open.

What causes it. Indecision. Markets that open inside value with no fresh information are essentially saying "yesterday's prices are still fair." Often seen on slow news days, ahead of major data releases, or late-week sessions.

What it predicts. Rotational, range-bound day with the prior value area as the framework. Initial Balance (first 60 minutes) usually holds.

How to trade it. Fade extremes. Sell into VAH, buy into VAL, target POC. Skip when range is too tight to be worth the slippage.

The Decision Tree

How TradingPit Detects Open Type Automatically

The Market Context panel calculates open type by comparing daily_open to yesterday's pd_vah and pd_val. The first version of the algorithm uses simple geometric position — if the open is above VAH and the current price is still above VAH, it's labelled Open Drive ↑; if the open was above VAH but price has fallen back inside, it's labelled Open Rejection Reverse.

For finer classification (separating OD from OTD), the panel inspects the first 15 minutes of bars to see if price tested back to the value area edge before drifting in the original direction. A test that holds = OTD. No test = OD.

Combining Open Type With Other Context

Open type is a directional bias, not a complete trade plan. It pairs powerfully with:

• Day type. An Open Drive on a forecast trend day is much higher conviction than an Open Drive on a low-ATR rotational day. See day types.
• VWAP. Open Drives that hold above session VWAP through the first hour rarely reverse intraday. See VWAP & standard deviations.
• Confluence. An OTD that tests back to a VAH that also coincides with weekly POC or daily SMA50 is one of the highest-edge entries available. See confluence.

Common Mistakes

1. Calling the type too early. Wait at least 15 minutes before classifying. The first 5 minutes are noise.
2. Fading an Open Drive. Statistically the most expensive mistake. Open Drives extend; they don't reverse without major news.
3. Trading an Open Auction with a directional bias. OA = rotational day. Sell highs, buy lows; don't try to break out.
4. Ignoring overnight context. The "open" for futures isn't 9:30 ET — the most useful open is the globex open at 18:00 ET prior day, where overnight inventory imbalances first surface.