What a Buy-at-Open, Sell-at-Close Test Says About Candle Direction

Summary

This minimal strategy enters a long position at the start of a bar when flat and closes it once the bar is confirmed. The accompanying explanation uses this repeated open-to-close trade to illustrate that a candle’s direction is close to an even-odds prediction problem. It argues that a trader’s profitability depends not only on how often the candle closes higher, but also on the size of gains and losses across the traded bars. The same framing is extended to bets on the next candle’s direction in prediction markets.

The script is a teaching example rather than a complete trading system: it specifies no asset, timeframe, transaction costs, position sizing, or performance results. Consequently, the roughly even odds claim is presented as a general intuition, not demonstrated by a reported sample or test. Real outcomes can depend on the market, sampling interval, execution price, and costs, and near-even directional accuracy alone does not establish whether a strategy has positive expected returns.

Key ideas

• The example opens a long position at each new bar when no position is open.
• It closes the position when the bar is confirmed.
• Directional win frequency alone does not determine profitability; the size of gains and losses also matters.
• The document provides no test results or market-specific evidence for its near-even-odds claim.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.