Intraday trading is such a field where the opening hour is the most active and dynamic. Here, traders can make money quickly but at high risk. Opening Range Breakout strategy is a setup for intraday. The strategy is highly effective on the first 30 min or 1 hour of trading. This article will define the complete detail of the Opening Range Breakout Strategy along with the steps to apply.
What is Opening Range?
Usually, after the opening bell, in the first 30 min considers as the biggest price movement period. In order to find out the opening range, the first 15-30 min high-low price has to be calculated. Monitoring the normal candlestick can give you the best result in determining the opening range.
Opening Range Breakout Strategy
The breakout strategy is quite simple. When the price of a stock cross 15-30 min opening range, it considers as opening range breakout. Based on the breakout pattern, it can be figured out that the bullish or bearish trend. One of the best thing about the trade that the entry-exit point is easily identifiable. The concept was developed by Toby Crabel.
Opening Range Calculator
First, you need to calculate the opening range by using the high and low of the first 15-30 min candle. After that monitor the price and breakout pattern. There is a detail discussion on the opening range calculator. If you are interested, you may go through our site for the content.
Features of Opening Range Breakout Strategy
- Best time to calculate the opening range is 5 min, 15 min, and 30 min after the opening bell of the market.
- Put stop loss-target as per the range.
- Range breakout doesn’t define the trend. Traders need to analyze properly to identify the trade.
Opening Range Breakout (ORB) is most commonly used trading pattern by professional as well as amateur traders. It has the potential to deliver high accuracy if done with optimal usage of indicators, strict rules and a good assessment of the overall market trend. This system is highly applicable for intraday trading.
Ankita is a graduate in English language and she has also done her MBA from the Calcutta University. She has a high knack in the stock markets. An experienced stock market content writer Ankita is also trading on her own account. Ankita is also preparing for the NISM Research Analyst Series XV examination seriously.