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    Opening Range Breakout Trading Strategy

    Uploaded by

    amveryhot09
    Opening Range Breakout (ORB) is a trading system that attempts to capture gains when a stock moves above or below the high and low prices set within the first 30 minutes of trading. The system uses 5-minute candles and moving averages to determine entry and exit points, with a goal of taking partial profits early and letting runners benefit from trends. Rules for the system include confirming volume and indicators, respecting support/resistance, and using the 20-period EMA for trailing stops and determining when to exit positions fully. Adhering closely to the rules is emphasized for increasing success rates when applying this intraday trading strategy.

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    © All Rights Reserved
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    Opening Range Breakout Trading Strategy

    Uploaded by

    amveryhot09
    5K views3 pages
    Opening Range Breakout (ORB) is a trading system that attempts to capture gains when a stock moves above or below the high and low prices set within the first 30 minutes of trading. The system uses 5-minute candles and moving averages to determine entry and exit points, with a goal of taking partial profits early and letting runners benefit from trends. Rules for the system include confirming volume and indicators, respecting support/resistance, and using the 20-period EMA for trailing stops and determining when to exit positions fully. Adhering closely to the rules is emphasized for increasing success rates when applying this intraday trading strategy.

    Original Description:

    Intraday Strategy

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    Opening Range Breakout (ORB) is a trading system that attempts to capture gains when a stock moves above or below the high and low prices set within the first 30 minutes of trading. The system uses 5-minute candles and moving averages to determine entry and exit points, with a goal of taking partial profits early and letting runners benefit from trends. Rules for the system include confirming volume and indicators, respecting support/resistance, and using the 20-period EMA for trailing stops and determining when to exit positions fully. Adhering closely to the rules is emphasized for increasing success rates when applying this intraday trading strategy.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    5K views3 pages

    Opening Range Breakout Trading Strategy

    Uploaded by

    amveryhot09
    Opening Range Breakout (ORB) is a trading system that attempts to capture gains when a stock moves above or below the high and low prices set within the first 30 minutes of trading. The system uses 5-minute candles and moving averages to determine entry and exit points, with a goal of taking partial profits early and letting runners benefit from trends. Rules for the system include confirming volume and indicators, respecting support/resistance, and using the 20-period EMA for trailing stops and determining when to exit positions fully. Adhering closely to the rules is emphasized for increasing success rates when applying this intraday trading strategy.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    The document describes an Opening Range Breakout (ORB) trading system that can deliver high accuracy if strict rules are followed and market conditions are assessed properly.

    The ORB system looks to enter trades when the stock price moves above or below the high and low prices set in the first 30 minutes of trading each day.

    General rules include using a 5 minute chart with 5EMA and 20EMA, entering on a close outside the opening range, keeping the stop loss at 20EMA, and booking partial profits as the trade moves in your favor.

    Opening Range Breakout (ORB) is a commonly used trading system by

    professional and amateur traders alike and has the potential to deliver high
    accuracy if done with optimal usage of indicators, strict rules and good
    assessment of overall market mood. This system is applicable only for intraday
    trading.
    ORB trading has several variations practiced by traders all over the globe. Some
    traders trade on a significant breakout from opening range, while others trade
    immediately on opening range breakout. Time window for the trades also varies
    from 30 minutes to 3 hours.
    Over a period of time observing and trading Indian markets, I have devised with
    the below system suiting our markets. Below method is both a scalping and a
    trending system combined into one, hence it is possible to take the advantage of
    quick moves and trending markets with multiple lots of trades.
    Trading Strategy
    Quite Simple and straightforward. Rules in the next section needs to be adhered
    to increase the success rates dramatically.
    Any stock creates a range in the first 30 minutes of trading in a day. This is
    calling Opening Range. The highs and lows of this timeframe is taken as support
    and resistance.
    1. Buy when the stock moves above the Opening Range high.
    2. Sell when the stock moves below the Opening Range low.
    PLEASE NOTE THAT THE ABOVE SYSTEM IS GENERIC, THE RULES BELOW WILL
    MAKE IT A SPECIFIC SYSTEM. IF YOU ARE FOLLOWING THIS SYSTEM, PLEASE
    FOLLOW ALL THE RULES FOR BUY / SELL STRICTLY.
    General Rules Applicable for both Buy and Sell:
    Opening range is defined by the high and low made in the first 30 minutes.
    5 min chart with 5 EMA and 20 EMA used for making trading decisions.
    Entry should be made only on close of the 5 min candle outside the opening
    range.
    20 EMA is one of the key technical indicators used in this system for trend
    trading. Stop loss is always kept at 20 EMA for riding the profits.
    Volume confirmation Breakout candle should show increase in volume.
    Optional confirmation- One of the two indicators - MACD or Stochastics should be
    favorable for the trade. (We have four indicators in Simplified Technical Analysis Moving Averages, RSI, MACD, Stochastics. The idea here is at least two indicators
    should confirm the trade.).
    This is purely optional condition to enter trade.

    Respect support and resistance levels. Do not buy just below a resistance
    or sell just above a support.

    Always trade with 2 lots and book 50% as soon as you see few points
    profit. Second lot will be used for taking advantage of days trend.

    Rules for Buy

    Stock should be trading above the 20 EMA line before the breakout.

    Buy when the 5 minutes candle closes above the opening range.

    5 EMA line should be above the opening range at the time of breakout.

    Where to keep Stoploss


    Initial Stoploss Low of the Opening Range.
    Trailing Stoploss - As the stock moves in your direction and you are in profits,
    book 50% , trail the stoploss at 20 EMA. A close of 5 min candle below 20 EMA
    confirms exit.
    When to book full profits
    When the 5 min candle closes below the 20 EMA in the case of longs.
    Rules for Sell

    Stock should be trading below the 20 EMA line before the breakdown.

    Sell when the 5 minute candle closes below the opening range.

    5 EMA line should be below the opening range at the time of breakout

    Where to keep Stoploss


    Initial Stoploss High of the Opening Range.
    Trailing Stoploss - As the stock moves in your direction and you are in profits,
    book 50% , trail the stoploss at 20 EMA. A close of 5 min candle above 20 EMA
    confirms exit.
    When to book full profits
    When the 5 min candle closes above the 20 EMA.
    High Probability Trade Setups
    Below additional conditions will give high probability of success:

    The Opening Range breakout is above previous days high for buy.

    The Opening Range breakout is below previous days low for sell.

    Trade is in the direction of higher time frame charts (15 min /30 min).

    Overall Market is moving in the direction of the trade.

    Opening range breakout happens after brief period of consolidation.

    Important Additional Points

    If the opening range is too wide, better do not trade ORB, since the SLs
    will be very far in our system. You can use other trading systems in such a
    case

    Avoid Opening Range Breakout trades in case of a heavy news flow day.
    ( Like Inflation, Manufacturing, Policy decisions etc.). Use other trading
    systems once the market settles down after the news.

    TODO:
    1.KeepPivotpointsreadyonCharts.DailyPivotson5MinCharts,WeeklyPivotson
    30Mincharts,MonthlyPivotsonDailyCharts.
    2.ForNifty&BankNiftyTradeUseORB,withOptions.
    3.ForIntradayTradeuseMACDScanner&TenkanSen&Kijunsenscanner.
    4.ForPositionalTradeUseWeeklyPivotBUYSell&YORKERSignal.
    5.

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