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Opening Range Breakout (ORB)
Trade breakouts from the first 15-30 minutes of market open
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What Is This Strategy?
The ORB strategy trades breakouts from the high or low established in the first 15-30 minutes of market open. The opening range often sets the tone for the rest of the day.
How It Works
- Wait for the first 15-30 minutes of market to establish a range
- Mark the high and low of this opening range
- If price breaks above the high = Buy signal
- If price breaks below the low = Sell signal
- Use the opposite side of the range as stop-loss
Key Parameters
Opening Range Period
Time to establish range
Confirmation
Time outside range to confirm
When to Use
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Best For
- • High volatility mornings
- • After significant overnight news
- • Gap days
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Avoid When
- • Low volatility days
- • Narrow opening ranges
- • Federal Reserve announcement days
Risks & Limitations
warning
Be Aware
- • False breakouts common, especially before 10 AM
- • Wide ranges mean wide stops and larger risk
- • Market may chop in the range all day
Example Trade
Scenario
After earnings, NFLX opens and trades between $400-$410 for first 30 minutes. At 10:05 AM, it breaks above $410.
BUY
Reasoning
Confirmed breakout of opening range. Stop below $400, target 2x the range height.
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