Does Opening range breakout still work ?

Quote from panzerman:

If there is a pattern or an indicator that worked 300 years ago, it will work today. This is because markets move as the result of human behavior and motives, which have never changed. If it didn't work then, it won't work today.
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I don't totally agree, some things change, for example 24 hr markets and information flowing faster changes things. Before only professional trades could get 24 hr finanical news ,now everyone can.

Remember the markets goal is to take money from the masses and give it to a few. Changes like this will effect some patterns, but maybe not others. The goal of the market will never change, because that human behavior , how we get there might.
 
Read "The Logical Trader" by Fisher....the whole book is basically about OR breakouts on various timeframes. He also has the first chapter free online (on his website), google for it. Its a very good book (its not a pure mechanical system though)...i think its more or less something you should use or incorporate into a system you already have.

Another simple OR strategy (that i learned a few years back) is to value the OR's for the daily, weekly, monthly, and yearly....Then to use all those levels as entry/exit/stoploss points. And to value each OR against the others to give you setups....For example, if the Daily OR is higher than the Weekly, but lower than the Monthly you may do something like (1) buy when price is above the daily, with a stop under the daily OR, price target at the monthly; (2) buy any dip below the Daily (but above the weekly) with a stop loss just under the Weekly OR, targets above the Daily, or add to the position with a break above the daily; (3) or short a rally up to the Monthly, with a tight stop above the Monthly OR, target Daily or Weekly, ect...Also, these OR's should be a range, not just one price....for example, I use a 15 minute OR for the Euro (using the London open)....so the OR is usually a range of about 10-15 ticks. I've also noticed that if a lot of OR's are clustered together, your going to get a lot of chop and a small range bound market (market profile whould pretty much classify it as a "value area")....you then usually get a big trending move a few sessions later.

Combining this info with the daily Logical Trader (ACD Levels) you can really weed out the bad trades; meaning you may want to pass on a daily "Aup" setup if the Weekly, monthly, or yearly OR is above the market....you may, instead, look for a "failed "Aup" with stop loss past the larger timeframe OR above the market that you may consider to be resistance.
 
Quote from JaiSreeram:

Can someone , give me a overview of opening range breakout and some insight about whether it is still effective?
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The only thing that really works is a comprehensive methodology, played from Open to EOD, which crushes the juice out of the days upswings & downswings as they follow each other. It isn't done by most other independent traders who prefer to do other things.

But put another way, if you're going to go to war, do you just want to try and take out a couple of tanks before scurrying away or do you want to take the only challenge that gets you to where you need to go by winning the war every day you play? You go in at the Open, clear the battlefield continuously as you go, and savour each days unconditional victory as you check out at EOD.
 
I think a few minutes backtesting will confirm that a simple OR breakout system will not work, at least not on the S&P/ES. That said, the OR is an important concept in trading. Fisher's book is a good start.
 
Quote from AAAintheBeltway:

I think a few minutes backtesting will confirm that a simple OR breakout system will not work, at least not on the S&P/ES. That said, the OR is an important concept in trading. Fisher's book is a good start.
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Totally agree. I finally got around to reading Crabel's book. The original ideas along with Fisher are basically a way of framing price action for the day, not some simple "buy/sell above/below the first N minutes." Interesting ideas that can be incorporated into your strategy if you spend the time to find the patterns in price action. If you don't spend the time to train your brain to find and exploit the patterns then candles, pivots, ORB, market profile, technical patterns, ect will appear to not work. IMO all these ideas are simply a way of filtering out noise/trades and framing the tape/price action so that you dont drown in all the information the market is giving.
 
I bought the articles from Technical Analysis of stocks and commodities by Crabel. I see narrow range days are important in Crabel's analysis.
Please comment ,"Are narrow range days still effective?"
 
Quote from JaiSreeram:

Can someone , give me a overview of opening range breakout and some insight about whether it is still effective?
More...

It tends to work best on a large gap after a period of declining volatility.
 
When you ask if still work, I have to laugh markets are always
changing but when you really study T.A. you will see that methods that worked 100 years ago still work today

Like Tape Reading, Wedges and Bear Flags to mention a few what I am saying is there is little new in this biz.

I have a few things I have made that are new to T.A only because the studies they are based on did not exist years ago.

But to answer your question, YES WORKS MORE THAN NOT



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Take Care,

Joe Baker
 
The intra-day opening range stuff is interesting but I have a job so I wanted to trade Larry Williams type opening range breakout patterns for example , buying 30% of the range above tomorrow open. What software should I used to trade these. Is TradersStudio good for this ?
 
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