Opening Range Breakout Scalp

[Somebeetch]

Looking at the idea of scalping a 5 minute opening range breakout, placing a buy stop just above the 5 min high of day entering a long trade, or a sell stop just below the 5 min low of day entering a short trade.

The trade would be managed with a profit target of 1% and a 1% stop loss. Particularly looking at stocks under $10, with high avg volume and volatility.

Has anyone tried this, could this strategy be profitable? If so, which timeframe would you suggest, 5,15,30 min range? Thanks in advance, any advice appreciated.

 

[algofy]

Looking at the idea of scalping a 5 minute opening range breakout, placing a buy stop just above the 5 min high of day entering a long trade, or a sell stop just below the 5 min low of day entering a short trade.

The trade would be managed with a profit target of 1% and a 1% stop loss. Particularly looking at stocks under $10, with high avg volume and volatility.

Has anyone tried this, could this strategy be profitable? If so, which timeframe would you suggest, 5,15,30 min range? Thanks in advance, any advice appreciated.

This is an easy strategy to pull out the charts and test. Do the work man, nobody here is gonna do the work for you.

 

[wrbtrader]

The last person that backtested this here at ET said it only took him a few minutes to setup his code to test this. I think he did this on TradeStation and TOS.

 

[SteveM]

Looking at the idea of scalping a 5 minute opening range breakout, placing a buy stop just above the 5 min high of day entering a long trade, or a sell stop just below the 5 min low of day entering a short trade.

The trade would be managed with a profit target of 1% and a 1% stop loss.

You are going to have to do some testing to see what parameters work for what you are suggesting (most parameters will result in a losing strategy).

As someone who has tested similar concepts myself, I'd recommend you set your profit targets at 2x risk (2x opening range width) rather than 1%......also, you should have some cutoffs to eliminate wide opening ranges, as it will be more difficult to reach your 2x target if 2x equates to 30 points in the Emini. Also, you'll find that if your first 5M bar of the day is a huge doji bar, then a breakout above or below has a greater chance of failing. In the stock indices futures, I think you'd actually probably wind up making more money if you only took reversal signals (i.e., bar 1 is a bear bar, bar 2 breaks below it by 2 ticks (ignore) and then reverses up and breaks above the high - get long.) Good luck.

 

[Spectre2007]

Think of the first few weeks in any futures contract as the 'opening range'.. and trade accordingly. Which futures mean revert over months and which futures trend for months.

 

[comagnum]

The ORB is one of the oldest setups used back in the day, now typically used by novice traders - a very crowded setup. You should expects a lot of slippage at the start of the day. Directional moves may occur only 10% of the time. Most days, 70% to 80%, prices exhibit rotation or choppy action and the first five to 10 minutes of trading are sluggish and directionless without a clear movement away from the opening range.

I would suggest look into adding in a few more filters if you expect to get 1% profit on a 5 min ORB. This is an example I made up on the fly to illustrate what I am talking about. It looks for stocks that went from recent contraction to expansion with volume confirming the move and the players that buy on opens from the higher time frames involved in the auction. Even than the trade needs a risk/reward of at least 1:3 with good risk mgmt.

volume is 175% above 500 bar avg
previous 4-7 days were inside days (NR4-7)
Open price takes out previous week high/low
Open bars 30% wider than xx bar avg & close with 15% of bar high/low

Don't forget to look at the chart for major resistance within your 1% target- you need a clear rocket launching pad.

http://www.trading-naked.com/library/[Trading]-Stocks-&-Commodities-Toby-Crabel-ORB-articles.pdf

 

[lawrence-lugar]

Looking at the idea

The trade would be managed with a profit target of 1% and a 1% stop loss

Has anyone tried this,
could this strategy be profitable

Fail -- because Risk vs Reward ...is equal
You will be a rat in a tornado,

You have to rethink the overall whole picture, and put all the variables and your skill into the picture as well.

Alot of new traders are happy to be just a weasel and collect whatever small wins they can accrue here and there...but that strategy will only last so long, before a wave too big to surf comes along,

 

[Autospreader]

Looking at the idea of scalping a 5 minute opening range breakout, placing a buy stop just above the 5 min high of day entering a long trade, or a sell stop just below the 5 min low of day entering a short trade.

The trade would be managed with a profit target of 1% and a 1% stop loss. Particularly looking at stocks under $10, with high avg volume and volatility.

Has anyone tried this, could this strategy be profitable? If so, which timeframe would you suggest, 5,15,30 min range? Thanks in advance, any advice appreciated.

Google Opening range breakout there are a few good thesis papers on this strategy that will help your endeavor

 

[easymon1]

Looking at the idea of scalping a 5 minute opening range breakout

https://www.netpicks.com/5-minute-orb/