Opening Range Break

Discussion in 'Technical Analysis' started by DayTrader10, May 22, 2012.

  1. Anyone try to trade breakouts of the opening range in a stock for day trades?

    I am currently trying to backtest/look into this method more. So far I have found that the first 30 minutes can provide a potentially good indicator for the direction of the market once it breaks one of these levels (Opening range high or the Opening range low).

    Just wondering what everyone thinks of this study. Are pivot points "better"?
  2. simpleRT


    Opening range break is a lot more predictable in say the futures or the indices in my opinion... The market most days does a short 15-30 minute whipshaw in the morning then decides upon a direction for a couple hours or so. It decides that direction between 9:45 and 10:15 usually... If internals are trending hard out of the gate it can decide sooner.

    Stocks are unpredictable and unreliable... Some of the highly liquid ones like AAPL trade more like indices.

    I'm biased towards liking the bigger markets because I'm a futures trader... LoL!
  3. Yeah I agree with you on that. I am struggling to make my day trades consistently profitable since it is difficult to navigate through what appears to be noise. My swing account is a lot healthier.

    Right now I am trying to hammer down a statistical method with some decent Win/Loss ratios. I have so far found the break method really useful in trending, yet volatile, ETFs. It looks someone successful on the FAS and FAZ.
  4. drm7


    The ACD Thread on this forum is probably the best source for discussion of this strategy. It primarily uses Marc Fisher's interpretation of it, but is pretty wide-ranging (and civil, if you can believe that!)
  5. Interesting to elaborate?
  6. simpleRT


    Just look at an AAPL chart, toss up a few cyclic indicators and watch the price action. It doesn't do crazy stuff like snapping suddenly from different price level to different price level in a heartbeat.

    It flows and trends slowly and steadily like the indices do.

    Some stocks are like... BLAM 45... BLAM 35... BLAM 40... It's almost like they are just snapping to different support/resistance levels in minutes without any trend... Just spike moves. Low liquidity stocks behave like that a LOT.

  7. I don't look at a chart (or time frame based analysis) to analyze what the price does, so I will take your word for it.

    I will tell you that, since the topic was Opening Range Break, that there is quite a bit of difference in how AAPL reacts off the Open and how most indices act off the open.

    Just looking at how often (what % of the time) the Open is equal to the High or Low for the day will show you there's a difference.

    I would also suggest, using the Open as a stop-loss and see what happens in both instances. Maybe they aren't so similar in price action.

    Totally agree that Low volume / liquidity stocks are all over the place.
  8. Hey guys if you're interested in this method the ACD thread is great for it. I also found a pretty interesting blog on it...could show a decent set up/ strategy.

    I will check this out today. So far it gave me a good trade on the VIX.

    I think this method is fairly similar to ACD. Is it? I might pick up Mark Fisher's book for the hell of it.

    I think using multiple time frames in addition to Heiken Ashi could show relative strength or momentum or if the stock is going to reverse.

    EDIT: Instead of the fib lines for support as shown in the blog I posted, I am going to try pivot points.
  9. In regards to time frames:

  10. While I do not have any personal experience using Fisher's methodology there are quite a few serious traders who rave about it. By all accounts he is a serious guy who has written well about how to execute.

    I am also told he is as nice a guy as you will find. Always good to hear about someone with his success.

    #10     May 24, 2012