Scanning through stocks on a 5 min chart for the past few days, it seems that all the best performing stocks all have a nice clean break from an opening range based upon closing prices of bars in say the first 20 mins or so. (takes out the noise...) Does anyone have any experience of using this kind of strategy with stocks? - I've used various versions of it with futures but not stocks. Any thoughts? best regards Natalie Added - I should say that goes for both long and short sides...
I have tried trading opening ranges many times, but I found a break of previous days hi/lo the best strategy. But I like to trade as early as possible. You are right, if the break is after the first 5 but before the first half hour of trading has ended, the probability of succes is very good. I have been trading this method from may of this year and it has been very good, even in these hard to trade months. Combined with a strict exit strategy it has been doing great even in these not so volatile times.
hmmmmmm - thank you - I'll look at that. I think a nice spread sheet should do the job for figuring out the probablity and parameters on it... ho hum - more work - something else to add to the list...! LOL Thanks again Natalie
I would be interested to know what you find. The only thing I ever tested is: would it be profitable to enter on the break of hi/lo and exit on close of day. Hitrate was pretty good (no extra filters, stop below yesterdays low) and overall expectancy was pretty positive. So I thought i might improve with an intraday trailing technique. So far it has been very good
Talk about keeping it simple, that is deffinitely as simple as it gets! The most amazing thing is sometimes the very simplest of things can be so incredibly powerful can't they Best Natalie
Absolutely, but its just like losing weight. You know what you need to do, its actually pretty simple, but the trick is to keep doing it...
I had to temporarily abandon the ORB approach when ranges contracted so badly. Nonetheless, I've found certain elements of Mike's approach to continue to be valid, such as using the daily range as a target, though I've had to make some modifications due to the lack of "steam". Since the ORB is so obvious, and since just getting to the OR can take so much energy, you may want to look at a swing-point BO strategy, using either trendlines or MAs to determine whether or not there is enough of a trend in place to make the BO a higher probability entry. And there is a continued necessity for at least a couple of reversal strategies to go along with the BO strategy, whatever you choose, if for no other reason than to give yourself an alternate exit point.
i do occasionally listen to the ORB, but never trade while they are playing. http://www.amazon.com/exec/obidos/A...2725907/sr=2-2/ref=sr_2_2/002-3019820-1045665