The opening range breakout (ORB) is a well-established trading strategy for stock day traders.
This post details observations while trading the ORB on short-term time frames such as 1-minute, 5-minute, and 15-minute price charts.
There are various definitions of what the opening range means, but the most common is that it refers to the gap between the low and high price of the first 30 minutes of trading.
During this time, the range might expand, but that’s ok; what matters is what the highest and lowest prices are at the 30-minute mark.
You must alter the position size to match the range of your reference candle. As a result, each trade has the same risk.
The goal is to normalize the trader’s risk on each trade, so trading a high-price stock is no riskier than a low-priced stock.
There are three things the trader can do. - Fixed Risk, Fixed Target - Fixed Target, Trailing Ris - Fixed Risk, No Target