Opening Range Breakout Strategy for Beginners

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.

After the opening bell, stock trading usually sees some of the most significant price swings of the day.

The Opening Range

It’s not unusual for the first 30 minutes of trading set the tone for the rest of the session, determining whether it will be volatile with high volume or sedate with low volume.

The Opening Range

Trading a specific number of shares or a fixed dollar amount makes little sense when trading the opening range breakout.

Position Sizing

Instead, you must alter the position size to match the range of your reference candle.

Position Sizing

The use of a fixed risk and fixed target simplifies trade management. You place your stop-loss one tick below the opening range breakout low and leave it there.

Fixed Risk, Fixed Target

The number of shares traded remains unchanged and is determined using the reference candle’s Open, High, Low, and Close (OHLC).

Fixed Target, Trailing Risk