When you want to profit from regular, minor price movements, intraday trading strategies are important.
In-depth technical research, which employs charts, indicators, and patterns to forecast potential market changes, is the foundation of a consistent, effective intraday trading strategy.
This post will walk you through all of the important aspects of intraday trading strategies.
You will learn –
- ORB Intraday Trading Strategy
ORB Intraday Trading Strategy
The ORB or opening range breakout trading strategy has gained a lot of popularity among traders.
This is due to the fact that it allows you to make fast profits.
Traders just love this technique.
Furthermore, this intraday trading strategy allows you to make money easily regardless of whether the market is bullish or bearish.
Toby Crabel is known for creating the ORB trading strategy.
Opening Range Breakout (ORB) is a common intraday trading strategy for both experienced and novice traders.
This trading strategy offers high accuracy when used with other indicators, discipline, and a strong understanding of the overall market trend.
Only intraday trading is possible with this method.
Traders all over the world use ORB trading in a variety of ways.
Some traders wait for a substantial breakout from the opening range before trading, while others trade right away.
- To begin, you must determine the time frame to trade an opening range.
- Traders use a variety of time frames, such as 5 minutes, 15 minutes, 30 minutes, and so on.
- Second, you must plot the high and low points in the range for a certain stock or index.
As a consequence, I prefer to use a 15 minutes period as an opening range.
Furthermore, Don’t trade for the day if the market opens with a large gap up or gap down.
Opening Range Breakout Trading Methodology
The high and low points made during the first 15 minutes session described as an opening range.
This highs and lows are used as support and resistance.
- Buy as the stock rises above the high of the Opening Range.
- Sell if the stock falls below the Low of the Opening Range.
For more accuracy, we will use 5 minute timeframe with 8 EMA & 21 MA.
You have to plot 2 MAs on chart. One is 8 EMA and Second is 21 MA.
When the stock trading below 21 MA, it’s considered as a bearish trade while trading above 8 EMA treated as a bullish trade.
You can also trade on 8 EMA and 21 MA crossover. Red line above on the chart represents 21 MA and green line represents 8 EMA.
When green line crosses up red line – you can initiate a long position and vice versa.
We will use another indicator for trailing our stop-loss.
Stop-loss can be trailed using the parabolic SAR indicator.
Move the stop-loss to balance the parabolic SAR signal while a stock is rising.
A short trade follows the same logic: when the price decreases, so does the indicator.
After each signal, trail the stop-loss and ride the trend.
Traders can quickly determine when a trend ends, as well as identify new ones.
This is where the parabolic SAR comes in, since it can detect when a trend is about to end.
The Parabolic SAR Indicator is extremely simple to use.
While the dots are under the candles, a buy signal is indicated, and when they are above the candles, a sale signal is indicated.
This measure is simple to grasp and analyse since it forecasts when the price will rise or fall.
The market’s opening hours are the most important.
If the opening range is too wide, avoid trading opening range breakout because the Stops would be far out in the trading range.
ORB should be avoided during high volatile sessions.
By signaling an exact entry point, the opening range breakout aids in the development of a solid trading strategy.