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9/6/2021
Opening Range Breakout in Detail - Intraday Trading Course
Price Action How to Study Candlestick Candlestick Analysis Price Action Analysis Advanced Price Action Analysis Thrust Pullback and Measuring Move Analysis How to Trade with Smart Money Supply and Demand Zone Trading How to Day Trade with Trend Multiple Time Frame Analysis Head and Shoulder Pattern How to Trade with Support and Resistance Advanced Candlestick Analysis Trendline Trading Strategy WRB Trading Strategy Day Trading Strategies VWAP Trading Strategy Gap Trading Strategy Intraday Open High Open Low Trading Strategy PIN BAR Trading Strategy Trading with Sideways Price Action Area Pullback Trading Strategy Intraday Breakout Trading Strategy Risk Management 3 Techniques for Risk Management in Trading Stock Selection & Live Scanner How to make own Day Trading Scanner Stock Selection for Intraday Trading Intraday Trading Course 2020 Intraday Trading Course Multiple Timeframe Analysis for Intraday Trading VWAP Trading Opening Range Trading Strategy Opening Range Breakout Volume Price Action Analysis Volume Analysis in Trading Volume Price Action Analysis Volume Spread Analysis in Trading Candlestick Pattern Analysis Finding Entry Opportunity using Volume Spread Analysis Spring and Upthrust Trading Strategy VSA Trading Strategy Option Chain Analysis Option Chain Analysis Indicator https://dotnettutorials.net/lesson/opening-range-breakout/
Opening Range Breakout Back to: Trading with Smart Money
Opening Range Breakout In this article, I am going to discuss the Opening Range Breakout in detail. Please read our previous article where we discussed Opening Range Trading Strategy with examples. At the end of this article, you will understand the following pointers in detail.
1. What is the opening range? 2. What is opening range breakout? 3. Opening range breakout types 4. Breakout entry for volume and price action 5. After entry volume and price action What is the Opening Range (OR)? The Opening Range is the difference between the first high and low of the day. How to find high and low? At least one candle should be completely against the initial move
The benefits of Opening Range Breakout Trading 1/22
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RSI Trading Strategy
Opening Range Breakout in Detail - Intraday Trading Course
There are several benefits to trading breakouts. For example…
BTST
BTST Trading Strategy TECHNICAL ANALYSIS MASTERCLASS Technical Analysis Market Structure Understanding Market Structure through Swing Supply and Demand Trading (Part – 1) Supply and Demand Trading (Part – 2) Chart Patterns Top 7 Chart Patterns in Trading Every Trader Needs to Know How to Trade Bull Flag and Bear Flag Pattern How to Become a Successful Trader How to Become a Successful Trader
Momentum is with you – Trading breakouts allow you to enter your trade with momentum at your back Catch big trends – If you were to trade pullbacks, sometimes it may never come. But with breakouts, you never have to
worry about missing another move in the markets It gives us defined entry and exit (stop loss) points.
Demerit Opening Range Breakout Trading False breakout or smart money trap Maximum time breakout failed So breakout should be traded at a proper time. Here are two approaches to trading the breakout designed to minimize risk:
1. Buy the initial breakout when the conditions are right 2. Buy the retracement to the breakout when you need confirmation Tips:- When opening range is not clear, stay away from opening range trading market
Opening Range Breakout Note-Now onwards we will discuss only bullish breakout. Exact opposite for bear breakout
Opening Range Breakout players
1. professional 2. Those traders who have shorted the market will now be forced to cover their poor positions by buying as well. Short covering buy order above the opening range high
3. those traders not in the market may feel they are missing out and will be encouraged to start buying Principle for an opening range breakout Identify how much a stock retraces relative to how much initial move in the opening range. Pay attention to the reaction and how stocks tend to act during this period And the volume activity during the opening range period Based on the above three-pointers we have divided the opening range breakout into 3 types. These are
1. Opening range breakout 2. Opening range Accumulation breakout 3. Opening range Absorption breakout What is Opening Range Breakout? Opening Range Breakout means price moves below well-defined support (opening range low) or above resistance (opening range high)
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Logic Opening range breakout depends on open 3 factors
1. Strong initial move (1 or more than one candle) 2. Price consolidate at opening range high(Flat pullback) 3. An unusual volume in the opening range Strong initial move These are the directional move with smart money participation and conviction. If at the start of a trading session. An Open-Drive is generally caused by participants who have made their market decisions before the opening bell. The market opens and moves aggressively in one direction.
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Opening Range Breakout in Detail - Intraday Trading Course
Price consolidate AT opening range high In strong trending markets, you’ll have Flat pullback (price consolidates high of the day). That usually stock move in horizontal, low volatility trendless manner. Most of the trading is near one end of the range. A Structural Feature Sign of Strength Price holds gains after an up move “Eating through” residual supply OVERLAPPING BAR hugs the level. It shows his level is no longer a strong reference point, The price will move with the current pressure. If the level is strong then the price should react immediately retailer’s taking profit to reduce risk .market pulls back and goes sideways. Once bulls confident that the bears will fail to reverse the trend, bulls buy again with the tighter stop loss(if find this pattern find the middle of the trend) Price should above vwap Price should not break opening range high Price consolidate within a tight trading range
Volume Initial move volume should be clearly expansion than previous day volume
Why high volume on the initial move of the day? We are trying to identify what the SM sentiment is for the day? If Smart Money wants to buy stock, we would see that on the open with high volume and strong directional move.
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Opening Range Breakout in Detail - Intraday Trading Course
Rules for an opening range breakout
1. Wait for the first initial move to complete. should be a strong candle 2. Volume should be clearly expansion than the previous day 3. Price consolidating at a high of the day(flat pullback) 4. High of the opening range should not break 5. Declining or lower volume on retracement candle 6. The price must be above vwap 7. Entry above opening range high 8. Stop loss below opening range low
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Opening Range Breakout in Detail - Intraday Trading Course
BELOW ARE SOME MORE EXAMPLE GIVEN ANALYSIS YOURSELF
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Opening Range Breakout in Detail - Intraday Trading Course
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Opening Range Breakout in Detail - Intraday Trading Course
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Opening Range Breakout in Detail - Intraday Trading Course
Opening Range Accumulation Breakout Strategy logic The big institutions who move and manipulate the market build up their massive trading positions in a well-defined trading range. After they fully enter their positions, then they initiate strong and aggressive buying or selling activity to move the price. They strive to move the price in the direction of their newly accumulated positions. May be happen at opening range high or above the opening range https://dotnettutorials.net/lesson/opening-range-breakout/
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Opening Range Breakout in Detail - Intraday Trading Course
Characteristics of re-accumulation Immediate background must have strength. Strong move Re accumulation areas are generally in a well-defined range. Reaction volume remains low and volume increases at support Upthrust and spring can be appear Springs at lows are the best indications of ACCUMULATION. Failure of price to break support after basing above it Stronger BULL candles in the range Price Above vwap
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Opening Range Breakout in Detail - Intraday Trading Course
Opening range Absorption breakout
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Opening Range Breakout in Detail - Intraday Trading Course
Smart money observing supply at resistance. Means smart money observing supply coming from, long liquidation, profit-taking, and new short selling.
Characteristic of Opening range Absorption breakout Immediate background must have strength. Evidence of demand overcoming supply When viewed as a correction, absorption areas are generally shallow.. The main characteristic of BUYERS overcoming SELLERS is the repeated inability of prices to REACT away from opening range high. Reaction volume remains low rising supports and expanding volume on up‐swings AFTER upthrust(breakout failure), the price unable to move down and unable to break the last swing low
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Opening Range Breakout in Detail - Intraday Trading Course
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Opening Range Breakout in Detail - Intraday Trading Course
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After entry breakout candle Clean wide range candle close above the opening range high
Breakout volume Should be high or above high. Why?
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Opening Range Breakout in Detail - Intraday Trading Course
If you see high volume accompanying wide spreads up, this shows that the smart money was prepared to absorb any selling from those locked-in traders who decided to sell In this situation, the market-makers anticipate higher prices and are bullish. High volume breakout should follow through The danger signs to watch for at the breakout is the opposite price pattern. If the stock breaks out on good volume but immediately reverses and trades below the breakout point on continued big volume it means that there is too much supply at the new high price. This is a major warning sign. The big volume at the breakout will now represent significant resistance if the stock is below it. This pattern of a big-volume reversal at the top of the OR usually leads to a failed breakout and a selloff.
Average volume breakout Often the breakout will occur on light volume but as the stock climbs the volume will increase. This is also a positive sign.
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Opening Range Breakout in Detail - Intraday Trading Course
BREAK OUT NEEDS FOLLOW-THROUGH Why breakout needs follow-through? For confirmation for successful breakout Avoiding smart money trap (stop loss hunting)
Smart money trap
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Opening Range Breakout in Detail - Intraday Trading Course
Hunting the stops is a phrase that describes a situation where smart money pushes the stock to trade above (resistance) a certain price because they expect that there is a lot of resting orders to buy the stock if it trades above that particular level. The motive for doing this is that if the trader buys the stock to trigger an advance through the price then the flurry of stop orders will push the price even higher, at which point the trader would sell the stock to the stop orders being executed. If a breakout is created by a large number of stop orders being executed, the subsequent price action will usually be an immediate reversal back into the range. An immediate reversal is therefore a warning sign that the breakout is not going to be clean!
For confirmation for successful breakout Traders like to see a confirmation after the breakout. One more bullish candle after breakout candle. A bull break followed by a bull break is a sign of follow-through and thus an indication of bullish enthusiasm, for as long as it lasts.
If the price up to and the volume also high and also the price remains above its opening price after the early morning pullback, it is an excellent sign that the stock has further to go on the upside.
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Opening Range Breakout in Detail - Intraday Trading Course
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Please watch the following video if you want to learn and understand the Opening Range Breakout concept in a better way.
In the next article, we will discuss two more price action opening range entry. Here, in this article, I try to explain the Opening Range Breakout in detail. I hope you enjoy this article. Please join my Telegram Channel to learn more and clear your doubts. https://t.me/tradingwithsmartmoney.
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