I am a rule-based intraday and a passionate trainer trying to help budding traders to find their trading edge. Trained over 500+ traders in online and classroom programs. I believe a disciplined mindset and impeccable execution are the holy grail of trading.
 

I have been actively investing and trading in Indian markets since 2013. I use price action, market profile and options delta neutral concepts to analyze and opt for my intraday and swing trades.

I have published my book MASTERMIND OF DAY TRADING, which talks about how to succeed in day trading by adopting rule-based techniques of market profile, price action and money management.

Apart from trading and training, I also write blogs and actively answer the questions on trading and investing in my Quora profile.

  • Nataraj Malavade

Does Opening Range Breakout (ORB trading) strategy still work?


Having worked on many trading strategies, especially on #intraday trading, I can undoubtedly say that OPENING RANGE BREAKOUT or an ORB strategy is the method that is valid in this technology-driven markets. Let me describe the fundamentals of ORB.

ORB (Opening Range Breakout):


A saying says, "amateurs open the market, and professionals close the market."


I was not sure about this statement until I worked on the Open range Breakout concept.


ORB is a commonly used strategy among the intraday trading community. TOBY CRABLE is the one who discovered it. It is the most candid yet robust intraday strategy I have seen so far.


ORB trading has many adjustments, followed by traders all over the globe. Some traders trade close above or below the opening range, while others trade immediately on opening range breakout. The trader's initial time window also varies from 5 minutes to 4 hours.

In this blog, I will compare different variations of ORB strategy with a few simple rules. And I will apply these rules on BANKNIFTY, a highly volatile index in the Indian market. (Note: I have used AMIBROKER to develop & Backtesting the strategy. To learn more about Amibroker, Click here )


Common Parameters Used:

Quantities Traded per trade = 50(2 lots) EOD Square off time = 03:20PM Initial Capital = 3 Lakhs Rupees. Backtested Period = 2009 - 2020

Method - 01:


Entry Rule = Breakout of first 30 min Range with one trade limit for the day. Stop-loss Rule = 1% from the entry price. Exit Rule = Either the stop loss trigger or EOD exit.


ORB Method - 01 Backtested details.

Method- 02:


Entry Rule = Breakout of first First Hour Range with one trade limit for the day. Stop-loss Rule = 1% from the entry price. Exit Rule = Either the stop loss trigger or EOD exit.


ORB Method - 02 Backtested results.

Method - 03:


Entry Rule = Breakout of first First Two Hours Range with one trade limit for the day. Stop-loss Rule = 1% from the entry price. Exit Rule = Either the stop loss trigger or EOD exit.



Method - 04:


Entry Rule = Breakout of first First Three Hours Range with one trade limit for the day. Stop-loss Rule = 1% from the entry price. Exit Rule = Either the stop loss trigger or EOD exit.



Final thoughts,


Well, I have shown four combinations here. Like this, many variations can be tried with the help of the #MarketProfile & Price Action Concepts. And also, the combination of the trailing stop loss is the added benefit to this strategy. You can also read the book Mastermind of Day Trading to explore many such objective approaches and also check out our online courses on rule-based trading at tradingwithnataraj.com. With proper position sizing and discipline, one can do wonders using simple strategies like ORB. There is nothing called right or wrong here; the only factor differentiating the Beginner & PRO is impeccable EXECUTION.


"EXECUTION IS THE REAL HOLY GRAIL."


I hope this blog will help you. If you like the content, hit the like button and share it with your trading friends.


If you have any questions, kindly post them in the comment :)


Happy Trading 😎


Wishing you most and more,

Nataraj Malavade

Twitter:https://buff.ly/39LmQqD | YouTube: https://buff.ly/36Ht2hD | Blog:https://buff.ly/33LZZYm | Book:https://buff.ly/2RR4UAU | Online Courses:https://buff.ly/2Kywmmm | Quora:https://buff.ly/3qrluY0



Samantha
May

Marketing Executive

MASTERMIND OF DAY TRADING explains the rule-based ideas of market profile, price action, and various money management topics, especially for intraday trading. How to make Money with breakout trading is a part of price action lesson that discusses how to Make Money with trading the candlestick charts and trading the price action trends.