The whole idea is from Toby Crabel. He wrote a series of articles entitled "Playing the opening range breakout" in Stocks and Commodities Magazine. These later became a book that is no longer in print. The articles however can be found on the internet. I would highly recommend that anyone interested in the opening range breakout read these articles. (just google)
By way of futher explaination......I let 5 minutes go by........I note the high and low of the first 5 minutes......if it's going up I place a buy stop 1 tick above the high of the first 5 minutes. If price exceeds the first 5 minute bar I will get taken into the market. Right now I am working on a scalping strategy that has a 10 point target on the YM.....I may have to scale this back a couple of points....but it worked great today! (see previous chart #1323) You may have to experiment with your targets and stops. Some traders may be able to stay with these trades longer if they are not scalpers.
All I can tell you is to go back and do historical research and see how far price usually goes once it exceeds the first 5 minute bar......use this for your target. Try different risk/reward ratios and see what works the best. Check the winning percentage for your targets and see how that works with your r/r.
With the way I was approaching it I had a 77% winning rate with a 23% breakeven with no losing days in the last 27 trading days. I can live with that.
But the thing to do is go to the master....Toby Crabel. READ THOSE ARTICLES.
The following 3 users say Thank You to Jeff Castille for this post:
I like this indicator you mentioned in post 16 of this thread (Colored_MAs_by_slope) in that it differentiates the steepness of the slope. It is available from Greattradingsystems.com in the Ninja tab. I would like to see this same indicator with a Hull MA instead of the Simple MA. I am looking for a set of indicators to build a strategy.
Have you done any mod's to indicators like this?
Hey Jeff, one thing that I find helps in quickly determining break outs of a "Time Bound Range" on those charts that I'm NOT using a 5 minute view is this Hi/Lo indicator attached. It is real easy to set up and quickly points out on your chart the Hi/Lo bracket for the time set, in this case (9:30-9:35).
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I too have confirmed that it is not uncommon for a failed break to one side of the bracket to eventually lead to a successful break of the OTHER END of the bracket. In addition, this concept can also work around other critical time brackets such as just after cash close (4:00-4:05). While the moves are not always as dramatic as the opening 5 minutes they still present some level of opportunity.
Last edited by HJay; October 17th, 2009 at 05:21 AM.
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You have just entered MA Slope heaven....... We have been exploring possible uses for moving average slopes on this thread for quite a while now. In addition to the many choices of sloped moving averages in the free download area there are a couple of interest in the VIP area as well. (TEMA Dots and JeffsDots)
Please keep us updated on your strategies progress.