Opening Range Breakout (ORB) is a commonly used as an intraday trading systems.
Trading Strategy
Any stock creates a range in the first 15 minutes of trading in a day. This is calling Opening Range. The highs and lows of this time frame is taken as entry and exit parameters.
1. Buy when the stock moves above the Opening Range high. 2. Sell when the stock moves below the Opening Range low.
We generally apply it over Nifty50 Index.
Example:
Nifty50 opens at 13500 and in 15 minutes minimum(low) value is 13450 and maximum(high) value is 13550. The ORB range becomes 13450 to 13550.
Rules for Buy
Buy when the stock price crosses above the opening range
Initial Stop loss — Low of the Opening Range.
Rules for Sell
Sell when the stock price crosses below the opening range.
Initial Stop loss — High of the Opening Range.