Opening Range Breakout, Trap, and Reversal Entries

Summary

This intraday framework marks the high and low of the first five-minute US session candle, then looks for trades on a one-minute chart during the next hour. It describes three entry patterns: a range break associated with a fair value gap, a breakout that retests inside the range before closing outside again, and a reversal after a failed break accompanied by an opposite fair value gap. Stops are placed using the relevant pattern candles, and targets use a fixed two-to-one reward-to-risk ratio. Position size may be based on risk percentage or a fixed quantity.

The document explains rules and implementation options, including a holiday blackout and switches for enabling entry types, but supplies no performance statistics. It identifies false breaks, unsuitable opening-range width, dependence on gap definitions, and the narrow trading window as limitations. The method is specific to the US open and one-minute execution; claims of effectiveness need testing across instruments and market conditions.

Key ideas

• The high and low of the first five-minute session candle define the opening range.
• The system uses breakout, retest trap, and failed-break reversal patterns for entries.
• Stops depend on the candle structure associated with each setup, while targets use a fixed two-to-one ratio.
• Trading is limited to the first hour after the US open, with optional entry modes and position-sizing methods.
• The document provides strategy rules but no performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.