Opening Range Breakouts Confirmed by Fair Value Gaps

Summary

This intraday setup combines a five-minute opening range breakout with a one-minute fair value gap condition during a specified session. It defines bullish and bearish gaps by comparing the current one-minute candle's high or low with the corresponding extreme from two candles earlier. A close beyond the locked opening range, a matching gap, and the session filter must align; the strategy then places a stop beyond the opposite range edge with a price buffer and sets a target using a risk-reward multiple. It also limits entries to one per day and sizes positions from a stated fraction of account equity and stop distance.

The text claims large reductions in false breakouts and high continuation rates, but gives no sample, trade count, equity curve, or supporting analysis for those figures. The published test uses ETH futures and five-minute bars, while the description emphasizes US stock opening hours and one-minute execution. The code's timeframe and session handling therefore need careful review before results can be interpreted. It cautions that choppy markets and major news can produce losses and that historical testing does not ensure future performance.

Key ideas

• A trade requires an opening range break, a directionally aligned fair value gap, and an allowed session.
• The opening range is set from the first five-minute bar, while gap checks use one-minute candles.
• Stops are placed beyond the opposite opening range boundary with a buffer, and targets use a risk-reward multiple.
• Position quantity is calculated from account equity risk and the distance to the stop.
• The document's performance claims lack supporting test details, and its described market differs from its published test instrument.

Tags

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