Opening Range Breakout Strategy

February 2026 • 12 min read

The Opening Range Breakout is one of the oldest and most reliable trading strategies in existence. Professional traders have used it for decades because it works—and it keeps working because it's based on fundamental market psychology, not a temporary edge that gets arbitraged away.

What Is the Opening Range?

The opening range is simply the high and low price established during a specific period after the market opens. Most commonly, traders use:

• 5-minute ORB: Fast, more signals, more noise
• 15-minute ORB: The sweet spot for most traders
• 30-minute ORB: Fewer signals, cleaner moves
• First hour ORB: Most reliable, but fewer opportunities

At A Trade or Two, we primarily use the 15-minute opening range for our ORB strategy. It captures enough price action to establish meaningful levels while still leaving plenty of trading day for the breakout to develop.

Why Does the Opening Range Matter?

The first 15-30 minutes of trading are when the market digests overnight news, economic data, and institutional order flow. Big players are establishing positions, and the resulting price action creates natural support and resistance levels.

When price breaks out of this range, it often signals that one side (buyers or sellers) has won the early battle, and momentum tends to continue in that direction.

How to Trade the Opening Range Breakout

Step 1: Mark the Range

From 9:30 AM to 9:45 AM ET, note the high and low of the price action. These become your breakout levels.

Example:

• Opening range high: 5,820
• Opening range low: 5,805
• Range size: 15 points

Step 2: Wait for the Breakout

After 9:45 AM, watch for a decisive move above the high or below the low. "Decisive" means:

• A candle that closes beyond the range (not just wicks through)
• Preferably with increasing volume
• Not a slow, grinding move that lacks conviction

Step 3: Enter the Trade

Once price breaks out:

• Long entry: Buy when price closes above the opening range high
• Short entry: Sell when price closes below the opening range low

For options traders, this means buying calls (or selling put spreads) on upside breakouts, and buying puts (or selling call spreads) on downside breakouts.

Step 4: Set Your Stop

The most logical stop loss is the opposite end of the range:

• Long trade → Stop below the opening range low
• Short trade → Stop above the opening range high

Some traders use the midpoint of the range for tighter stops, but this increases the chance of getting stopped out on normal volatility.

Step 5: Define Your Target

Common targets include:

• 1:1 risk/reward: Target equals the size of the opening range
• Fixed points: 20 points on ES/SPX is a common target
• Time-based exit: Close at a specific time (lunch, 2 PM, EOD)

ORB Strategy Rules We Follow

At A Trade or Two, our ORB bot follows specific rules:

1. 15-minute range only — We use 9:30-9:45 AM to establish levels
2. OCO orders at 9:45 — Buy stop above the high, sell stop below the low
3. 20-point target — We aim for consistent gains, not home runs
4. Stop at opposite range (or midpoint if range > 20 points)
5. Breakeven adjustment at 10:00 AM — If profitable, we protect gains
6. EOD exit at 4:00 PM — We don't hold overnight

Days We Skip

Not every day is an ORB day. We sit out when:

• FOMC announcements — Too unpredictable
• Range overlap — Opening range falls within the previous day's close candle
• Gap fills likely — If the market gaps more than 1%, it often fills first
• Holiday/low volume — Poor liquidity leads to false breakouts

ORB Trading Psychology

The hardest part of ORB trading isn't the strategy—it's the discipline.

Common mistakes:

• Entering before the range is established
• Taking both directions (picking one and waiting)
• Moving stops to "give it room" (leading to larger losses)
• Chasing after missing the initial breakout

What works:

• Accepting that some days won't trigger a trade
• Taking the signal mechanically, without second-guessing
• Knowing your max loss before the trade starts
• Reviewing every trade to improve pattern recognition

Backtesting Results

ORB strategies have been backtested extensively. Key findings:

• Win rates typically range from 45-55%
• Profitability comes from favorable risk/reward (1:1.5 or better)
• Performance varies by market regime (trending vs. choppy)
• Filter days (FOMC, high gap, etc.) significantly improve results

Our own backtesting on the ES over 30 trading days showed ~50% win rate, 1.32 profit factor, and positive expectancy when skip rules are applied.

Disclaimer: Trading futures and options involves substantial risk of loss. The ORB strategy, like all trading strategies, can result in losses. This content is for educational purposes only.