ORB Breakout
The opening 15 minutes decide the day — trade the break.
What is it?
The Opening Range Breakout captures the explosive move when price breaks out of the first 15-30 minutes' high-low range. This range represents the initial battle between overnight sentiment and morning liquidity. A decisive break signals which side won — and the trend often continues.
When to use it
Best on gap days (stock opened 1%+ higher/lower than yesterday). Works especially well when there's a catalyst (earnings, news, sector rotation). VIX above 15 is ideal — calm markets don't produce strong breakouts. Check for volume: the breakout candle should have 2x+ average volume.
Entry rules
1. Wait for the first 15-minute candle to close (opening range) 2. Mark the high and low of that candle 3. Enter long on a break above the opening high (or short below opening low) 4. Opening range must be < 2% of price (too wide = too risky) 5. Direction must align with the pre-market gap direction Use a limit order slightly above the breakout level to confirm.
Exit rules
Stop: Opposite end of the opening range Target: 2x the opening range height from breakout Trailing: After 1x range achieved, trail by 0.5x range Partials: Take 50% at 1x range Time limit: Exit by 12:30 PM if target not hit — lunch hour kills momentum
Common mistakes
• Trading both directions (long AND short) — pick one based on the gap • Entering before the range is established • Not checking if the stock has a catalyst — random ORBs are noise • Wide opening ranges — if the range is 3%+, skip it • Holding through lunch — ORB momentum dies after 12 PM
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