Transcription
I've been trading the opening range strategy for the last 7 years. It's the one trading setup that shows up every day, is reliable, and consistent, but it can also be one of the fastest ways to blow up your account if you don't know the trap most beginner traders fall for.
In this video, I'll show you exactly how to trade the opening range strategy and how I fixed it by adding one simple trick to turn this from a losing to consistently winning setup. Then make sure to stick to the end of the video because I'll be going over real chart examples and I'll share three rules that helped increase my win rate that nobody talks about using this strategy.
Now, my mentor taught me the opening range breakout strategy almost 7 years ago. And when I first started using it, I did see a little bit of results, but overall, I actually ended up losing quite a bit of money and actually failing at the opening range breakout strategy for years because I didn't understand the three simple rules I'm going to explain to you in this video. And because of this, not only did I waste money, but I also wasted time using a system that works, but I was just using it wrong. And 90% of traders make the same mistake as me.
And once I discovered the three simple rules to add into my opening range breakout strategy, three years later, you can see these are my results where I started the year and where I ended the year. And this was simply by adding the three simple rules into my ORB strategy to make it more effective. And fast forward to now, this last month alone. These were my total results. And every single trade that you see here was taken live in front of thousands of traders to show that this strategy does work if you know the missing pieces required. It's important to mention this did not happen overnight. It took years to perfect. But this is how I found my winning twist on the Orb strategy. And that's what I'll share with you in this video.
The goal of this video is to show you the one simple and proven strategy I use to trade for the first 90 minutes. But most importantly, in this video, I'm going to teach you what the orb is, why 90% of traders fail trading the orb strategy, the simple trick that I use to filter out low-quality setups in my own trading, and then I'm going to be showing you a step-by-step live examples on how to use the orb strategy using the simple trick that I will talk about in this video. And this way, by the time you're done watching this video, I will explain one repeatable and rules-based strategy that I use every day.
Now, remember, I don't want to make this video long, but I want to make it as valuable as possible. So, make sure to watch the entire video, and if you're ready to learn, make sure to leave a like on this video. Let's see if we can get 2,000 likes. And if we do, I'm going to be dropping a full course on how I would start day trading as a complete beginner in 2026 to have a clear and simple road map for my trading career.
Now, with this being said, what is the orb strategy? All the strategy is is we want to mark out the first 5 minutes after market open. This is going to be the 5-minute high and the 5-minute low. In between this high and low. What we have here is range. So, this whole candle is range. We do not want to trade the range. Rather, what we're waiting for and why the orb is such a powerful strategy is because it helps us eliminate all the noise and confusion out of our trading and focus on either a break to the upside or the downside with this system.
Now, very quickly, I do want to mention that the orb can be used on the 15-minute time frame, the 5-minute time frame, or even the 1-minute opening range breakout strategy. In this video, we're going to be talking about the 5-minute opening range breakout strategy. However, if you use the 15-minute or the 1-minute strategy, all the concepts I'm going to talk about still apply to those time frames as well.
So, for most traders, when they're entering into an orb setup, they enter on the breakout of the range. So if we have a 5-minute high up here, what most traders are going to do is they're going to look for the breakout and they will simply enter in on the breakout of the opening range break. And this is where the problem occurs. If they enter in on the breakout of the opening range break, this is because they are looking for a quick move to the upside. But what happens when we enter a breakout? Well, unfortunately here we can see we entered into that breakout, but the very next candle ended up rejecting that 5-minute high and this trade came all the way back down. So rather than winning this trade, we would have lost this trade instantly because we didn't understand the missing piece for the orb strategy.
And before I explain the missing pieces of the orb strategy, first I need to explain why the orb setup fails for new traders. Number one is the fake breakout. So, you're entering into fake out liquidity without understanding you're doing it. And because of that, you ultimately end up losing the trade. Number two is you have no price confirmation. You didn't wait for the structure of the trade to actually set up. And because of this, you entered in a little bit too quickly or prematurely, and because of this, you lost the trade. And number three, you're chasing the opening range break. Just because you want to win a trade, you end up chasing the breakout of the opening range, and you lose more money than you need to.
So if we take our previous example here, you can see where we entered in on this green candle. This can be considered fake out liquidity or a fake breakout because we had buyers trying to break this stock out, but in the very next candle, we come all the way back down. So why is that? Well, it's because we didn't realize before the market opened in our pre-market, we had a pre-market supply zone in this area over here where we can see multiple candles rejecting off of this area for a move down before the 5-minute developed. And then when the five-minute developed, yes, it's showing bullish price action, but it never actually broke out of the fake out liquidity that it needed to. And this is why we prematurely entered into the trade.
Now, the tricks and rules that I'm going to be explaining later on in this video, we don't even need the pre-market. Even if there is fake out liquidity, we can still avoid it using the simple tricks that I'm going to talk about later on in this video. So, make sure to stay tuned for that. But most importantly, what you need to understand is when you're buying a breakout, you can be hit with fake out liquidity. Number two, we did not wait for price confirmation. Yes, buyers did step in and close this candle above the high. This does not mean we just enter in blindly. We have to wait for price to confirm and to confirm that this 5-minute high is indeed now support because before this break this was resistance. So this 5-minute high was resistance and down here on the 5-minute low we had support. But when we get a breakout of resistance this resistance should now turn into support for the next move to the upside. In the very next candle, we came all the way back down. So, this was still resistance and we had no price confirmation. And finally, number three, we tried to chase the opening range break just because we saw a breakout and we wanted to have a quick trade back to the upside. We try to buy the breakout above the 5-minute high looking for that quick move, but unfortunately, it doesn't happen. And majority of the time, that quick breakout trade is often something that will leave you with fake out liquidity. So, that is something that we don't want to trade.
Now, the biggest question is how do we fix all of these mistakes but make this opening range breakout strategy much more simple? And for this, there is three simple tricks and rules that I'm going to explain in this video. First, I'm going to explain these rules to you and then I'm going to show you them on the real chart so you can see exactly how I implement it in the real markets.
Number one is we want to wait for a real breakout. We're not going to look for fake out liquidity. Now, don't worry about this one too much right now as I will show you much more clear examples later on in this video.
Number two, we will not buy the breakout. Instead, we will be buying the retest. The retest simply means is if we have a 5-minute high and a 5-minute low, we do not want to buy this breakout, but rather we're going to buy the retest back into the 5-minute high or this pullback. This is where we want to enter for the lowest risk, but the highest reward back to high of day and continuation. Once again, I'm going to show you that much more clearly in the examples.
And finally, number three, we want to wait for strong price action. This will confirm our entry every single time. And ultimately, the goal of this is to give a higher win rate. So, in the example that we had, we were on the 5-minute time frame and we were looking for the breakout and that's where we were entering. But instead of entering here, what we're going to do is go to the one minute time frame. And this is where we're going to look for our entry. The key signals that will help us enter this trade. You can see we had the breakout on the 1-minute time frame, but now we're coming back for the retest into the 5-minute high. And this is where we want to look for those signals.
Here you can see a real breakout. Why is this a real breakout? Well, this is a real breakout because we got a candle closure above the 5-minute high. But on top of this candle closure, we also got the retest. So, the reason this is a real breakout is because when we get the retest and we see that buyers are stepping up on that 5-minute high, well, this shows that this 5-minute high now turned from resistance over here to support over here. And therefore, this validates this breakout as breaking above resistance and turning it into support. This makes this a very low risk but a high reward trade. And finally, we needed to wait for that strong price action confirmation. In this one here, we can see that buyers stepped up very nicely on this big green candle and aggressively showing that we want that next move back up into high of day. And if we actually end up playing this trade out, we can see that this trade worked out very nicely using the orb strategy, but adding a little bit of a twist to it to give us an even higher probability entry model.
So now, after showing you what makes a high probability orb strategy, now I'm going to show you live trading examples. This is going to be one of the most important parts of this video because not only will I show you winning setups, but I'll also show you losing setups. And this way, by the end of the video, you'll be able to identify high probability setups much better.
Okay, here we are on the first example and we're going to let the first 5 minutes of the day play out. Of course, we are on the 1-minute time frame and we will mark out the 5-minute high and we will mark out the 5-minute low. Now what I will show you through these examples is the difference between buying a breakout entry compared to a high probability break and retest using the orb strategy. So for our entry what we want is simply a break above a retest and continuation to either side whether it be to the downside or to the upside. However, with normal orb all we're going to be looking for is the breakout and that's where we would be theoretically entering that orb entry. So let's see exactly what happens on this first trade.
All right. So for this example so far we can't consider this a breakout because we did not have a candle closure above. For breakouts I will be using candle closures. And on this example here we actually got that breakout. So we can see this is the orb entry that most beginner traders would be entering on. And this is going to be the breakout of the bottom of the ORB. This is where most traders enter in on and this is where they make that mistake. So let's say we're aiming for two R multiple. That's what I aim for every single time like I talked about. And our stop loss is simply a break back above the candle that we're entering on. Our stop loss will be about $1,160 and our profit target will be $2,230. Let's confirm this entry and see what happens here. And unfortunately, we can see we actually got stopped out of this trade using that orb strategy with the breakout. And this is because we didn't wait for those three simple steps like I talked about.
However, let's see if we can actually get a good entry potentially to the upside here. So now we can see on the upside move, we have this orb, which is the 5-minute high and the 5-minute low. We had this break down but no retest because as we can see all the candles closed above the 5-minute low but now we see this strong breakout. This is confirming yes we did break out. We are getting a retest back into that 5-minute high. So the first rule is the strong breakout. The second rule is the retest and the third rule is strong price action. Very strong buyers stepping in and bullish price action being presented. So this is a place where we can look to enter using our high probability entry model with our stop loss simply at a break of this down close candle and we need at least a 2R multiple. In this example, we can simply just target out that $25,650 whole psychological number with our stop loss simply at the break and our profit target up here. For this one, we're risking about $1,20 for about $2,220 in potential gain. Let's see what happens. This trade did come back down, but remember it did not break our stop loss. Therefore, we're still in this trade. And just like that, you can see we were actually able to win this trade by understanding the orb strategy, implementing the three simple rules that I taught you in this video. And this way, it made it a much more highly effective strategy. And this is exactly what helped increase my win rate when I'm trading the orb strategy. So, this was the first example I wanted to show you. Let's go over to the second example.
Okay, here we are on the second example. And on this example, I want to show you why using the break and retest is better than the breakout as well. Now, here we have the first 5 minutes. So, we're going to mark out the first 5-minute high. And we're going to mark out the first 5-minute low. And for this example, we're going to do the same thing. If we get a breakout, we'll enter that. If we get a break and retest, we'll enter that. And once we do this, I want to ask you, which trade do you think is going to be better?
Okay, so here we got the breakout. We can enter into this position here, but we need it to our multiple. Therefore, our stop loss is going to be a break of this candle, which we're entering in on. And our profit target is all the way down here. If we enter into this trade, we're looking to make about $5,250 for about $2,580 of risk. So, let's enter into this trade here. But let's also see if we can get a retest entry as well. And here we can see we're getting that retest entry as well. So, not only did we get the breakout, but we're now getting the retest. Now, on this retest entry actually has a little bit better risk-to-reward. This is because we are coming back into this area and this is going to be the lowest risk but the highest reward trade for us. If we were to enter into another trade here looking for that same profit target with the same stop loss as the breakout, well, rather than having around that 2R multiple, we would actually have a 7.28R multiple. So for the same $5,000 in potential gain, we would only be risking about $900. I hope this helps you understand why the break and retest with the opening range break is a much more effective strategy. Not only because does it increase your win rate and it helps you find higher probability trades, but at the same time it gives you lower risk trades with higher reward as well. Let's play out this trade and see what happens.
In this example, once again, we can see both the trades worked out. The breakout worked out and the break and retest worked out. However, for the breakout, we risked almost three times more than we risked with the break and retest. Therefore, if this trade did lose, we would have lost much less and have a lot less stress as well just by entering the break and retest and waiting for that confirmation entry. This was the second example. I want to show you one more example of how we can create a better opening range break strategy. And this will help solidify and put everything in this video together.
All right, here we are on the last example. Let's play out the first 5 minutes of the day. And here we can see the first 5 minutes of the day. Therefore, we can mark out the 5-minute high and we can mark out the 5-minute low. Once again, we're going to be buying not only the breakout, but if we get a break and retest, we'll be buying that as well. And here we can see that breakout entry. So, we can look to actually go short on this name here. Our stop loss is going to be a break above that breakout candle. And we need to aim for at least a 2R multiple. We're risking about $1,160 for a potential gain of about $2,140. Let's play out this trade and see exactly what happens with the breakout entry. And unfortunately, you can see the breakout entry, we came right back and we actually got stopped out of this trade. And you can see this day we were actually consolidating earlier and therefore this made it a very low probability trade as well for the first breakout trade.
However, let's see if we can get a potential retest of this trade. And now here we can see where we actually ended up buying that breakout. We ended up having a little bit of fake out liquidity. Then sellers stepped in and now we're coming back for the retest with weak price action. So let's look to enter into the same trade here again with the same stop loss and our profit target still has to be that 2R multiple and let's see if this trade works out better than that previous trade that we took just by simply adding the break and retest factor to it by understanding that this is weak price action and by not chasing the breakout. Let's see exactly what happens on the second entry. And we can see by understanding the break and retest, yes, we do have some buyers stepping in, buyers and sellers fighting near this area. But because we have such a low-risk entry trade, we are still able to ride this trade out and capture it into our profit target by simply understanding this winning twist that I put on the opening range breakout strategy for myself.
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