Opening Range Breakout Strategy for Beginners
After the opening bell, stock trading usually sees some of the most significant price swings of the day.
There are various definitions of what the opening range means, but the most common is that it refers to the gap between the low and high price of the first 30 minutes of trading.
Any basic stock charting package can do this work for you through candlesticks. There are four key price points in a candlestick; the chosen period’s open, high, low, and close.
A breakout of the opening range occurs if, after the first 30 minutes, the price crosses the highest or lowest wick.
During the first 30 minutes of the trading session, these are the price data for ABC stock:
– $121 is the opening
– $120 is the closing price
for the opening range.
– $110 is the first price of
the opening range.
– $109 is the opening
If you’re trading the opening range breakout the traditional way, you’ll buy the stock if the price rises above $121 and sell the stock if the stock price falls below $109. The strange is very simple, so don’t overthink it!
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