Open Range Breakout Strategy

This article is all about the open range Breakout strategy which is an intraday trading strategy. People who are trading within a day can follow some strategies which would be an advantage. The open range trading strategy has a time range of 30 minutes. This is the strategy which I personally prefer. You can also practice this strategy. When the market opens at 9:15, it is advisable not to disturb the market for half an hour i.e, after 9:45 you can monitor the high and low of the market. You can choose Nifty 50 stocks for this type of strategy.  You must filter whether the market breakout at high or low in the range of 30 minutes. For example, ICICI bank has a high of about 770 and a low of about 760. It is important to monitor whether it breaks out at high or low. 

When it breaks out at 770, another condition to be checked is whether it breaks out of yesterday’s high also. Yesterday’s high should be at a range of 730 or 740. Thus it should break out both yesterday’s high and the high today at the range of 30 minutes. When you apply these two conditions you would see a trend formation. You can follow the trend rather than predict the market. The low of that particular day should be maintained as stop loss. The ratio must be 1:2. When maintaining a stop loss of about Rs 2000 then you can expect a target of Rs.4000. This trading has to be done with a ratio of 1:2. It is good to initiate your trading with stocks. After gaining some experience in trading then you can move to stock options. When you buy 50 stocks from ICICI then you can also buy the call option. It has some risks hence it is good to be involved in it with enough practice. 

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Examples of open range breakout strategy 
This strategy can be explained in detail with this example. As I have said earlier, it is fine to leave the market idle for 30 minutes. After which you have to monitor whether the market breakout is high or low. In this example, we can see how to obtain success and avoid things that cause failure. I have taken the Titan shares. In these shares, I have taken a time frame where there is a scandal for 15 minutes and two 15 minutes from the 30 minutes. Here, the low is 2392.65. After 30 minutes, only the low has broken out which gives the intention of selling. But it didn’t break yesterday’s low. Still, I am applying the super trend and 20 days exponential moving average. The trend is to buy trends and the open range is sold. Hence it is better to be avoided. But it also has an accuracy of 50 to 60%. The titan shares have given a profit of attending 30 minutes break out strategy. But there should also be a second confirmation which is to satisfy both the 30 minutes break out and also yesterday’s break out. 

Now I have considered the Dabur stocks. For example, it is open to a range of low as 592.2. It broke out today’s 30 minutes as well as yesterday’s low. Yesterday’s low was about 595 and on applying the exponential moving average you would get the sell trend clearly and also on drawing the trend line as high on high and low on low, you would get a trend line of downtrend clearly. If you have attended this, the low is 592.2 with a market price of 577. Thus you would obtain more than 15 points in this stock through this strategy. 

Here is another example in which I have taken Divi’s laboratories. On Dec 1, based on the timings of two scandals, there was a break out at low which is about 4859. But it did not break out yesterday’s 4840 below which you have to initiate the sell. Only at which you would obtain the trend formation at the touchline. The second confirmation broke out of yesterday’s low. Thus you can sell this stock. On applying the exponential moving average, the trend line is at the sell trend and even on applying the super trend, you would obtain the sell trend. The strategy is very clear that the 30 minutes break out has to happen at a low and also there should be a break out on yesterday’s low. The third condition is that you can perform the trade using Nifty 50 stocks which is more advisable.  

Here is another example for the buying trend to break out since Nifty is highly volatile. I have considered Cummins India Ltd stocks. On Dec 1, there were two scandals in 30 minutes with a high of 895, and yesterday’s high was 898. Hence you have initiated your buy above 899. The current market price is 905. The market has moved to a high of about 913. It broke yesterday’s high of 898 and also today’s high. On applying the exponential moving average, the trend line is at the buying trend and even on applying the super trend, you would obtain the buying trend. If you are not technically strong and you are a beginner you can use this strategy to earn high profits. You can contact us further to clarify your doubts.