OPENING RANGE ORB -NinjaTrader is the range obtained from the highest and lowest price of a security during the first minutes of daily trading activity. For example the opening range can be calculated from the first 5, 15 or 30 minutes.
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The opening period can be selected via the time zone, the start time and the end time of the opening period. For example, if you wish to display a 30-minute opening range for ES, you would select Exchange_Time or US_Central_Standard_Time, a start time of 8:30 AM and an end time of 9:00 AM. The indicator will then display the regular open and the opening range high, low and midline.
You may also use this indicator to display the pre-session range. It is possible to display the entire pre-session range that covers the period from the start of the trading day until the regular open, or you may select a custom period for the pre-session.
The indicator will only return an accurate opening range, if it is calculated from minute bars that align to the start time and end time of the selected opening period. For example, if you wish to display an accurate 30-minute opening range for ES, you may only apply the indicator to 1-min, 2-min, 3-min, 5-min, 10-min, 15-min or 30-min bars. When selecting other bar periods or bar types, there will be overlapping bars in the beginning and the end of the opening period. This may result in a slightly inaccurate opening range.
If you wish to display a correct opening range on any bar type, please proceed as follows:
– Add a secondary bar series of 1-min*) bar to your primary price panel.
– Set the colors for candle outllines, candle wicks, up and down bars to transparent.
– Apply the indicator to the secondary 1-minute bars for an exact calculation.
*) When you add a minute bar series to a tick or volume chart, this will slightly distort the chart, as the bar spacing is adjusted to the duration of the bars. As a consequence of the law of large numbers, the distortion will be smaller, if you add a secondary bar series with a lower resolution. It is therefore recommended to use the highest bar period available that aligns to the start time and end time of the opening period. For a 30-min opening period for ES, you may therefore add 30-min bars instead of 1-min bars.
The chart attached shows the 30-min opening range on a 1000-tick chart to ES 12-17. The invisible secondary bars that were added are 30-min bars.
About ORB-The Opening Range Breakout
The Opening Range Breakout (ORB) indicator is a popular tool used by traders to identify potential trading opportunities at the beginning of a trading session. Here’s a brief description of how to use the ORB indicator:
- Identify the Opening Range: At the start of a trading session, note the high and low prices during the initial minutes or hours (e.g., first 15 minutes) of trading. These high and low prices form the “opening range.”
- Set Up Entry Levels: Once you have the opening range, set up entry levels above the high of the range for a long position and below the low of the range for a short position. These levels will serve as your entry points if the price breaks out of the opening range.
- Confirm the Breakout: Wait for the price to move above the high or below the low of the opening range. The breakout should be accompanied by strong trading volume, confirming the validity of the move.
- Execute the Trade: If the price breaks above the high of the opening range, enter a long position. Conversely, if the price breaks below the low of the opening range, enter a short position. Set appropriate stop-loss orders to manage risk.
- Manage the Trade: Once in the trade, monitor the price action and use technical indicators or chart patterns to identify potential exit points. You can take profits at predefined price targets or trail your stop-loss to lock in profits as the trade moves in your favour.
- Time Frame Consideration: The ORB indicator can be used on various time frames, from intraday to daily charts. Choose a time frame that aligns with your trading style and preferences.
Remember, no trading strategy is foolproof, and risk management is crucial. Always use the ORB indicator in conjunction with other analysis techniques and implement proper risk management to protect your capital. Additionally, practice using the ORB indicator on historical data or in a demo account to gain familiarity before applying it in live trading.