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IamKarthi

My ORB strategy "Pullback ORB-Breakout Entry"

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I was getting burnt while taking the conventional ORBs at the open. It affected my pshychology when my first trade of the morning fails, even when I think the setup was perfect. For e.g, A beautiful strong 1min open candle on $TIGR below, with no wicks, I went Long and got stopped out. If my first trade fails then it becomes a catchup to overcome the losses and then achieve the daily goal, and my pshychology gets messedup.

2019-06-18_$TIGR_ORB_Fail.png

 

I found some ways to narrow the ORB setup down to a level which offers high accuracy and would like to share this  strategy "Pullback ORB with Breakout Entry"|. I have tried this out for the last couple of months and it has worked very well so far.

The reason for this setup:

  • I wanted a high accuracy setup at the open.
  • I don't like overtrading, I prefer one and done, if possible.
  • I am time constrained during the day. I can trade only at the open for 30-40 mins. And I am not good at Trading reversals. 

About the setup:

This Pullback ORB-Breakout Entry works very well with @WilliamH Harmonious Charts. 

Step 1: At the premarket, find a Harmonious setup, where the price action is above (or below) all the MAs on multiple timeframes 1, 2, 5, 15, 30, 60min and Daily (most of them, if not all). I prefer when the Harmonious chart is also ATH/ATL (All time High or Alltime Low)

Step 2. Pullback candle: At the open, Watch the 1min chart for the first 2 mins. Check if the 2nd candle is a Pullback Candle. Then it is an Alert. E.g Below.     

Pullback_Candle.png

 

Step 3: Breakout Entry: Wait for the 3rd candle to break the previous 2 candles high (only bodies, no wicks) and take an entry. E.g Below.

Breakout_Entry_with_VWAP_Stop.png

 

Step 4. Profit Targets: This is usually high RR setups, some times as high as 3-4 RR and a good candidate for riding till close. 

High_RR_setup.png

 

Step 5. This pattern/Setup works as good when it occurs on 2min or 5min timeframes too. If step 2 doesn't occur on 1 min chart, switch to 2min chart and watch for the pullback candle on 2nd 2min candle. Continue Steps 2-4. If it doesn't occur on 2 min, switch to 5min chart and continue steps 2-4.

P.S: 

  • Harmonious charts - Sometimes you may find higher timeframes as Harmonious and smaller timeframes not harmonious, Wait for the open to see if the price action becomes Harmonious on these smaller timeframes too.
  • Contrary to other setups, this setup works well when it appears on smaller timeframes. Eventhough it may appear on 15 or 30 mins, the setup may not provide high RRs.
  • These are not rare setups, they occur almost everyday on common stocks like $FB, $AMD, $MU, $UBER, $TSLA etc., 
  • At the open, I watch 6-7 stocks for this setup and switch from 1min to 2min and then to 5min. 

Please let me know if there are any questions.

 

Edited by IamKarthi
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09.Jul.19

Here is an example of this setup from 9.Jul.19. I took a Live trade on this. 

2019-07-11_Pullback_ORB.png

 

Because there was a Resistence at the top, Price didn't move a lot. That is why I prefer William's Harmonious charts with ATH/ATL (doesn't happen often though).

Edited by IamKarthi
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16.Jul.19

I took another Live Trade today on this setup in $FB on 10min Chart. 

Once again there was strong resistence at the top. Y and YY high, so the price couldn't move much higher.

2019-07-16_10min_Pullback_ORB_-_Breakout_Entry.png

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Thanks a lot @IamKarthiI also have the same problem. If i get the first 2 trades red then it just goes downhill from there and I get hulk days! I am in sim though, so all is not lost. I will try to trade your ORB strategy tomorrow as ORB's are pretty much where I have made most of my green trades yet. 

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23.Jul.19

I took another live trade today, based on this setup. Daily was not supporting this move, so I had to partial out quickly for a small profit. 

2019-07-23_$MU_Pullback_ORB_Breakout_Entry.png

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01.Aug.19

I would like to share another setup that may work at the open. This is based on the chatroom discussion with @Brian Pez . 

Again, this setup works very well with WilliamH's Harmonious charts. I am attaching the screenshot of the trade I took.

$PS. The stock had gapped down today. During premarket, it kept selling. At the open it pulled back to VWAP/MAs (due to all the shorts covering at the open) and then $PS continues to drop. I took at entry below VWAP with stop of only 5c (above 50MA on 1min). And rest of the steps are included in the picture.

ORB_at_the_open_on_Daily_Gapped_down_stock_$PS.png

Edited by IamKarthi
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On 9/7/2019 at 3:31 AM, Jramosent said:

Have you had consistent success with this same setup? 

Yes. I have good success rate with this setup, although no setup is guranteed to succeed all the time. And when it aligns with Harmonious charts (with ATL/ATH), we can expect big RRs. Lot of people in our chatroom and outside take similar setups (3C setup, 3Bar play etc.,) they are slightly different, but the core concept is same. 

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On 9/7/2019 at 5:50 AM, Magnus Alexander said:

This strategy looks like the typical ABCD pattern to me. 

Because price goes up and down all the time, every pattern may appear to be an ABCD.

In my view, a typical ABCD pattern needs more consolidation between B and C and works when there is medium/low momentum. This pattern is specifically for the open when there is big momentum and not a lot of consolidation except a small pullback.

Edited by IamKarthi
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