1 Min ORB vs 5 Min ORB

[Jaxettew 0]

I primarily trade ORBs in the morning at that is it.  How do you decide if you are going to trade the 1 Min ORB or the 5 Min ORB?  Also, when is the 5 min to extended to trade the 5 Min ORB?

Edited February 4, 2020 by Jaxettew

[huntermac 28]

I just started trading and am currently still in simulator, so take what I say with a grain of salt. The general consensus is to take the trade when the 2nd candle breaks the body of the first. Others choose to trade the break of the wick of the first candle. The issue with trading the wick, is you're more than likely going to be further from your stop loss and losing on more profits. 

I generally do not trade the 1m ORBs. They're extremely volatile and will fluctuate very fast, making it extremely difficult to trade and get in/out where you want.. I stick with 5m ORBs and 15m ORBs. They have big moves and they're easier to get in/out of in your desired entry/target areas. I also find that more often than not, the 2nd candle may very slightly break the 1st candle's body, retract, and then proceed up. So I have also took time to focus on level 2 and tape reading to solidify when the big break is that I'm looking for.

[Jaxettew 0]

5 hours ago, Jaxettew said:

I primarily trade ORBs in the morning at that is it.  How do you decide if you are going to trade the 1 M

I typically trade the 5 min ORBs but have had them reverse on me and get stopped. When is a stock extended to the point where it wont continue the ORB and instead reverse?

 

[huntermac 28]

3 hours ago, Jaxettew said:

I typically trade the 5 min ORBs but have had them reverse on me and get stopped. When is a stock extended to the point where it wont continue the ORB and instead reverse?

 

I tend to stay away from ORBs that have a body larger than their ATR. I love to scan for small bodies (I don't pay too much attention to the wicks, some people do) and take the trade on those. I also like to find ones that are closer to VWAP for a good stop loss area, and a good technical target level. And again, I wouldn't rely solely on the 2nd candle breaking the body of the 1st. Sometimes, there's a struggle and it comes back a little and drops before it takes off. I like to see large orders on the level 2 and then I like to see A LOT of volume being met on the ask in the tape. That's generally when I can confirm it's a true break on the ORB and fixing to take off. I find I get better at this the more I'm in simulation. 

Here's what I enjoy doing to test trading ORBs. I change my DAS simulator to quote mode, find stocks in play from previous dates, and trade ORBs for an hour. There's no access to level 2 yet, however, there's access to reading the tape. You can spend time watching the tape and seeing what it looks like when a true break is occurring.

I used to just trade the break of the body, but it's not enough (in my opinion) when trading ORBs. I believe reading the tape and level 2 reading are essential, because to me it's more of a momentum trade.

[Jaxettew 0]

18 hours ago, huntermac said:

I tend to stay away from ORBs that have a body larger than their ATR. I love to scan for small bodies (I don't pay too much attention to the wicks, some people do) and take the trade on those. I also like to find ones that are closer to VWAP for a good stop loss area, and a good technical target level. And again, I wouldn't rely solely on the 2nd candle breaking the body of the 1st. Sometimes, there's a struggle and it comes back a little and drops before it takes off. I like to see large orders on the level 2 and then I like to see A LOT of volume being met on the ask in the tape. That's generally when I can confirm it's a true break on the ORB and fixing to take off. I find I get better at this the more I'm in simulation. 

Here's what I enjoy doing to test trading ORBs. I change my DAS simulator to quote mode, find stocks in play from previous dates, and trade ORBs for an hour. There's no access to level 2 yet, however, there's access to reading the tape. You can spend time watching the tape and seeing what it looks like when a true break is occurring.

I used to just trade the break of the body, but it's not enough (in my opinion) when trading ORBs. I believe reading the tape and level 2 reading are essential, because to me it's more of a momentum trade.

Yeah, I typically trade the break of the body.  Basically if the 1 min moving averages are going up and 5 min moving averages are going up, I trade the break of the 1st 5 min candle.  I feel like sometimes the trade goes in my favor and sometimes it doesnt.  I get not all trades are 100%, but maybe Im doing it wrong? Not sure.  

[Jaxettew 0]

On a 5 min chart, Do you buy close to/just above a specific level (vwap, 9EMA, Support) that way you can place your stop pretty tight, limiting your risk for the trade?