Questions about the first 5 minutes (ORB)

[Teruki 21]

Hi,
My main focus on SIM now is the 5 minute ORB. While I am getting better at choosing a right stock for it, I have no definite method for that. I watch the first 5 minutes and if I think the stock has a definite direction and the new 5 minute candle starts with that direction, I take it. But what I think is "a definite direction" mostly depends on my gut feeling. I wonder what exactly I should watch for or be careful of (ex. short squeeze from before the open etc.).

Also, I am not exactly sure when to get in. According to Andrew's book, it is after the new 5 minute candlestick starts. But Both Andrew's video in the education center and Carlos's video (Webinar) talk about getting in before the first 5 minutes end, for example when there is a good pull back. So it's more like "expecting" to break out rather than after the breakout.  Also, when there is a very strong stock and it is just moving higher and higher (or opposite for short), I sometimes wonder if I should get in early because it gets more and more extended from VWAP. I thought of trying out the 1 or 2 minutes break out in that case, but I am not sure if it is a good idea for a beginner like myself.     

Any advice would be appreciated.

Edited May 21, 2020 by Teruki

[Abiel 475]

I'd say look for strong volume and get a good entry at important levels (VWAP). Open is wild and anything can happen so be ready to act fast. In this forum thread we discuss ORBs. 

[Teruki 21]

Thank you Abiel. I had read the thread actually. Very informative :)
I understand it is more important to find the good entry around important levels than stick to "wait until the new candle starts." then.  
I will try that with SIM.  

[JenniferL 27]

Kyle's Hot Keys seem to be helping me a lot with this.  

I am about 2 months in live after 9 months sim and just took my first successful ORB yesterday.  Previously, I had tried just as you described -- looking for the 5 min break and taking an early entry "guess" that it would play out.  I got really chewed up and spit out if my theory was wrong, and the volatility made it impossible to get out without a much bigger loss than anticipated.  I became too scared to try that strategy again.

With fixed-risk hot keys, I was able to have more security that my loss will not be too big.

One experience I will share, though.   I set a really tight stop. I got stopped out immediately upon entry for slightly more than my fixed risk.  I think what happened was that the calculation was made the and the spread was too wide when I hit the hotkey.   Because the price was moving  fast, I ended up with more shares than my anticipated risk so the loss was bigger, but not terrible.

 This is  a guess about what actually occurred, and a learning for me -- wider stop and check the spread.

Have fun!

[JenniferL 27]

Following up -- I have been re-watching and reading about the hot keys -- the "stop too close" might have been the reason for my problem, but it is also very possible that I hit the "long" key when trying to take a short position.

[Teruki 21]

Thank you Jennifer! I have not tried out Kyle's hot keys but it seems like a great way to minimize the risk.
And thank you very much for sharing your experience. As a newbie, hearing this kind of personal experience really helps!