Still failing the ORB

[Silviu 0]

Hello! I have been practicing the ORB strategy for about 3 weeks. I know it is not a lot of time, but I feel like even if the way I approach it improved since I began using it, I still fail at it. I attached below my last 3 trades trying to use this strategy. Currently I usually entry when the opening range is actually broken on the 5 mins chart (I use the wicks not the body), I entry when I see increased volume on 1 min and 5 min chart in that candle I enter on, I make sure I am not too extended from VWAP and also make sure there are no resistance levels along the way (I tried to do all of these in the trades below). Also, I am using stocks that are recommended in the chat room. I set the stop loss right below (or above) VWAP and my targets is usually 1R (or integer or 0.5 values). However, I failed all the 3 trades below (I got stopped based on my stop loss). And these are just the last 3, but most of my trades are like this. I am aware that this strategy is not 100% successful, but I definitely lose more than 60-70% of the time, even when I use all the rules above, so I guess I am still missing something about this strategy. Can someone advice me? I am really not sure what other indicators to use. Should I use larger timeframes, too? Should I set my stop loss further away from VWAP and take profit faster (maybe 0.5R)? I really feel stuck and I would appreciate any suggestion on how to improve with this strategy. Thank you!

 

[Silviu 0]

Thanks a lot for this! I attached below 2 trades I took today (the only 2 I took after the ones I posted, I am not choosing only the failing ones). For the AAPL one I saw an ABCD pattern on the 1 min chart and also there was that hammer red candle before that tried to go down but it was pushed up strongly so I really thought it will work (on top of all the rules I mentioned in the original post). For MRNA it wasn't a clear ABCD pattern, but again a strong hammer before. I guess the problem I am trying to figure out is what is the best way to improve. I am taking screenshots of all my trades and try to write down the thinking process, but for these last 5 trades (and many before), except that AMD issue maybe, I am not sure what I would change. I mean (at least from my beginner perspective) I don't see something wrong with my entry and if I would be in a similar situation I would probably do the same. I guess the issue is that these trades that seem good but fail don't give me any feedback to work with (i.e. I don't know what in my thinking process was wrong), so I am not sure how to figure out what I am doing wrong. At this point working on managing the risk/taking profit doesn't even matter as I get stopped out before I can even take 1R (and setting the stop loss even lower wouldn't help in most of these trades). It is true that I am not good at picking stocks yet, but usually I just choose the ones mentioned in the chatroom, usually Andrew's ones. Of course he has so much experience, but he heavily uses ORB, so I assumed that at least I can trust that the stocks are suitable for this strategy. Do you have any advice on more entry rules (or anything really). Thank you!

 

 

[NikkiB 22]

I think ORB's are the hardest ones to play.  And I actually think ABCD's are hard too - they're only clear to me AFTER they happen!  Since I trade AAPL every day, on your trade above, you entered when it was consolidating/in a range on the 1-min chart.  You needed to wait until it picked a direction.  Also, AAPL was very wicky this morning and therefore very hard to play.   I've also found that 1-min hammers are generally useless, unless there's a bunch of them in a row.  It takes a while....months....years!...to figure out what works for you.  My entries are bad because I wait too long to make sure of my decision - so I take profits quickly.  I rarely make 1R on a trade - but I'll make .5R, .4R and .7R and call it a day.

[Silviu 0]

Thanks for this! May I ask what strategy do you use to trade AAPL?

[NikkiB 22]

Keep in mind that I have been trading for 2.5 years - so I've gone through SIM trading, I've traded every dang strategy out there, I've been with BBT for a little over 1.5 years now and have seen almost every webinar and education video, I did the PCT bootcamp...I've worked through a lot of wins and losses to find out what works for me and what doesn't (and I still screw up and take bad trades even when I know they're bad trades!)  This morning on AAPL I did a quick scalp on the 1-min ORB based on price action and what I saw on the L2 before the bell (with VWAP as my stop).  Then I shorted it at HOD (stop loss a few cents above HOD) at 9:49 because of the wick pushing price action down.  Then I shorted it at 10:03 (stop loss a few cents above HOD) for a double top.  Keep in mind - I take my profits quick because although some trades do run - most of them don't seem to for me (and I don't have the patience to wait them out)!  Double tops are by far my most profitable trades....unfortunately I don't have the self-control to wait for them to form most of the time.  I heard it so many time over the years...."You'll eventually find what you like to trade" and I spent a lot of time thinking I found it.  You need to play around with a lot of strategies and find out what works for your brain.  I.E. - ABCD's don't work for my brain at all.  I'm best when I trade for the first 30-45 minutes and walk away.  No matter if I'm up or down after that time - 95% of the time if I keep trading, I'm gonna make myself red or redder for the day.  If I hit my max daily stop in the first 5 minutes, I'm pissed because I lost money and I wasn't patient and now I can't trade more for the day.  So that helps me chill out and wait for trades that make sense to me.  And although I wanted to be one of those people who has 10 different stocks up on my screen - I found that just makes me frantic and I miss every trade trying to catch every trade.  One of the BBT videos was someone saying they only trade one stock every day (I think it was TSLA) and I decided to try that and it works much better for ME.  Maybe I can work up to more, but for right now this is what works for me

[Silviu 0]

@NikkiB actually trying to watch several stocks at the same time especially for ORB is one of the main things that affects me, too. I didn't think that using just one stock would give me profit. May I ask how much do you make per day on average (in terms of R)? Also, when you say one stock per day, do you mean it is always AAPL (or at least APPL for a long time), or it can be a different one every day?

[Alastair 110]

8 hours ago, Silviu said:

@NikkiB actually trying to watch several stocks at the same time especially for ORB is one of the main things that affects me, too. I didn't think that using just one stock would give me profit. May I ask how much do you make per day on average (in terms of R)? Also, when you say one stock per day, do you mean it is always AAPL (or at least APPL for a long time), or it can be a different one every day?

Have u watched Ed (AJT) in the SMALL ACCT room trade 5M ORBs ?  He only trades these in the mornings and is successful at it.  Stock selection is very very important, need a catalyst for the ORBs.  Check out his rules and style.  He never trades AAPL as an ORB.

[NikkiB 22]

Yup, it's AAPL for me every day.  And I'll tell you why - I have the 1, 2, 5, 15, 30 and 1 day charts up for AAPL.  Along with my montage with L2 highlighting big orders and two T&S screens up, one just for big orders.  I can't tell you how much I've learned about watching different time frames and actually knowing what's going on with the L2 by just keeping it all up there for one stock and paying attention to it.  If I'm trying to watch that for too many stocks, I retain no information.  There were big orders on the ask on the L2 this morning at 161.00 - I knew if AAPL was strong I needed to watch that level to see what happened - bounce or continuation.  And I took it for the continuation this morning after it passed the 161.00 and held PDH.  Of course it's still going, I got out WAY too early, but that's ok - I did everything right and I'm green.  It is still a learning curve for me!  But I do WAY better when I concentrate on one stock at a time and AAPL moves most every day and works for me - and I'm actually also getting a really good feel for how it moves.

I make about .7R-1.5R per day.  My R is $110 right now, I just raised it up from $100 last week and I started at $50R a couple months ago.  I try to only take 2-3 trades a day, so my commissions are generally under $10.  I know - nothing glorious there - no big 5R stuff and huge money making days!  But trust me, I've tried that many times and I just end up with big -6-7R's with a bunch of commission fees!

It's all trial and error...and unfortunately takes way longer than you'd expect it to!  For the record, I now also have AMD up on another screen - the 1-min and 5-min or 1-day charts.  I found that by only having AAPL up, if it wasn't moving I'd find a reason to "see" a trade to take because I'd be getting bored/antsy.  I go in to the open with a good idea of what's going on with both of those tickers and I watch them both.  I.E. - I had AAPL up on my main set up when I saw AMD looking like it was going to break that range this morning - it happened as I was in my AAPL trade (only a few shares left, I'd already taken the bulk off), so I set a trailing stop on my AAPL trade and switched all my main screens over to AMD and went long on that for the break of the range.  So I guess I trade only AAPL and AMD, but to me, AAPL's my main watch and AMD is off there on the side for me to glance at if AAPL's not doing anything.

[vchandra11 8]

Hello Silviu

Some food for thought:

If I knew in the weekend that I will be trading AAPL and MRNA on Monday morning using ORB trades, before the trade I would do the following based on my Day Trading Plan for ORB trades:

1. Determine trade bias for the market

2. Determine trade bias for the sector

3. Determine trade bias for AAPL and MRNA

4. Determine overall trade bias for each of AAPL and MRNA

5. Mark-up support and resistance levels

Per my analysis, trade bias was:

AAPL - Bearish

MRNA - Bearish

This means I will only take short trades for ORB on Monday morning for AAPL and MRNA.

Attached are graphical analysis for AAPL and MRNA.

However, for AAPL, after market open, I  see the trend and momentum are up/bullish, but my bias is for bearish trade, therefore I would not take an ORB trade for AAPL. 

Also, for MRNA, after market open, I also see that the trend and momentum are up/bullish, and again my trade bias is for bearish trade, therefore I would not take an ORB trade for MRNA.

So in short, I would not have taken any ORB trade for AAPL and MRNA last Monday. 

For me it is a good practice that if the bias analysis for the day based on market alone is bullish, then it would be prudent to look for and take bullish trades, This can be done done ahead of time in a more relaxed manner, ie end of day data analysis for trade next day.  Also if I want to trade one or two selected stocks, then I can also do trade bias analysis for the stocks as well. This process favors high probability of success, ie trade with the market.

Also, if I do ORB for stock in play in the morning, I would make it 10-min ORB (x2 5-min candles). This gives me time to prepare graphical analysis, calculations and selection from two or more stocks before placing the trade.   

My suggestion is to get yourself a mentor who can help you to prepare your Day Trading Plan with ORB. Good reference book for ORB trades: The Logical Trader - Mark B. Fisher.

Please note this is not an investment advise. Please obtain investment advise from your own investment advisor, The notes and illustrations hereon are for discussion and illustration purposes only on BBT Forum.

 

 

 

 

Typical Graphical Analysis - AAPL-5-min for 28Nov2021.pdf Typical Graphical Analysis - MRNA-5-min for 28Nov2021.pdf

[vchandra11 8]

Hello Silviu

Some more food for thought:

Attached is my understanding/summary of graphical design for ORB trading per Fisher ACD Method for potential AAPL trade today.

Good reference book for ORB trades: The Logical Trader - Mark B. Fisher.

Please note this is not an investment advise. Please obtain investment advise from your own investment advisor, The notes and illustrations herein are for discussion and illustration purposes only on BBT Forum

EXAMPLE - DAYTRADE GRAPHICAL DESIGN - AAPL - MARKUP FOR ENTRY POINTS.pdf EXAMPLE - DAYTRADE GRAPHICAL DESIGN - AAPL - MARKUP ENTRY POINT.pdf EXAMPLE - DAYTRADE GRAPHICAL DESIGN - AAPL - MARKUP POTENTIAL EXIT.pdf EXAMPLE - DAYTRADE GRAPHICAL DESIGN - AAPL - MARKUP SECOND ENTRY.pdf EXAMPLE - DAYTRADE GRAPHICAL DESIGN - AAPL - MARKUP EXIT END OF DAY.pdf