the orb trade or the opening range breakout trade has always been one of my favorites just personally to trade and to teach to new traders because it's super simple It has a really systematic approach and it forces you to really wait out that initial rush and chaos before you really get an entry Plus we're kind of taking advantage of a play that helps kind of set the tone for the day So it can kind of help you set up in a few different ways but I've also seen a lot of absolute BS out there about orb trades It's like everyone wanted to hop on the trade and get their keywords so they would pop up in your searches but no one actually sat here and did all the homework So I'm going to tell you exactly what my orb trade rules are and how I came up with them because you might even be able to improve on this But let's start at the beginning what is the opening range breakout just to make sure that we're all on the same page And this is a 15minute NASDAQ chart right now So what we're looking at for an opening range we have the pre-market price action on the left and the New York session on the right And the opening range is just going to be some range that we defined that starts when the market opens and goes for a certain period of time So I used to trade a 30 minute orb a lot and uh I guess I've personally had some patience issues with it I've really been playing with the 15minute orb There's also people who will trade a five minute You can really make this strategy your own But what I'm going to focus on today is the 15-minute orb strategy So what we're doing on a 15minute chart is just looking at the first 15minute candle because that's going to define the 15-minute opening range This is the range of the first 15 minutes the high and the low of that 15 minute candle If you're looking at on a five minute chart it's going to be the first three If you're looking on a one minute chart it's going to be the first 15 minutes It's another reason I like watching a five-minute chart at open It's a little bit easier to keep track of But all that we're doing is seeing if that range is going to break in the most simple terms The problem is a lot of people will say it works really great or it doesn't work at all And that's based on the rules that you set when you actually execute the trade And that's what you really have to figure out when you're coming up with a trade strategy That's what developing a trade strategy is So that's exactly what I'm going to show you here So if I want to look at the 15-minute range I need to back test it And there's not really a way that I can just throw this in a back tester and have it really understand all the different things because I have to give it a target I have to give it a stop-loss I have to give it all these things and I have to define that off of something So the first thing I want to do is just literally go back and look at all the different charts and kind of find some baseline for all of that And I started off with just this little box but I got a little frustrated because I was trying to look at multiple assets and it was this was just a lot So I ended up creating this little tool and I I just call it the Orb Wrangler It's available on my website but it's so simple you don't actually need it So what this does is this just goes ahead and fills out that first opening range for me and then it's automatically taking some calculations for me And that way I can go back and look at the charts and kind of see what those little nuances that I want to optimize might be So I have a midpoint line This is the the middle of the opening range literally And then I did three lines that are just multiples of that middle line So this one's going to be halfway The first line is halfway through the opening range and the second one's going to be a full duplicate of that opening range A one one basically And then I have the same thing on the downside too Just for letting you know this little line here this dotted line is my VWOP I have it anchored to the session This is just a personal preference You can use an EMA you can use the regular full session VWOP I just like this one that starts at the New York open session because it reacts a little stronger And one of the things that I like to watch is the angle of this line So if VWOP's really flat that's showing that price is slowing down a lot If it has a a slope or a decent angle to it that's showing me that there's a lot going on And of course at open it's going to be really really really reactive That's just why I prefer that one We're going to kind of shelf that for a second and come back to that later But if I want to go back test this and I can't run it through a back tester yet the first thing I do is just literally go back and look at all the days and take some notes So um the first thing I'll do is I have this on the extended trading hours I'm going to hop down to just the regular trading hours because in this case I'm interested in the New York opening session One of the cool things about the opening range breakout trade is you can anchor it to other opening sessions like the Asian session or the London session or something like that depending on what asset you're trading But I really want to get this big powerful breakout uh the New York session when we're most likely to break out So I am literally just going to look at these and uh making this tool just made my life easier but I could have sat here and calculated this each and every day I'm going to take the volume off just so we can really focus on what's going on in each of these days But this is what I did I just sat here and I took notes and I actually even have it on paper and everything where I took notes on each one of these days and I took note of how often we broke out of the opening range and then when we broke out which targets we were hitting So basically I wanted to find the likeliness of how often if we break out of one side or the other These are all bullish break Oh there's a a lower break but if we break out of that how often are we hitting the first line How often are we hitting the second line And I literally just went through as many days as I could stand and I made those notes And that's what I have on my my papers on my desk here And I did this on ES first because ES is usually my favorite child But uh what I noticed and this makes a ton of sense is that I was actually getting more size on the brakes actually hitting these advanced targets on the NASDAQ more often than I did on ES So this was kind of the first optimization I did before I even got into the nerdy stuff So I immediately just switched over to the NASDAQ to watch this trade One of the big questions I get all the time is "How can you have confidence in your trades?" And I'll tell you it's a lot harder when I'm trading things live and I've got people asking me questions about every little thing I've thought of and every little thing I never would have even considered And I've got people second-guessing me and and all this stuff Even in the hardest situation like that if I have the data that tells me how often a trade wins and loses based on these certain sets of rules it doesn't really matter how much noise is out there whether it's in my own head or in a chat or when I'm trading live all of that craziness So that's what I'm looking for here is just the numbers How often does this work How often can I rely on it So I will uh give you a little sneak peek the rules that I'm about to tell you and I have the stats here They work out Okay Well we lost I'll tell you how many times this trade hits the stop-loss 22% of the time 22% of the time we lose on this trade Another 22 23% of the time it's hitting a trailing stop And then 55% of the time so more than half the time it's hitting the main target that I'm going for So let's get into that Okay so here is a NASDAQ 5-minute chart And this is usually what I'm trading off of in the morning And I'm going to explain the rules to you in the context of the trade that actually happened this morning And I did take this trade live So you can go look for my recap on it if you'd like But we have the uh open is going to be over here in the black and then the pre-market is over here in the blue So I'll go ahead and let the first candle form And this is a five-minute chart So I'm waiting for the first three candles So no matter what I'm not taking this orb trade before those first three candles are formed So my little tool just has the little dotted lines until we're actually inside of that opening range So for the first three candles I just literally sit and watch I can do whatever I want As long as I still have those dotted lines or I'm counting the candles however I want to do it I know that I'm still inside of that range And since my trade is a break of the range that's what I'm waiting for Once that that range is defined and that's these first three candles here then I have the actual levels So my tool is drawing a solid level here If if this was back old school the way I was doing this you know a couple weeks ago I would just draw a box on these first three candles like that That's my opening range And then I can extend it out Since I have my little tool I'm just going to look at that So what I can do here is just literally place some orders So I can place a buy order right here It'll be just a hair outside of that level I might bring it down just a smidge here Y'all know it's hard to get Trading View to go exactly where you want it to And then I can do another one down here just outside of that range And then all I have to do is sit here and be patient and wait because then once the market see that one didn't actually hit it got really close Okay so here's the first rule We don't frontun the opening range We leave our orders there and we wait We do not say "Oh that looks really bullish I should go in." We literally sit here and wait The other thing that I'm looking at is my VWOP And it's kind of hard to see right here because I don't have it on Okay there it is So the other thing that I want to look at is I want to make sure that the VWOP's not flat So I do have some slope on it there First it was sloping down So yeah maybe we would have been looking for the the opening range to break lower but hey now we're kind of looking for it to break higher And that's one of the things that happens during the open is we get a lot of this whipsaw back and forth And just having the discipline to wait for those candles to form really keeps you out of a lot of the nonsense And so now I have a system that I can use to trade this So now I'm literally just waiting for myself to get tagged in So that is where I get tagged in on this trade at 21285 and a half So I did actually take this trade I can throw a screenshot up so you can see how this actually worked once we go through it But once I'm in I just sit here and relax So the stop loss is now going to be I'll make it this line here This is going to be the stop loss I'll make that one red So we know that's stop loss And here's our entry Make that one yellow We got our yellow entry And now we need a target So we'll make a third up here That'll be the target And again this is my don't be a dick for a tick rules I always just go just inside of that line because I have had price come up to me enough and say "Eh nah not today." And turn around without me and I don't play that game anymore So here is our target So let's talk about it We have our entry We already talked about that My stop loss the initial stop loss is going to be it'll actually be just on the other side of this there Just on the other side a couple ticks on the other side of that opening range So just below the low of the opening range Our entry was just above We're tagged in And the target is I mean this isn't technically a one one It's basically a one one I'm basically targeting a 1 one just a couple ticks below the 1 one The actual 1 one hits a lot This just is this is my personal comfort level here where I just have it a couple ticks below So then I can just sit here and wait Okay So here's the next rule When price hits the first line and so this is half the distance of the opening range that's when I'm going to move my stop loss So my stop loss is way down here Now I'm going to move it to just above entry I want to get basically if I get stopped out here I want to cover my commissions So I'm just doing a little commissions cover stop move up there The target is still up here So I'm just showing you this on a one one right now This is one one money management basic or we'll get more advanced later And then it's just a matter of sitting and waiting In this case I did start trailing when I saw that dogee And this isn't actually part of the rules So this is more of a comfort thing If I was ALGO trading this the ALGO wouldn't have done this But what I did is I just moved it up just a little bit So I was under that swing high when I saw that dogee just so I can make sure I got a little something something on the day And then it's just a matter of waiting And there it got tagged out there So uh if I trade this every single day I will lose some of the time Didn't lose today Didn't lose Friday It did lose at some point last week it will lose sometimes with the back testing that I've gone over this year I haven't gone in like super back into previous years but for you know Trump era tariff era wild and crazy NASDAQ the results that I'm getting is I am going to get break even or better 78% of the time But that does mean that 22% of the time it's not going to work out So what I do is I make sure if I have if this has a horrible week if it's if it gets four failures in a week how much can my account withstand And that's how I figure out my position size for the different accounts Okay let's recap those rules and I'm going to make this really crazy and even take price off of here So first of all I'm using an asset that uh is prone to break out So the NASDAQ is known to be really powerful And then what I'm doing is I'm just defining that opening range For me it's 15 minutes So on a five-minute chart it's going to be the first three candles If I was watching a 15-minute chart it would just be the first one candle And then I want to make sure that VWOP is not flat and it has a decent angle towards the breakout As long as we're we're not just really VWOP would be flat if we're hanging around the midpoint So I'm really looking to see if we're above or below and you know getting some distance away from the other side So once we get that and we get a breakout a lot of times you'll notice we have volume with it If you have volume on the break candle that's a really really good confirmation that's going to make this an A trade instead of a B trade So once we get a break especially with volume we're already going to be in because we had our order up here and another order down here So one way or another we're getting in Once we get tagged in here we replace that order down here with a stop So this was this was an order to get tagged into the trade We're going to cancel that order and then we're going to put our stop there Once price hits the the first line which is half of the distance of the opening range the stop trails to break even And then we wait to make sure our trade hits at the target up there Super simple I do have some other rules that I've kind of watched just going over all of these trades over and over and over again because sometimes we'll get multiple breaks And what I'll do on days that we have multiple breaks is I will play each direction up to two times I do want this to happen in the morning I don't I'm not looking at the opening range in the afternoon You could that would be a whole different trade but right now I'm looking to get in in the morning and only the first two times it'll break a level because it will break a level come back retest and then go And in that case I want to be in And what I found was the happy medium was letting myself take that each trade two times Sometimes this trade works out really really quickly and you'll get your profit in just a few minutes I have had some times and Friday was a case of this where it really takes all day of grinding and grinding and grinding to actually hit those targets So that's why I like to have something in there already where I can get my stop protected and just let the trade work out no matter what I'm doing that day so I don't have to sit there and monitor the charts That's why I always like to have that trailing stop built into my strategies My next steps are going to be optimizing this trade even further and working on some automations out of it So watch the Discord and be sure to subscribe for information on that and definitely come watch me in the morning on MyFunded TV and we can trade this together Let me know if you're a fan of the opening range breakout either now or before you came to this video and how you like to trade it If you have any special little rules that you find really successful All right that's it for today but there'll be a lot more where that came from So I will see you real soon Love you die