Today I'm going to show you a trading strategy that is just scary accurate. It's called the ORE, the opening range reversal. It's simple, it's repeatable, but best of all, it is really hard to mess this thing up. And that's because all you need to do in order to master this strategy is wait for one candlestick to form, draw yourself a horizontal line, then wait for the entry. I mean, that's all there is to it. But don't let its simplicity fool you. Because when done correctly, it is hard to beat the power and accuracy of the opening range reversal. There just isn't anything like it. And that's because it takes advantage of one specific nuance that has to happen every day in financial markets. Now, I'm going to show you what that nuance is here in just a moment. But before I do that, let me take a moment to introduce myself. My name is Doug and I've been in the trading game since we've had dialed up internet. It's been a while. And throughout that time, I've studied hundreds upon hundreds of different trading strategies, and I have never seen anything close to the power and accuracy of the opening range reversal. So, what I'm going to do for today's video is show you everything I've learned about this trading strategy. And towards the end, I'll provide you with a series of live trading examples in a live market. That way, you know exactly how to implement the opening range reversal. So, let's go ahead and get started. So, let's go over a few details about the opening range reversal followed by four simple yet very critical steps. Now, when it comes to the opening range reversal strategy, it's about as basic and straightforward as it gets. I mean that. So, it's very, very difficult to mess this thing up. We don't need any fancy indicators. We don't need any complex theories. And we definitely do not need to overthink it. It's just straight down the middle. And here's what we're going to be doing. We're going to be looking to buy intraday weakness on strong assets or sell intraday strength on weak assets. Now, don't worry if you didn't comprehend that whole entire phrase. I'm going to pick apart this strategy here in just a second. But before we get involved in the steps, what I'd like to do is make sure we all have our charting set up correctly to maximize the quality of the opening range reversal. And the opening range reversal requires two types of charts. A small intraday chart that can be anything sub one hour. I like to use a five minute, but it could be a 1 minute, 5 minute, 10 minute, 15, 30 minute. Anything sub one hour is just fine. You use whatever you like. However, we do need the daily chart. And the daily chart is not negotiable in this case. In order to get the most out of the opening range reversal, we need to heavily rely on the daily chart. And I'll show you why here in just a second. So, let's go ahead and look at the screen here. And I what I have for today is two charts. This is typically how I have it set up. You set it up however you like to, but we need those two charts. So, for today's example, you'll see in the upper corner, just for reference, I'm using the stock ARM, ticker symbol ARM. It does not matter what's up here in this corner. This could be gold, oil, some other commodity. It could be some cryptocurrency. It could be futures. Doesn't make a difference. I just happen to be using the stock today. And you'll see my preference for the short-term time frame is the five minute. Again, you can use whatever you want here as long as it is sub one hour. And down below, I will have the daily chart selected. So, you'll see now it says the daily chart. And that's all we really need to do for right now when it comes to charting. Now, once we have that charting sorted, we can move on to step number one, which is something called trend bias. Now, I know a lot of you watching have heard the term bias and may have a general understanding with it. However, trend bias is something that's focused on the long-term trend, not just the short-term trend. You see, a lot of scalping and day trading strategies that we learn in the very beginning are centered around patterns and theories that have to do with intraday trends and intraday structures. Now, those have their place. However, if you are not using the daily chart on a day-to-day basis for all of your trades, no matter what strategies you're using, you are missing out on a very big critical piece of context. And all the professionals traders will always tell you, if you don't like the daily, you don't like the intraday either. And that's very, very important to understand because the daily chart holds keys and secrets that we need to make great trades. Whoever controls the daily, whether that's bulls or bears, will ultimately, in most cases, they will win out on a day-to-day basis. Let me show you what I'm talking about right here on the screen. If we go back to our chart at ARM, I now have the daily chart selected up here in the corner. Now, most of the time, you will be able to use common sense and you can see if I was to ask you what was the price action or what was the trend over the last few months. Well, that's pretty simple. You can see this with your eyes that over the last few months, ARM has gone up in a very steady trend. So, that's obvious. The trend is up, meaning bulls are in control. That's the trend bias. Now, if there's any doubt or there's any confusion, let's call it a fail safe. You can always go to your indicator tab and you can select moving average. simple, not X potential, not weighted, just a simple moving average, and it'll give you a line here on your chart. Now, this one says nine, but we want to come over here to the settings, and we want to move this to 50. I once did a video about this. I'll try to put it up there on the screen if I can. Now, the 50 moving average is just a visual guide when you're in doubt. Like, I can see the chart here of ARM. It's going up. But any asset that is trading above its 50 moving average, it bulls are considered to be in control and should be given the benefit of the doubt. And the further that separation is away from that 50, the stronger and more intact the trend is. So like at this point, it was a substantial difference. Anything trading below that 50 moving average or even at that 50 moving average tends to have bears in controls. So, what does this mean to you and how does the opening range reversal take advantage of it? Well, it's very simple. Dips tend to get bought on strong assets. That's the point. Rallies tend to get sold on weak assets. And let me show you how valuable and important this is. Now, if we go back to the five-minute chart here on ARM, now you see I have the fiveminute intraday selected. If I'm just paying attention to the intraday structure only, you tell me what you think this is. Bullish, bearish, strong, or weak. Well, that looks weak. I think a 100% of us can agree that does not look strong whatsoever. It's just straight down. In fact, it looks pretty aggressive. Now, when newer traders see this, or if you're only using strategies that are focused on intraday activities, you're going to look at this like I did 20 years ago, like, "Oh my god, that that's a sale. I better get my short stick out, right, and bash on that thing, or I better get out of my long because I don't want to get smoke." However, what happens to ARM? it ends up retracing all of that activity all the way back up to the highs. Right now, I'm sure you guys have seen this a ton of times if you've been trading and wondered why did it look like it was going one way and then it moved the other. Well, a big reason is because of that intraday bias. Now, it's not just off one-off occurrence. If I move forward into the next day, which is right here, we're now at the second day. I sped it forward there real quick. If you're just looking at intraday structure, you tell me what this look like. Does this look like it's bullish? Does it look like it's bearish? It looks bearish. It looks weak. It does not look like a buy. But what do you think happens with ARM, right? It goes all the way back up. Not just this time, it goes all the way back up over the previous high of day. So again, the reason that's happening is because the daily bias is strong. So if you're trading just intraday biases only, again, they have their place. I'm not saying that they don't, but if you're trading them only, you're leaving out that critical piece of context. Now, let me show you what the opposite looks like here on something like Lulu. So, if we pull up a daily chart here on Lulu, what do you see? It's substantially under the 50 moving average. Not just slightly, it's way, way below. So, this is ultra bearish price action. Not just that, it spent a considerable amount of time, like an entire month or two underneath of that 50 moving average. So that is significantly bearish. Now here is why this bias is so important to the trader and to understand because rallies will tend to hold on something like ARM but not on something like Lulu. So if I kind of move this I now back to the intraday five-minute chart. Is this not the same type of price action that ARM had? You begin with an opening cell, right? But where ARM had bounced all the way back up over the high, you begin to have a bounce here with Lulu. But let me just kind of quiz you because the daily is so weak. What do you think might happen? Is this the same quality of bounce that ARM is? Well, let's play it forward and take a look. And the answer is no. Lulu continues to go down practically the entire day. It's almost the reversed inverse relationship to ARM. Why is that? It's all from the daily. Now, once we've determined what our daily bias is, we can now move on to step number two, which is something I call the sucker step. Now, this is also referred to as things like manipulation, liquidity sweeps, liquidity grabs, tons and tons of terms for this, but I like to use the word sucker step because that's exactly what it is. The moves I've been showing you on these charts are specifically designed to sucker the inexperienced and newer traders out of their money. And that's where the edge lies with the opening range reversal. We don't want to get sucked out of our money. We actually want to make money, right? And that's all because of the famous term liquidity. Now, a lot of you are watching, you understand to some degree what liquidity is. But a lot of you might not. In simple trading terms, it's just the ease in which you can get in and out of an asset. Now, let me show you why this is important and where it becomes a problem for larger institutions and funds. So, if we go back to this ARM or the easiest way I can explain it for the sake of time, let's say I'm a big institution and I currently own 300,000 shares long of ARM, but I'd really like 600,000. But the problem is there's not enough sellside volume, sellside 300,000 activity for me to get this 300,000 share. Now, this is a basic version. There's obviously more to it, but this is exactly how business works in markets. So, what I would need to do to get the other 300,000 shares filled to get to the 600, I need to sell a significant portion of the 300,000 I already have. And I need to do that to create what appears to be a sellside event, a sucker move to get the numerous retail traders from around the world to think, "Oh my goodness, this thing's going to crash." and all of those retail traders start to sell, short sellers start to pile in, which is increasing the sell side volume. Then I need to create enough liquidity, enough volume, enough shares so I can turn around and buy back what it is I sold in the first place plus the 300,000 that I wanted to add. Now, that kind of sounds bizarre because where you and I trade, we look for patterns and indicators and we wait for a trade. An institution actually has to create the event to get in the event. Meaning if they want to buy, they have to create the sell to create the liquidity to buy and the vice versa. They have if they want to sell, they have to create a buying event to get a selling event. It sounds super weird and it is. And I'll point you again to a few videos where I explain this concept, but kind of keep that in your mind. Now, here's how we know exactly this is a sucker step and that it's most likely to get reversed, which is something I've often used, always use every day is range. What we're looking for here is going back to the daily chart and we want to determine what the daily value is. And for that, we're going to use the average true range indicator. So, we're going to click on this. And you'll see now at the bottom it has included the average true range and it says $5.73 on the right side of your screen. So this $5.73 represents an average daily move in ARM. Whether that move is up or it's down, that's a standard typical say predictable move. So to make this math easier, let's just use the figure of $6. If these opening ranged moves, opening from the bell, opening range, that's why it's called an opening range reversal. If that opening range move exceeds 20% of that daily range, you are under manipulation and that stands to be reversed. Now, let me back up, slow down so everybody can follow along. You take the six bucks, 20% of six bucks is what? $120. So, as long as the top of this move to the bottom of this move exceeds $120, its manipulation and will most likely be reversed. So, if I grab a measuring tool and I measure at the top to bottom, you'll see it's already well outside of that. You're almost at 100%. You'll see it says $483, not quite 100%. But you are excessive in that range. That right there is manipulation. So what perhaps to newer traders may look like fear because that's what it's designed to do or where you may think, "Oh, I'm catching a falling knife." You're not. You're under a manipulation move that is going to be reversed. So what I'm going to do here in this part is combine number three and steps number four together. Number three has to do with the entry, the precise entry signal that we're looking at. And step number four is the exit. It'd be better if we just did all these together. Now, in my past videos, I've done nothing but talk about my two favorite candles, which is the inverted hammer and hammer candles that I've dubbed the John Wick and the Power of Towers, which is the engulfing candle to most of you. And I've explained why, and I will direct you to those videos if you'd like to watch them and learn more about those candles. But to dumb it down today and to make it as easy as I possibly can, all we really need, regardless of what the candle looks like, we need one candle to take out the high of another candle. So, in this formation, we would need a candle to take out the last candle's high. So, if I kind of move this tape forward real quick, and I'll try not to skip too far, you'll see that this is what we get. And I want to back it up just right here and focus in on this candle and kind of make it just a little bit bigger. So, what I like to do is once you've got your green candle, I like to look for the next candle to take out this candle's high. And I'll tell you why you need to do this. Because we are not sure that this tiny little green candle is the final candle or marks the low. And here's a better way to look at it. Let's go back and talk about these 600,000 shares that this institution may want. Our hypothetical as this is moving down. They can't just hit market order for all 600,000 shares, right? They're staggering their way in or scaling their way in as it moves lower. So, the further it moves, they're actually adding. That's why you're seeing the wicks at the bottom. We don't know if this order has been completely filled and this asset is ready to move up until we have confirmation that the sellside activity is done. And the only method we have is via those candles. So this is a very strong candle that allows us to know that a temporary low has been marked. What will give us the confirmation is a followth through candle. So what I would do here is I would buy at the very tip of the candle. If the next one is over it, the stop loss would be at the low of the day and the target would become 50% at least of the very top point of that move to the bottom point. So not to confuse stop is at the low of day. 50% of the move from this peak to this peak would be just about right there. and that would mark what I would be looking at from a scalping standpoint. If you wanted to be more aggressive with that, you could lean it all the way up to the top because most likely that's in fact where it will go. But just for today's example, let's stick let's just keep it simple. And that would be the trade. You'll see the very next candle does in fact push through and then you'll see eventually it finds its way to go all the way back up. Let's kind of move that out into your target. Right. And there it is. Okay. Now, here's something also to keep in mind. Once you have the confirmation, some of these will go straight back up with aggression and others will move around a little bit like this. But you must believe and trust in the process. Now, let's kind of do another trade example here using the same formula and sticking with ARM. If we move into the next day, you'll see we have pretty much the same move as we did before of what appears to be a very aggressive selloff move, right? So, what's the first thing we do? I mean, we've already determined the bias on ARM. It's strong. Bulls are in control regardless of what the intraday looks like. So, if we measure the very top of the opening move to the bottom of the move, we're probably well over that 20% threshold. It's $324, right? So, it's uh it's like 50% almost. So it's that's substantial enough. You know that the move is being manipulated. So what do we need here? We need one of these candles to retrace themselves. So if I just move forward to the next candle and let me back that up so I don't mess up the whole entire spiel here. There it is. You see right there it crosses that threshold. That becomes the entry. So I'll buy. It's a little bit of a chase there based off this platform. But what do we do? You know stop loss moves underneath the low of the day. target price goes back to 50% of this bottom move to top move, which would be about right there. And we'll just play it forward and see what happens. And you eventually get taken out, right? It's kind of the same move there as well. You'll see it doesn't always go straight up, right? There is a revisit or a retest right here. But the only reason that move right there can happen is because of the wash out before. Okay, let's try one more. So you know I'm not cherrypicking these charts. We'll move to the next day and you probably caught on there. Isn't it wild that every single day ARM is giving you this exact same move. What do we have here again? Is this not another sucker step? Because the daily chart is strong. It's most likely going to be reversed. Now this is a little bit better setup here in terms of learning because take a look at what we have here and why the power isn't waiting for that secondary candle. Notice at one point this candle was green and almost above that peak. It might be a little bit hard to see, but it didn't get above that peak. Right? So, what we would look for in this type of formation is if you have multiple candles in between, you still need to break the base of the up the upper portion of that high point candle or the next candle in it. You still have to get a move up here. So, if I kind of push that through, you'll see that that in fact does happen, right? This move gets through that upper candle. Not this candle. It was a fake. This is how you make sure you don't get faked out. But this candle was good. So, what do we do? We should already have learned. We buy. Stop loss goes under the low. Target price goes 50% up. We let the thing run. And what do you think happens? Yet again, ARM finds another way to go higher. But all of this is under three different premises. One, the daily bias. It appears that every day ARM is bearish, but it's not because the daily bias is strong and the stock is under accumulation. They keep finding ways to buy the dip, right? They're starting out with these sucker moves. And how you know you're being played and how you know you're being suckered out is they're trying to create fear to create liquidity to get into these positions by creating that 20% move. Right? Hopefully this is not going too fast, but just rewind it if you need to. By creating the 20% that that draws our attention to the trade, right? the candlestick, the candlestick closure and the candlestick pushup of the previous one lets us know that the complete order whatever that the sell-off that was engineered has come to an end and now it's free to move up or it's free to move down by following that process. We're not talking about some chart voodoo here where we're drawing lines and just trying to guess. This is a solid strategy with a high accuracy rate that can really help you start to put some some good trades together. All right, my friends, that will conclude today's video. And as always, it is a pleasure to share my strategies and knowledge with you that I've learned along the way of 25 plus years of trading. And I do hope it's helping you and you can start to take the right steps forward. One thing I always want to mention, nothing will ever replace screen time. So try to get as much study and screen time. Every day that you can get in front of that screen is another day that you're going to learn and it's one day closer to you achieving those goals. Nothing will ever replace that. And I think you know that. the more you can do, the better off you're going to be. Now, if you have any questions about the strategy, because sometimes this stuff is a little bit confusing and we kind of move through here and there, make sure you put it down into the comment section. I'll do my best to get back to you. Now, one last thing I want to remind you of before I officially sign out is every week my wife and I put together something called the gains guide. It lists all of the best assets to trade and includes entry points, exit points, and risk management. everything you need to know along with both the technical basis and fundamental basis. It's pretty thorough, but guess what? It's also free. Doesn't cost you anything. It's just a good place to get started with a series of ideas to help get you through the week. As always, I want to thank you for watching this video. Take care. Trade well. Until the next one. Cheers.