5 Minute Opening Range Breakout Alert (ORU5)

What is an opening range breakout?

The opening range is the high and low of the first candle of the day. With the 5 minute alert, that is the first five minutes. An opening range breakout is the first time price trades above that high.

The idea is to let the open settle down, mark the range, and see which way the stock leaves it.

Parts of an opening range breakout

First candle

The first 5 minutes set the range. Trade Ideas uses the high and low of that candle.

Range high

The top of the first candle. Above it is the breakout level.

First break

The first trade above the range high triggers the alert. Later crosses on the same day do not.

How traders use it

Step 1: Let the Trade Ideas alert find it

Turn on the 5 Minute Opening Range Breakout alert (ORU5). Trade Ideas marks the first 5 minute candle on every stock and alerts on the first break above it. See it live in the Web Dashboard.

Step 2: Wait for the trigger

Trader tip

The alert is the trigger. Some traders want a full candle to close above the range high too.

Step 3: Entry

Many buy the break or a retest of the range high a few minutes later.

Step 4: Exit

The middle or bottom of the opening range is a common stop. Plenty of ORB traders work this way, though it is no recommendation.

Tips

• Narrow opening ranges give tighter stops. Wide ones need more room.
• 15 minutes is the most popular range length. Trade Ideas offers 1, 2, 5, 10, 15, 30 and 60.
• Relative volume helps separate real moves from noise.
• The downside alert is Opening Range Breakdown (ORD5).

Past results, including backtests, are not indicative of future results.

How the 5 Minute Opening Range Breakout alert works

Trader tip

These alerts define support as the lowest point in the first candle of the day. Resistance is the highest point in the first candle. The first time we break above resistance, that's an opening range breakout. The first time we break below support, that's an opening range breakdown. You can choose between 1, 2, 5, 10, 15, 30 and 60 minute candles. 15 is the most popular choice, but they are all valid.

Many trading strategies tell the trader to watch a stock closely from the open, but not to make any trades until the market has settled down. Wait for the stock to choose a direction. Use the size of the first candle to tell you how much the stock has to move before it has selected a direction.

Example

These alerts automate the strategy described above. Instead of watching one stock closely, let our software search through the entire market to tell you what's hot. Scans like these monitor all stocks on various time frames. Let's say, for example, that you don't like to start trading until 10 o'clock. Bulls and bears will become obvious at that time if you watch the 30 minute opening range breakouts and breakdowns. In addition to picking individual stocks, you can use the alerts to get a feel for the overall market. Gauge the strength or weakness of the market based on the number of breakouts vs. breakdowns that you see.

These are powerful alerts because the stock price must pass through two forms of support or resistance. A breakout alert only occurs when the stock price breaks above the high of the first candle, for the first time all day. That means that the stock is also making new daily highs at the same time as it is crossing the resistance line described above. For the same reason, a breakdown alert means that the stock is making new lows for the day at the same time as it is passing through the support described above.

Keep in mind

Note: Each stock has its own clock. We start the clock when a stock has its first print of the day. For NYSE stocks we ignore any prints before the specialist opens the market.

Default settings

By default, the 5-minute opening range breakout alert is automatically triggered when a stock's price breaks above resistance for the first time during the trading day. To align with each alert, it's essential to utilize the corresponding time frame on the chart. For instance, the 5-minute opening range breakout is visualized on the 5-minute candlestick chart.

What the alert shows you

Key point

The description column of this scan will display "Opening Range Breakout (5 minutes)", providing you with a clear indication of the specific alert that has been triggered.

Related alerts

• 5 Minute Opening Range Breakdown alert (ORD5)
• 15 Minute Opening Range Breakout alert (ORU15)
• 1 Minute Opening Range Breakout alert (ORU1)
• Gap Up Reversal alert (GUR)
• False Gap Up Retracement alert (FGUR)

Filters to pair with the 5 Minute Opening Range Breakout alert

• Position of Open filter
• Change from the Open filter
• Relative Volume filter
• Gap filter

Categories

• Fixed Time Frame alerts and filters
• Single Print alerts and filters

FAQ