Trading term

What is Opening range breakout?

An opening range breakout (ORB) is a day-trading strategy. You mark the high and low of the first few minutes after the market opens, then trade in the direction price breaks out of that range.

The opening range is the high and low of the first 5, 15, 30 or 60 minutes of the session. A move above the high is a buy signal and a move below the low is a sell signal. The stop usually goes at the other side of the range, and the trade is closed by the end of the day.

The idea is that the first minutes of trading set the day's direction. Most trades lose a little at the stop. The strategy relies on the few days that trend all day to pay for them.

For example

The Nasdaq 100's first 5-minute candle closes up, so you buy at 09:35 New York time with a stop at that candle's low. Run on every session from 2011 to 2026, that rule won about 23% of trades and made about 3 basis points (0.03%) a trade on average, before costs.

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Why it matters to you

The ORB is one of the few day-trading rules with published research behind it. But its edge per trade is small, so leverage and trading costs decide whether it makes money.

⚠ Ignoring costs

A strategy that makes 0.03% a trade can be wiped out by a spread, a commission or a stop that fills a cent or two worse than planned.

Frequently asked questions

Does the opening range breakout work?

In our test on the Nasdaq 100 from 2011 to 2026 it had a small edge before costs. With the leverage the best-known paper used, about 1 basis point of costs a trade was enough to drop it behind simply holding the index.

What's the best time frame for an opening range breakout?

Shorter ranges win less often but with bigger winners. In our test the 5-minute range had the largest average edge, but none of the 5, 15, 30 or 60-minute ranges made more than about 3 basis points a trade.

Read the full guide

Technical analysisDoes the Opening Range Breakout Work? 15 Years of Nasdaq Data, TestedWe ran the 5-minute opening range breakout on every Nasdaq 100 session since 2011. It has an edge, about 0.03% a trade. Here's what costs and leverage do to it.10 min read

Related terms

All-time highAn all-time high is the highest price a market has ever reached. Traders often measure it by the closing price, so one brief spike doesn't count.Anchored VWAPAnchored VWAP is a volume-weighted average price that starts from one candle you choose, rather than resetting at the start of each session. You anchor it to a meaningful event — an earnings gap, a major low, a breakout — and it tracks the average price everyone has paid since.APY (annual percentage yield)APY is the rate you actually earn over a year once your interest starts earning interest of its own. It's the same money as the quoted rate, just counted properly: 5% APR compounded monthly works out to 5.1162% APY.Ascending triangleAn ascending triangle is a bullish continuation pattern: a flat horizontal resistance line on top, with a rising trendline of higher lows beneath it. As the higher lows squeeze price against the ceiling, pressure builds — and it usually resolves with a breakout up through the resistance.
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