Wednesday, September 16, 2009

Anatomy of an ORB bounce

Yesterday I bought at very nearly the low the of the day. I did this because of a price/ time relationship I have found to be extremely effective in entering the market. If you calculate the opening range and create a fibonacci extension over it, you will find prices tend to stop or even reverse once they hit these levels. Yesterday it was the 161 level. Often times this is the most probable level which price will bounce from as it is the first extension level from a breakout. 

What adds even more probability to the bounce is the hourly pivot. Yesterday the hourly pivot was below the 161 fibo extension level. If price stays above this level you can almost guarantee a very swfit and profitable bounce. Which we got with a clean 90 pips possible profit.

*Note there is a second way to play the Opening Range Breakout. One which is even more profitable and immediate in its rewards. You wait for a very small opening range, such as today in the Euro (only 24 pips) and enter on the first close outside the range. I am reasonably confident today's move will be swift and substantial.


stock news said...


Key benchmark indices are expected to start flat to positive due to gains in Asia markets. Reliance, the country's top-listed firm is offering about $12 billion to buy a controlling interest in LyondellBasell, and the deal if closed will make it one of the largest overseas acquisitions by an Indian company could spur investor sentiment. The equities may remain volatile over the next few days as trader’s rollover positions in the derivative segment from November 2009 series on Thursday, 26 November 2009.

According to data released by the NSE, in the last session, FIIs were sellers of index futures to the tune of Rs 395.8 crore while bought index options worth Rs 809.55 crore. They were net sellers of stock futures to the tune of Rs 725.39 crore while bought stock options worth Rs 13.66 crore.

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Madeleine Houghton said...

For sure