3 Ways To Trade Opening Range Breakout In 30 Seconds

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Trading opening range breakout can be a lucrative strategy for day traders, as it allows them to capitalize on the market's initial momentum. The opening range breakout is a popular trading strategy that involves identifying the high and low prices of a security during the first 30 minutes of trading, and then taking a position in the direction of the breakout. Here, we'll discuss three ways to trade opening range breakout in 30 seconds.

Understanding the Opening Range Breakout Strategy

The opening range breakout strategy is based on the idea that the market's opening range sets the tone for the rest of the day. By identifying the high and low prices during this period, traders can establish a range that can be used to determine the direction of the breakout. The strategy involves waiting for the market to break out of this range, and then taking a position in the direction of the breakout.

Method 1: Trading the Opening Range Breakout with a Simple Moving Average

One way to trade the opening range breakout is to use a simple moving average (SMA) to help identify the direction of the breakout. Here's how to do it:

• Set the opening range high and low prices as the resistance and support levels, respectively.
• Plot a 20-period SMA on the chart to help identify the trend.
• If the price breaks out above the opening range high, take a long position if the SMA is also above the price.
• If the price breaks out below the opening range low, take a short position if the SMA is also below the price.

Benefits of Using a Simple Moving Average

Using a SMA to trade the opening range breakout can help traders identify the direction of the trend and make more informed trading decisions. The SMA can also help traders filter out false breakouts and avoid taking unnecessary risks.

Method 2: Trading the Opening Range Breakout with Bollinger Bands

Another way to trade the opening range breakout is to use Bollinger Bands to help identify the volatility of the market. Here's how to do it:

• Set the opening range high and low prices as the upper and lower Bollinger Bands, respectively.
• Plot the Bollinger Bands on the chart to help identify the volatility of the market.
• If the price breaks out above the upper Bollinger Band, take a long position if the market is trending upwards.
• If the price breaks out below the lower Bollinger Band, take a short position if the market is trending downwards.

Benefits of Using Bollinger Bands

Using Bollinger Bands to trade the opening range breakout can help traders identify the volatility of the market and make more informed trading decisions. The Bollinger Bands can also help traders filter out false breakouts and avoid taking unnecessary risks.

Method 3: Trading the Opening Range Breakout with the RSI Indicator

A third way to trade the opening range breakout is to use the Relative Strength Index (RSI) indicator to help identify overbought and oversold conditions. Here's how to do it:

• Set the opening range high and low prices as the resistance and support levels, respectively.
• Plot the RSI indicator on the chart to help identify overbought and oversold conditions.
• If the price breaks out above the opening range high, take a long position if the RSI is below 70.
• If the price breaks out below the opening range low, take a short position if the RSI is above 30.

Benefits of Using the RSI Indicator

Using the RSI indicator to trade the opening range breakout can help traders identify overbought and oversold conditions and make more informed trading decisions. The RSI indicator can also help traders filter out false breakouts and avoid taking unnecessary risks.

Conclusion

Trading the opening range breakout can be a lucrative strategy for day traders, as it allows them to capitalize on the market's initial momentum. By using a simple moving average, Bollinger Bands, or the RSI indicator, traders can make more informed trading decisions and filter out false breakouts. Remember to always use proper risk management techniques and to stay disciplined in your trading approach.