The 9:30 Momentum Engine
The opening range is where overnight inventory is resolved. Institutions use this window to establish directional bias for the session. Retail traders often jump in early without confirmation, getting chopped inside the range. Institutions wait. Once direction is clear, they press size aggressively, creating momentum that retail traders chase too late. ORB works because it lets institutions reveal their hand before committing capital.
The setup is mechanically simple: define the high and low of the first 5 minutes after 9:30 AM ET. That range represents the initial battle between buyers and sellers. The trade triggers when price closes decisively outside the range, ideally with increasing volume and momentum. Entries are taken on either the breakout close or the first pullback to the range boundary.
Typical risk-to-reward sits between 1:1.5 and 1:3. Stops are placed on the opposite side of the opening range. If price re-enters the range, the breakout thesis is invalid. This strategy appears 3–5 times per week, but only 1–2 days usually offer clean continuation.
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Firm's Note: The key insight pros learn: skip narrow ranges. Tight opening ranges produce the best expansions.
ORB is excellent for evaluations because it's time-boxed. Losses are limited, discipline is enforced, and emotional overtrading is reduced. In chop, no breakout = no trade.