| OCT 1988
Opening range breakout: early entry Part 2 by Toby Crabel
Opening range breakout: early entry Part 2 by Toby Crabel Early entry is defined as a large price movement in one direction within the first five minutes after the open of the daily session. A study of early entry is essentially a study of price action, and the type of price action that takes place on early entry shows that participants are urgent about entering the market. It is a distinct recognition of either a profitable or dangerous situation. It should be noted that directional moves of this nature are relatively rare and may occur only 10% of the time. Most days (70% to 80%), prices exhibit rotation or choppy action and the first five to 10 minutes of trading are sluggish and directionless without a clear movement away from the opening range. The early entry price action is ideal when using an opening range breakout for entry. An opening range breakout is a trade taken at a predetermined amount above or below the opening range. The open should act as one extreme of this range. Two versions I have observed two types of early entry. The characteristics of Type 1 (Figures 1 and 2) are as follows: The first five minute time period has a larger range than normal. (""Normal"" is roughly defined as the average of the preceding 10 days' first five-minute ranges.) The opening of the day is on one extreme of the five-minute bar and the close of the five-minute bar is on the opposite extreme. The second five minutes shows an equal thrust in the direction of the first five-minute period.
by Toby Crabel
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.