The Opening Range Breakout (ORB) is a popular trading strategy that involves identifying the high and low of the opening range for a given period, and then buying or selling when the price breaks through either of these levels. Here's how the ORB strategy works:


Identify the Opening Range: The opening range is the highest and lowest price range within the first few minutes after the market opens. Traders need to identify this range and mark the high and low levels.


Wait for a Breakout: Once the opening range is identified, traders need to wait for a breakout to occur. If the price moves above the high of the opening range, it is a buy signal. If the price moves below the low of the opening range, it is a sell signal.


Set Stop Loss and Take Profit: Once a breakout occurs, traders should set a stop loss order just below the low (for a buy trade) or just above the high (for a sell trade) of the opening range. This will limit the amount of loss in case the trade goes against them. Similarly, they should set a take profit order at a reasonable level to secure profits.


Manage the Trade: Traders need to monitor the trade carefully and be prepared to close the trade if the price moves against them. They should also move their stop loss orders to lock in profits if the price moves in their favor.


The ORB strategy works well in markets with high volatility, such as the stock market. It is a simple and effective way to take advantage of the market's opening volatility and can be used for both short-term and long-term trades. However, it is important to note that this strategy is not foolproof and should be used in combination with other indicators and strategies to ensure profitability. Additionally, traders should always have a well-defined risk management plan in place to minimize losses.