Opening range breakout, scalper's edition

[Shadow Trader]

The opening range method marks the high and low of the first 15 to 30 minutes after a session opens, such as London at 8am, then trades a break of either side.

The logic appeals. The range reflects early participants' views, and a break shows a decision. Scalpers use shorter ranges, often 5 or 10 minutes, with tight stops just inside the range.

Challenges are plentiful. False breakouts abound, particularly in the first minutes. Spreads are wide at the open. Direction can reverse quickly.

Filters improve results. A requirement for a candle close beyond the range, a minimum range size and a check of the higher timeframe trend each reduce false signals.

The method suits days with a strong trend and fails on range days, so day classification helps.

Journaling results by pair and session shows where the method works. Some pairs respect opening ranges well, while others are noisy.

Has any version of the opening range approach been tested here, and which pair suited it best?

[Amanhasnoname]

I spent most of last winter testing a 10-minute London opening range on EURUSD and GBPUSD side by side, and the difference between the two surprised me. Euro respected the range far more cleanly. Cable would poke out, run my stop just inside, then go the original way anyway, which is exactly the false break problem you describe.

The filter that helped most was the minimum range size. If the first ten minutes printed less than about 12 pips on EURUSD, I didn't trade it at all, because a tiny range just meant the real decision hadn't happened yet. I also stopped entering on the first tick through the level and waited for a one-minute close beyond it, which cost me a little on the good days but saved a lot on the fakeouts.

Day classification was the part I underrated. When the Asian session had already trended, the opening range break usually just continued that move, and those were my best trades by a distance.