Opening range breakout: how to trade the ORB strategy on index and FX CFDs

An opening range breakout (ORB) is a day-trading strategy that marks the high and low of the first 5, 15 or 30 minutes after a market opens, then trades in the direction price leaves that range. A break above the high is the buy trigger, a break below the low is the sell trigger, and the stop goes back inside the range.

In short

• The opening range is the high and low of a fixed window after the open, most often the first 5, 15 or 30 minutes.
• Index and FX CFDs can quote outside exchange hours, so you pick the open yourself: 09:30 New York for US indices, 09:00 Frankfurt for the DAX, 08:00 London for FX.
• The 09:30 New York open is 14:30 in London for most of the year, but 13:30 for a few weeks in March and in late October or early November, when the US and UK clocks are out of step.
• The stop usually sits on the far side of the range or at its midpoint, so the stop distance, and your position size, changes every day.
• On a $25,000 Classic account, two failed ORB trades at 1% risk each use $500 of the $1,250 daily loss limit.

What is the opening range?

The opening range is the high and low a market sets in a fixed window right after its session opens. The top is the opening range high (ORH) and the bottom the opening range low (ORL). For the rest of the day those two levels act as breakout triggers, stop references and, often, support or resistance.

Overnight news, orders placed before the session and early economic data all meet in the first minutes, so activity and volatility tend to peak there. Toby Crabel's 1990 book on short-term price patterns and the opening range breakout made the method widely known, and traders have since adapted it to shorter windows.

An ORB strategy bets that price which leaves the first range with force keeps going for a while. On quiet or choppy days it often breaks one side, reverses and breaks the other.

Which open should you use for index and FX CFDs?

Use the open of the underlying cash market, because that is when the main volume arrives. For US index CFDs that is the 09:30 New York stock market open. For the DAX it is the 09:00 Frankfurt cash open, and for the FTSE 100 it is 08:00 London. FX has no official open, so many FX traders anchor to the London session at 08:00 London time.

A CFD may keep quoting before the cash open, so mark the time yourself rather than trusting the first candle on the chart, and check which index CFDs your platform lists.

When does the New York open move in UK time?

The US starts daylight saving time on the second Sunday of March and ends it on the first Sunday of November. The UK and the EU change on the last Sunday of March and the last Sunday of October. In the gap weeks between those dates, New York is four hours behind London instead of five, so 09:30 New York is 13:30 in London.

In 2026 the gap weeks run from 9 to 27 March and from 26 to 30 October. In 2027 they run from 15 to 26 March and from 1 to 5 November. Check your chart's time zone as well: if your 15-minute candles do not start exactly at 09:30 New York, the first candle of the session is not your opening range.

How do you trade an opening range breakout step by step?

Mark the high and low of your chosen window, wait for the window to close, then enter when price breaks one side, with the stop on the other side or at the midpoint. Set a target and a time to exit before the session ends, and decide all of it before the open.

Should the opening range be 5, 15 or 30 minutes?

A 5-minute range is narrow, so the stop is small and the position large, but opening noise breaks it often. A 30-minute range gives fewer, slower signals, and on US indices it ends at 10:00 New York, the moment some US data comes out. The 15-minute opening range breakout sits between the two. Choose one window and keep it; switching after you have seen the day's chart only fits the past.

Where do you enter?

A buy stop order a fraction above the ORH catches every breakout, false ones included. Waiting for a candle to close outside the range filters some false breaks at a worse price. Waiting for price to break out, come back and hold the ORH as support gives a better price but misses the strongest moves.

Where does the stop go?

The usual stop is just beyond the far side of the range. A midpoint stop halves the distance, so you can trade twice the size for the same dollar risk, though a retest of the range takes it out more often. Either way, the size comes from the stop: dollar risk divided by stop distance.

Where do you take the trade off?

The common exits are a fixed multiple of the risk (2R, where R is the amount you risk), a measured move equal to the range width added to the breakout level, and a time exit, often before midday New York when US index mornings tend to lose energy. Compare the target with the stop using the risk-reward ratio before you enter.

Which filters help an ORB strategy avoid false breakouts?

Filters remove days when a breakout is more likely to fail. The useful ones look at the size of the range, the direction of the larger trend, the economic calendar and how many attempts you allow. Each filter also removes some winners, so test one at a time on past charts before you rely on it.

• Compare the range with the average true range (ATR), the average daily high-to-low distance, usually over 14 days. With a 14-day ATR of 80 points, a 14-point range is 17.5% of a normal day. A range that already covers half the ATR leaves less room to run, and a very narrow one may break on noise.
• Take breakouts only in the direction of the daily trend.
• Check the calendar. US inflation and jobs reports come out at 08:30 New York, an hour before the cash open, and some surveys at 10:00 New York, just as a 30-minute range closes.
• Allow one or two attempts a day. If a long is stopped out, a short below the ORL can be your second and last trade.
• If nothing has broken out by late morning New York, skip the day.

Why do opening range breakouts fail?

Most failures are false breakouts: price pokes through the range, triggers the orders resting just beyond it, then falls back inside. They happen most on days without clear news, on narrow ranges where the market is undecided, and on breaks against the higher-timeframe trend. Spreads can also be wider in the first minutes, which makes a tight stop easier to hit.

A candle close outside the range filters many of those pokes, at the cost of a worse entry. Some traders trade the failure itself, selling towards the ORL after price breaks above the ORH and closes back inside; that is a separate setup with its own stop and target. Simple setups that many people watch can also weaken over time, so test any ORB rules on recent charts.

Worked example: a 15-minute ORB on a US index CFD

This example uses a $25,000 Classic account with a $1,250 daily loss limit, a plan to risk 1% ($250) per trade, and a cap of two attempts a day. Prices are for illustration, and the CFD is US500cash, worth $0.50 per index point (a move of 1.0) per lot on CMC Funded, with volume in whole lots; contract sizes differ by symbol, so check the specification before a real trade.

1. The window is 09:30 to 09:45 New York, which is 14:30 to 14:45 in London (13:30 to 13:45 in the gap weeks).
2. The range runs from 6,498.0 to 6,512.0, so it is 14 points wide. With a 14-day ATR of 80 points, the range is 17.5% of a normal day and passes the filter.
3. You place a buy stop at 6,512.5, half a point above the ORH.
4. The stop goes at 6,497.5, half a point below the ORL, 15 points from the entry.
5. Size: $250 ÷ (15 × $0.50) = 33.3 lots, rounded down to 33. The risk is 33 × 15 × $0.50 = $247.50.
6. The 2R target is 30 points above the entry, at 6,542.5, worth 33 × 30 × $0.50 = $495. The measured-move target is 6,512.0 + 14 = 6,526.0, which is 13.5 points above the entry and worth 33 × 13.5 × $0.50 = $222.75, about 0.9R.
7. The time exit is 11:30 New York. If neither the stop nor the target has been hit and price is at 6,520.0, you close for 7.5 × 33 × $0.50 = $123.75.

With a midpoint stop, the stop goes at 6,504.5 (half a point below the 6,505.0 midpoint), 8 points from the entry. $250 ÷ (8 × $0.50) = 62.5, so you trade 62 lots and risk 62 × 8 × $0.50 = $248. The 2R target is 16 points away at 6,528.5, worth $496. The dollar risk is almost the same, but a retest of the range now stops you out more often.

These figures are before costs. Simulated trades carry trading costs, as they would on a live account: a commission when a trade opens and when it closes, a price markup on some symbols, and holding costs on positions kept overnight.

How the opening range breakout works on CMC Funded

The daily loss limit sets how many ORB attempts you can afford. It is measured on equity, so an open trade's floating loss counts before you close it, and reaching the limit ends the account. Each day it is 5% (Classic) or 4% (Direct) of your equity at the start of that day, so it moves with your account. The table shows the first day.

In the worked example, a false break above the ORH costs $247.50, and a failed second attempt below the ORL costs another $247.50. That leaves $755 of the limit on the $25,000 Classic account, or $505 on a $25,000 Direct account. If the second trade is still open and $200 against you after the first loss, $447.50 of the limit is already in use.

The maximum loss is fixed. On a $25,000 Classic account the floor is $22,500, so ten losses of $247.50 ($2,475) leave $25 of room. On a $25,000 Direct account the floor is $23,500, and six losses of $247.50 ($1,485) leave $15.

News trading is allowed, though price can jump past a stop when data comes out. Overnight holding is allowed too, with holding costs, which an intraday plan avoids by closing before the session ends.

Leverage is chosen at purchase, from 1:10 to 1:500. It changes the margin a position needs, not the dollars you lose per point, so it does not change the sizing above. Higher leverage magnifies both gains and losses. The margin calculator shows the margin for a given size. Neither route has a time limit, so you can skip any day when the range fails your filters.

Common mistakes

• Entering before the window has closed. A 15-minute range is not set until the 15 minutes are over.
• Marking the range from the CFD's first candle of the day instead of the cash open, or missing that 09:30 New York moves to 13:30 London in the gap weeks.
• Trading the same size every day. The range width changes, so a fixed size means a different dollar risk each day.
• Taking every break in both directions all day. A cap of two attempts stops a choppy session from eating the daily loss limit.
• Holding a failed breakout into the afternoon in the hope it comes back, instead of using the time exit.
• Ignoring the 08:30 and 10:00 New York data times when planning a US index trade.

Questions traders ask

What is the success rate of opening range breakout trades?

No reliable single success rate exists. Results change with the market, the window length, the entry and stop rules, the filters and trading costs, and many published backtests test so many combinations that some look good by chance. Record your own ORB trades under fixed rules for at least 30 to 50 trades, then judge the result.

Does the opening range breakout work on forex?

It can, with an adjustment. FX trades around the clock on weekdays, so there is no exchange open to anchor to. Many FX traders use the London session start at 08:00 London time, and some also use the New York open for USD pairs. Ranges in FX majors are often tighter than on indices, so size from the stop each time.

What is the 3-5-7 rule in trading?

It is a rule of thumb that circulates online, and versions differ. A common one says to risk at most 3% on one trade, keep total risk across open trades under 5%, and make winners at least 7% larger than losers. On a Direct account with a 4% daily loss limit, a 3% loss plus a second open trade could reach the limit, so the numbers need scaling down.

Next steps

The trading sessions lesson explains how the Asian, London and New York sessions overlap, and the guide to swing trading vs day trading helps you decide whether an intraday strategy suits you. Use the position size calculator to size each day's range, and check the Classic and Direct rules for your account's daily loss limit.

The account sizes and routes are on the challenges page.