Day First Candle Breakout

The Day First Candle Breakout indicator identifies potential breakout opportunities based on the high and low of the initial trading range of a session. It provides traders with a systematic way to visualize the opening range and gauge trend strength relative to historical price levels like the previous day's or week's high and low.

Usage

The Usage section focuses on identifying price expansions beyond the initial morning volatility.

• Buy Signal: Potential long opportunities occur when the price breaks and closes above the high of the defined opening range.
• Sell Signal: Potential short opportunities occur when the price breaks and closes below the low of the defined opening range.
• Trend Context: The indicator plots the previous day's high (PDH) and low (PDL). If the current breakout occurs while the price is above the PDH, it suggests a stronger bullish trend. Conversely, staying below the PDL indicates a stronger bearish environment.
• Range Analysis: The script calculates the percentage move between the high and low of the opening range and compares it to the average range of the last 20 days. This helps traders identify if the current morning range is unusually narrow or wide.

Details

This tool implements an Opening Range Breakout (ORB) methodology. It captures the high and low prices of a user-defined timeframe starting from the market open. The script utilizes request.security to fetch the high/low data for the specific range and calculates a moving average of the range percentage over several days. This allows for a relative volatility assessment, helping traders avoid "noise" when the opening range is excessively large compared to historical averages.

Settings

Opening Range Breakout (ORB)

• Show Opening Range High/Low: Toggles the visibility of the horizontal levels representing the first candle's range.
• Show Percentage Move Between High and Low: Displays a label indicating the current range percentage and the historical average.
• Select Opening Range Candle (in minutes): Defines the duration of the opening range (e.g., 5, 15, or 60 minutes).
• Average of no of Day's ORB Candle Range: Determines the lookback period for calculating the average percentage range.

Label Settings

• Label Size: Adjusts the text size of the information label.
• Label Style: Changes the visual anchor point of the label (left, right, up, down).
• Label Position: Determines where the label sits relative to the opening range (High, Low, Center, or Auto).

FAQ

How do I use the percentage move label?

The label shows the current opening range as a percentage of the price. If the current percentage is significantly lower than the "Last D Avg," it may indicate a "Volatility Squeeze," which often leads to more explosive breakouts.

Can I set alerts for breakouts?

Yes, the script includes built-in alert conditions for when the price closes above the Opening Range High or below the Opening Range Low.

How can I access this tool?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.