Open Range Breakout V0
Sep 11, 2015
The Open Range Breakout V0 indicator identifies key price levels established during the initial trading period of a session to help traders spot potential breakout and trend reversal opportunities.
Usage
The Usage section describes how the script can be used to navigate market sessions. The indicator identifies the high and low of a user-defined opening timeframe and projects "Stretch" zones based on historical volatility.
- Range Identification: The core range (TR and BR) represents the high and low of the opening timeframe (e.g., the first 60 minutes).
- Stretch Zones: The "Positive Stretch" (TS) and "Negative Stretch" (BS) levels are calculated by adding/subtracting a smoothed stretch value from the range extremes.
- Breakout Trading: Traders often look for price to break above the Positive Stretch for bullish bias or below the Negative Stretch for bearish bias.
- Mean Reversion: If price fails to hold above the stretch zones, it may indicate an exhaustion point and a potential return to the opening range.
Details
This tool utilizes request.security to fetch the high, low, and open data from a specific timeframe, which is then anchored to the start of each new trading day.
The "Stretch" component is a calculation of the maximum distance price traveled from the open (either to the high or the low) during the opening period. This value is then smoothed using a 10-period weighted average to provide more stable, volatility-adjusted breakout levels rather than relying on static percentages or fixed ticks.
Settings
- Timeframe for open range: Sets the duration of the opening period used to calculate the range and stretch levels (default is 60 minutes).
FAQ
How do I use the stretch zones?
The stretch zones act as dynamic support and resistance levels based on the volatility of the opening range. A candle closing outside these zones often signifies strong momentum.
Can I change the timeframe for the breakout?
Yes, you can adjust the "Timeframe for open range" in the settings menu to better suit different assets or trading styles (e.g., 5m, 15m, or 30m).
How can I get access to Open Range Breakout V0?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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