There are many ways to trade Opening Range Breaks (ORB) with Trade Unafraid.
On August 16th, trading TSLA on the break of the 5min ORB would have resulted in a very solid trade. Let's go over how to configure this setup with Trade Unafraid. In this TSLA trade, we will look to go short on the break of the Opening Range low.
|TSLA ORB short on August 16th|
Next, I entered TSLA as the symbol. In this screenshot (above), I have chosen to trade the nearest expiration options, where I have selected "front" expiration Puts. More on that in the next image...
In this trade plan, I have enabled the entire front-expiration option chain and configured it to choose the option with the tightest spread.
On the right side of the form are two option filters configured first to only allow an option with a 5% spread or better, and second to select an option that will result in a quantity of contracts from 2 to 5, taking into account the dollars allocated to the trade (see below). If no options are found which meet these criteria, then the trade will not be taken. This keeps you out of unfavorable trades or unfavorable instruments.
Next, I configured the setup. I have selected ORB and chosen a candle duration of 5 minutes. Once the 5-minute Opening Range has been established, Trade Unafraid will set triggers to enter at the top and bottom of that range. Of course, you are free to choose any duration you prefer for the Opening Range.
Lastly, I selected an entry tactic. Here, I have selected a market order and have specified a trade size of $2500. The number of contracts will be between 2 and 5 as specified earlier (meaning an option price from 5.00 to 12.5), choosing the option with the tightest spread, and only if the spread does not exceed 5% of the option price.
Sometimes, it might be beneficial to add a little more confirmation along with an ORB. Sometimes you will see price break the Opening Range and never look back, as can be seen in the chart below.
|FB August 16th|
With Trade Unafraid, you can have the system enter upon the occurrence of specific candle sequences. This setup is very useful if you trade The Strat. What I'll show next is how to configure a trade plan that will enter on the break of the low of an inside bar (1-2d) below the Opening Range or on any candle sequence with the break of the prior high followed by the break of the prior low (2u-2d). In this case, I am looking only at 5-minute candles.
In the image above, I have selected the Candle Pattern setup. This setup can watch for multiple patterns at the same time (bottom rows in the image). Each row represents a different candle pattern, and additional patterns can be added with the green plus sign. Any row can be deleted with the blue circled X.
Lastly, I set the trade plan to be "Repeating." This tells the trade plan to keep setting up over and over again, each time a trade has been closed or filtered out. If Repeating is not checked, then a setup that triggers but does not pass the setup filter will not be taken, and the trade plan will terminate. With Repeating checked, rather than terminating the trade plan after the setup filters out, Trade Unafraid will instead start looking again for a new setup.
There are a number of Restart configurations to choose from. For example, maybe you only want to take the first two setups that occur during the day. Setting max trades to 2 would allow this.
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