Day Trading

Day Trading

Rules for buys:
1. Today the stock did all of the following:

• Made a 52 week high, historical high is even better.
• Today's range was the largest in the previous 10 trading days. A gap up is even better.

2. Buy tomorrow on an opening range breakout (ORB) to the upside.
3. The initial stop is the low of the opening range. I use the 13 bar EMA on a 5 minute chart as trailing stop.
If a stock never breaks the trailing stop and close near the high of the day, I hold at least half of the position overnight.

Opening range breakout (ORB)

Stocks form an opening range (OR) in the first 15-30 minutes of trading. Valid ORBs often meet one or more of the following conditions:

• ORB occurs between 9:50am and 10:10am.
• Low volume in the OR and high volume on the breakout.
• OR is narrow and flat.

In my main strategies, the stock is trading at a 52 week high, it has broken out again after at least an intraday consolidation on Day 1, The stock should be in a strong industry group and it just released positive news. I have both the technical and fundamental sides working for me in the immediate short term, and the path of least resistance after the ORB is likely to be up.