Charting the Toby Crabel Opening Range Breakout: A Visual Guide

A Picture is Worth a Thousand Pips

For the visual trader, a well-configured chart is an indispensable tool. When it comes to trading the Toby Crabel Opening Range Breakout (ORB), a clean and uncluttered chart can make the difference between a winning and a losing trade. This guide will walk you through the process of setting up your charts to effectively trade the ORB, from identifying the opening range to placing your entry and exit orders.

The Anatomy of an ORB Chart

An effective ORB chart should clearly display the opening range, the breakout levels, and the initial stop loss. The opening range is typically defined as the high and low of the first 30 or 60 minutes of the trading session. This can be drawn on the chart as a simple rectangle. The breakout levels are the high and low of this rectangle. The initial stop loss is often placed at the midpoint of the opening range.

Charting the Breakout: ES Mini Case Study

Let's consider a hypothetical ORB trade on the E-mini S&P 500 futures (ES). The opening range for the first 30 minutes is from 4500 to 4510. The opening range high is 4510, and the low is 4500. A buy stop is placed at 4510.25, and a sell stop is placed at 4499.75. The price breaks out to the upside, triggering the buy stop. The initial stop loss is placed at the midpoint of the opening range, 4505. The chart would clearly show the rectangle representing the opening range, the breakout level at 4510.25, and the stop loss at 4505.

The Role of Confirming Indicators

While the ORB can be traded on its own, some traders prefer to use confirming indicators to increase their confidence in a signal. A volume-based indicator, such as the on-balance volume (OBV), can be used to confirm the strength of a breakout. A rising OBV on an upside breakout would be a bullish sign, while a falling OBV on a downside breakout would be a bearish sign. A momentum indicator, such as the Relative Strength Index (RSI), can also be used to confirm a breakout. A rising RSI above 50 would be a bullish sign, while a falling RSI below 50 would be a bearish sign.