The Quantopian Podcast Quant Radio: Opening Range Breakout for Stocks in Play
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Dec 26, 2024 Dive into the thrilling world of the Opening Range Breakout strategy, where the first five minutes of trading can set the tone for the day! Learn how traders pinpoint 'stocks in play' and leverage algorithms to make quick decisions. Explore how Average True Range aids in setting stop-loss orders to mitigate risk. Discover the contrasts between backtesting and live trading as you navigate market complexities. This discussion is packed with insights on data analysis, risk management, and the essential blend of technology and trader intuition!
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Opening Range Breakout (ORB)
- The Opening Range Breakout (ORB) strategy uses the first five minutes of trading to predict stock movements.
- This period is crucial as it represents price discovery where buyers and sellers establish the initial range.
ORB Performance
- Research from 2016 suggests ORB outperformed buy-and-hold by 15%.
- Past performance doesn't guarantee future returns, and ORB's effectiveness depends on market conditions.
Stocks in Play
- ORB focuses on "stocks in play" with high trading volume due to news or earnings reports.
- This high volume indicates increased interest and potential volatility.