BP Opening Range Breakout

ORB is an intraday strategy that trades the breakout from the high or low established in the first N minutes of a trading session. Breakout above the opening range high = long; breakout below opening range low = short.

30 minutes is recommended for BP. It balances reliability (not too narrow) with opportunity (not too wide). Some traders use 15 or 60 minutes depending on preference.

Many breakouts are 'false' - price exceeds range then reverses. Waiting for candle CLOSE beyond range (not just wick) significantly reduces false breakouts. Volume confirmation adds further filter.

Stop goes at the opposite side of the opening range. Long trade: stop below Opening Range Low. Short trade: stop above Opening Range High. If price reverses through entire range, the breakout failed.

Standard target is 2× the range width. If range is $0.40, target is $0.80 from entry. Conservative traders use 1× range (higher hit rate). Aggressive traders target 3× range (lower hit rate).

Oil is BP's primary driver. Check oil's opening range too. BP breaking out with oil confirming = higher probability. BP breaking out but oil diverging = lower probability - reduce size or skip.

Range quality compares opening range width to ATR. Good quality: 25-75% of ATR. Too narrow (<25%): Likely to expand, more false breakouts. Too wide (>75%): Day's move may be exhausted.

Large gaps affect probabilities. Gap + breakout in gap direction = may be extended (reduce size). Gap + counter-breakout = often higher probability (trapped traders). Small gaps = normal ORB.

Exit immediately if price closes back inside range. Don't wait for full stop. Quick exit limits loss. Can potentially reverse and trade the opposite direction (false breakout reversal).

US session (9:30 PM - 4:00 AM SGT) typically has higher volume and cleaner breakouts for BP ADR. London session (4 PM start) is also viable. Session overlap offers best liquidity.

Calculate OR_High and OR_Low from first 30 min. Filter by ATR ratio (0.25-0.75). Signal on close beyond range + buffer + volume confirmation. Add oil filter. Stop at opposite range, target at 2× range. Time exit before session end.

Scale position inversely with volatility. Normal vol: 2% risk. High vol (>1.25× ATR): 1.5% risk. Very high vol (>1.5× ATR): 1% risk or skip. Low vol: can use 2.5%. Volatility affects range reliability.

Buy calls on confirmed long breakout, puts on short breakout. Use OR levels for strike selection. 0DTE for aggressive plays (high gamma). Spreads reduce cost. Defined risk without stop hunting issues.

Watch time and sales at range boundaries. Large prints = institutional participation. Absorption (large orders, no move) = pending breakout. Exhaustion (decreasing order size) = potential failure. Level 2 shows order book depth.

Per trade: 2% risk. Max simultaneous positions: 2. Total intraday risk: 6%. All positions closed by session end. Track performance by session, gap type, volatility regime. Diversify ORB across sectors to reduce correlation.