GLOSSARY // Day Trading
Opening Range Breakout
An opening range breakout (ORB) trade enters when price clears the high or low of the session's first minutes — traders commonly define the range with the first 5, 15, or 30 minutes of trading. The premise: the opening auction and early two-way fight establish the day's initial value area, and a decisive escape from it often sets the day's direction.
The range boundaries double as the risk framework — long above the range high with a stop back inside the range, short below the range low with the mirror logic. Failure is informative too: a breakout that immediately falls back into the range is a trap signal, and many traders reverse on it.
In its first 15 minutes a gapper prints a $22.10 high and a $21.40 low. At 9:52 a.m. it breaks $22.10 on a volume surge; a trader buys at $22.15 with a stop at $21.75 (back inside the range). The stock runs to $23.60 within the hour — a 40-cent risk for a $1.45 move.
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Educational only — not financial advice. Definitions simplified for clarity; markets are messier than definitions.