Drip's 11am rule breakout/breakdown (OG) — Indicator by sensir (2024)

FAQs

Drip's 11am rule breakout/breakdown (OG) — Indicator by sensir? ›

This indicator is based on Drippy2hard's 11:30 am (EST) rule. In simple terms the rule states that: If a trending stock makes a new high after 11:15-11:30am EST, there is a 75% chance of closing within 1% of High of day (HOD).

Identifying breakouts

These tools also aid in determining a strong trading strategy. Indicators such as Moving Averages, RSI and MACD can be used to measure the strength of the breakout. Volume: An important factor to identify a breakout is the trading volumes of the stock.

What Is the 11am Rule in Trading? If a trending security makes a new high of day between 11:15-11:30 am EST, there's a 75% probability of closing within 1% of the HOD.

The Opening Range breakout indicator will plot the high low range for a security during the first minutes of the regular session. For example, you may plot the initial 5, 15 or 30 minutes. One may then identify breakout scenarios when prices move above or below the chosen range.

ORB stands for "Opening Range Breakout" which is a common trading strategy. The indicator can analyze the market trend in the current session and give "Buy / Sell", "Take Profit" and "Stop Loss" signals. For more information about the analyzing process of the indicator, you can read "How Does It Work ?"...

By utilizing the Average True Range (ATR) indicator and Simple Moving Average (SMA), it detects potential breakout conditions and tracks consecutive candles that remain within the breakout range.

The best technical indicators for day trading are the RSI, Williams Percent Range, and MACD. These measurements show overbought and oversold levels on a chart and can help predict where a price is likely to go next, based on past performance.

The 3–5–7 rule in trading is a risk management principle that suggests allocating a certain percentage of your trading capital to different trades based on their risk levels. Here's how it typically works: 3% Rule: This suggests risking no more than 3% of your trading capital on any single trade.

For day traders, the 11am rule suggests that the period before 11 am EST is often characterized by heightened volatility and potential for trend reversals. This presents opportunities for traders to capitalize on short-term price movements.

Traders that follow the 10 a.m. rule think a stock's price trajectory is relatively set for the day by the end of that half-hour. For example, if a stock closed at $40 the previous day, opened at $42 the next, and reached $43 by 10 a.m., this would indicate that the stock is likely to remain above $42 by market close.

What is breakout and breakdown indicator? ›

Breakout happens when price moves up after a period of consolidation and goes above recent pivot high or resistance zone. Breakdown happens when price moves down after a period of consolidation and goes below recent pivot low or Support zone. Reliability of the Breakout or Breakdown is increased with spike in volume.

This is the best way to spot a false breakout by first waiting for the candle to close. If the body closes above/below the trendlines, then it's likely to be true breakout. On the other hand if the candle doesn't close above/below, then it's likely to be false breakout.

Selecting Time Frame

Many would agree that the most common time frames to trade the opening range breakout are 15- and 30 minute time frames. Furthermore, I have found the 15-minute time frame useful for trading equities. Trading breakouts on index futures also work well on the 15-minute chart.

1. In order to measure the size of the range you should take the distance between the High/low of the closing candle in the previous trading session and the High/low of the opening candle in the new trading session. 2. The most important thing of the opening range trading is the breakout from the opening range.

Bollinger Bands help traders identify overbought or oversold market conditions. If the price breaks out of a range but fails to sustain the breakout and moves back within the Bollinger Bands, it can confirm that the breakout was false.

Breakout stocks often have a sudden surge in trading volume, which may indicate growing investor interest. Additionally, keep an eye out for stocks that are breaking through key resistance levels or forming bullish chart patterns, such as the cup-and-handle, ascending triangles or flag patterns.

Observe daily chart for additional patterns. A descending channel should be traded mostly for breakouts, otherwise avoid them. Volume at the breakout should be more than the volume of previous candles.