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Open Range 2nd Candle Break out Strategy for Trading


We have discussed many intraday trading strategy before, we also have discussed the Opening Range and Volume Breakout Strategy. Besides, here I am coming with the another Day Trading Strategy named Open Range Second Candle Breakout.


How to Take Entry

1.  Select 15 minutes time frame on the chart. In this strategy, I am using a 15 minutes time frame as it works better on this.
2. Wait till the first and second to complete.
3. Now look for the candle that breaks the upper or the lower band of the Second candle with Volume.
4. Volume above 20 MA is recommendable.
5. If any candle breaks the upper band of the second candle, go for buy, and on the other hand, if it breaks the lower end then sell can be initiated.




How to book Profit

I book my profit based on Fibonacci levels.


1.  Draw Fibonacci levels on the chart. For details check the chart given below.

In this TCS Chart, You can see both side trading opportunity. First, the 2nd Candle broke out upside, then downside. In both the trades on can book profit according to Fibonacci levels.

Keep these things in mind:

1.  15 minutes 2nd candle range must be broken with a very bullish or very bearish candle and close above or below of 15min range (Bullish/bearish engulfing candlesticks patterns recommended).

2.  Volume Plays important role here. Before taking trade check if volume is above 20 MA.
3. Try to book profit at Fibonacci levels or may trail your SL there.
4. If your Risk reward is less than 1:2, then avoid the trade or Risk is very high you can also don't take the trades.



See, This Kotak Chart, I didn't go for it as the risk was very high.

Exit and Modification in SL
1.  Maintain strict SL in the trade.
2. Your SL should just below the lower end of the 2nd Candle for buy-side and just above for the sell-side.
2.If candle closes in 15 min range with volume (20 ma) less than close the trade immediately.
3. If candle closes without volume than wait another candle with volume for confirmation which closes in range.

The Bottom Line:
You can make your own tweaks with the strategy and can develop your own version with it. If you use this strategy, it would be advisable to do backtesting before taking any trade based on this. You can also check the Bollinger Band trading strategy for intraday.

Write us in the Comment if you made any changes with it and that works good.


Special thanks for Bharat Ji for this contribution. 

Open Range 2nd Candle Break out Strategy for Trading Reviewed by Kumar Chandan on April 01, 2020 Rating: 5

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