Friday, January 9, 2009

Opening Range Breakout

This weekend I was doing some housecleaning and when through boxes of Futures and Stock & Commodities magazine. I scanned a few articles I thought were interesting and tossed the rest into the recycle bin. One of the article subjects that appeared again and again was 'opening range breakout'. I remember a forum post about Tony Crabel's "Day Trading with Short Term Price Patterns & Opening Range Breakout" going for over $1000 on eBay, somebody still thought OBR has some value. The rest of the weekend was spent looking into OBR to see if I could add another system to my small 'watch list'.

Without paying for the rare book most(all?) of the content from the book seems to be available elsewhere on the web. Stock and Commodities has an 8 article series by Crabel that is very complete. http://search.store.yahoo.net/cgi-bin/nsearch?unique=25de0&catalog=traderscom
However the best overview of Crabel's approach that I was able to find is the INO recording of a Crabel seminar in the 1990's, the INO archive has the pdf handout which contains a lot of data on the merits of combining 2 different uncorrelated systems and then trading those 2 systems across 30 futures markets. The sound quality of the recording is terrible but well worth the effort in trying to understand OBR.

The most recent advocate for OBR is Mark Fisher founder of MBF Clearing Corp and author of "The Logic Trader". http://www.mbfcc.com/logicaltrader.html A good interview of Fisher can be found at http://www.thelogicaltrader.net/FuturesMagMarkFisherprofile.pdf The real find on the web is the 3 day seminar by Fisher done several years ago that can be found at: http://www.traderslaboratory.com/forums/34/mark-fishers-acd-trading-method-seminar-3367-5.html

Results, the OBR weekend was interesting. The OBR concept seems very dated in a 24/7 trading world when the significance of the first minutes of the trading day is much less important than in the 90's. Fisher's method and especially the seminar videos are great and well worth the time but nothing in Crabel's works or by Fisher will produce a system by itself. Both authors provide a lot of valuable information that can be used as a base for a system or to acquire a better understanding of the first hour of trading.

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