ORB Gap-and-Go Calibration
Forty percent of volatility occurs during the first fifteen minutes of the session. Data processed at orb trading scanner dakotalandcommunityinsurance shows that many traders miss gaps because the scanner settings filter out the move before the opening bell. Setting up an orb scanner requires specific calibration to catch stocks gapping above the previous day high. A failure to adjust the timeframe results in missed signals during the most active part of the morning.
Setting the Gap Threshold
The scanner must distinguish between a true gap and noise. A gap above the previous day high requires a setting that compares the premarket price to the prior close. If the scanner looks only at the current candle, the gap is already missed. The logic must check the pre market price levels against the previous day session high. A setting that is too tight produces false positives during low volume periods. A setting that is too loose ignores the momentum of an opening range breakout. Calibration involves testing the gap against the volume profile of the overnight session.
Defining the Timeframe
Selecting a specific timeframe determines the speed of the alerts. A 5 minute setup captures the immediate reaction to the market open. This method requires high speed data to avoid lag. A 15 minute range offers more stability for those avoiding the initial noise. Using a 30 minute or 60 minute range slows the signal, which often means the meat of the move has passed. The scanner parameters must align with the intended entry method. A 5 minute candle provides the most granular data for identifying the opening range. Adjusting the scan to look at the first hour provides a broader view of the trend.
Filtering Volume and Liquidity
A gap without volume is a trap. The scanner needs a minimum volume filter to ensure the gap has institutional backing. Setting a threshold for relative volume compared to the average daily volume is standard. If the volume is low, the price will likely fade after the cash open. The scanner should only flag stocks where the premarket volume exceeds a set percentile of the total daily average. This keeps the focus on stocks with enough liquidity to support an intraday move.
Managing the Opening Range
The opening range breakout occurs when the price clears the high of the initial candles. Setting the scanner to monitor the high of the first fifteen minutes is a common mechanical approach. The scanner must track the price relative to the opening range high. Once the price clears that level, the scanner triggers an alert. This process relies on the price staying above the opening range to maintain the trend. A break back below the range indicates a failed gap.