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1H Opening Range Trap v3
Indicator Name: First Hour Candle Trap
Alternative Names: Daily Open Range Trap, CRT V1
Summary
This indicator is designed for intraday markets to identify failed breakouts of the daily opening range. Its primary purpose is to capture moments when the price creates a "trap" by breaching the range established in the first hour of trading, only to quickly reverse back inside. The indicator then presents this potential reversal as an entry signal. The strategy is based on the principles of liquidity hunts and failed breakouts, often associated with "smart money" concepts.
Strategy Logic
The market often establishes a significant high-low range during the first hour of the trading day (typically the 00:00 UTC candle), which can act as an important support and resistance zone for the remainder of the day.
The Opening Range: The indicator automatically identifies the high and low of the first 1-hour candle of the day and visualizes this zone on the chart.
The Trap: Price will often attempt to break out of this range. However, if this initial breakout attempt fails and the price quickly returns inside the range, it suggests that traders who took the breakout are now trapped on the wrong side of the market. Our indicator is designed to pinpoint this exact moment.
LONG Signal: A LONG signal is generated when the price first dips below the opening range low and then re-enters the range by moving back above it. This indicates a trap for sellers, suggesting that sellers are weakening and buyers are taking control.
SHORT Signal: A SHORT signal is generated when the price first breaks above the opening range high and then re-enters the range by moving back below it. This suggests that buyers are weakening and sellers are gaining momentum.
Visual Components of the Indicator
Opening Range Box: The zone between the high and low of the first hourly candle is displayed on the chart, typically as a semi-transparent box.
LONG/SHORT Markers: When the strategy conditions are met, labels such as BUY (LONG) or SELL (SHORT), or arrows, will appear above or below the signal candle.
How to Use
Timeframe: This indicator is designed and has been optimized for the 1-Hour (1H) timeframe, where the original strategy was developed and tested.
Entry Signal: When a BUY or SELL label appears on the chart, it signals a potential entry at the close of that candle.
Risk Management (Stop-Loss and Take-Profit): The indicator provides the entry signal, but risk management is up to the user. The method that was tested and proven successful in the original "Champion Strategy" was:
Fixed Ratio: Setting a fixed 2% Stop-Loss and a 2% Take-Profit from the entry price. This offers a 1:1 Risk/Reward ratio.
Alternative Methods:
Stop-Loss: Can be placed just outside the range (e.g., slightly below the range low for a long position; slightly above the range high for a short position).
Take-Profit: Can target the opposite side of the opening range.
Additional Notes
By its nature, this strategy generates a maximum of one trade signal per day. Some days may have no signal at all.
Like any trading strategy, this indicator is not a holy grail. Always conduct your own backtesting and adhere to your risk management rules. Past performance is not indicative of future results.
Alternative Names: Daily Open Range Trap, CRT V1
Summary
This indicator is designed for intraday markets to identify failed breakouts of the daily opening range. Its primary purpose is to capture moments when the price creates a "trap" by breaching the range established in the first hour of trading, only to quickly reverse back inside. The indicator then presents this potential reversal as an entry signal. The strategy is based on the principles of liquidity hunts and failed breakouts, often associated with "smart money" concepts.
Strategy Logic
The market often establishes a significant high-low range during the first hour of the trading day (typically the 00:00 UTC candle), which can act as an important support and resistance zone for the remainder of the day.
The Opening Range: The indicator automatically identifies the high and low of the first 1-hour candle of the day and visualizes this zone on the chart.
The Trap: Price will often attempt to break out of this range. However, if this initial breakout attempt fails and the price quickly returns inside the range, it suggests that traders who took the breakout are now trapped on the wrong side of the market. Our indicator is designed to pinpoint this exact moment.
LONG Signal: A LONG signal is generated when the price first dips below the opening range low and then re-enters the range by moving back above it. This indicates a trap for sellers, suggesting that sellers are weakening and buyers are taking control.
SHORT Signal: A SHORT signal is generated when the price first breaks above the opening range high and then re-enters the range by moving back below it. This suggests that buyers are weakening and sellers are gaining momentum.
Visual Components of the Indicator
Opening Range Box: The zone between the high and low of the first hourly candle is displayed on the chart, typically as a semi-transparent box.
LONG/SHORT Markers: When the strategy conditions are met, labels such as BUY (LONG) or SELL (SHORT), or arrows, will appear above or below the signal candle.
How to Use
Timeframe: This indicator is designed and has been optimized for the 1-Hour (1H) timeframe, where the original strategy was developed and tested.
Entry Signal: When a BUY or SELL label appears on the chart, it signals a potential entry at the close of that candle.
Risk Management (Stop-Loss and Take-Profit): The indicator provides the entry signal, but risk management is up to the user. The method that was tested and proven successful in the original "Champion Strategy" was:
Fixed Ratio: Setting a fixed 2% Stop-Loss and a 2% Take-Profit from the entry price. This offers a 1:1 Risk/Reward ratio.
Alternative Methods:
Stop-Loss: Can be placed just outside the range (e.g., slightly below the range low for a long position; slightly above the range high for a short position).
Take-Profit: Can target the opposite side of the opening range.
Additional Notes
By its nature, this strategy generates a maximum of one trade signal per day. Some days may have no signal at all.
Like any trading strategy, this indicator is not a holy grail. Always conduct your own backtesting and adhere to your risk management rules. Past performance is not indicative of future results.
Skrip dilindungi
Skrip ini diterbitkan sebagai sumber tertutup. Akan tetapi, anda boleh menggunakannya dengan percuma dan tanpa had – ketahui lebih lanjut di sini.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Skrip dilindungi
Skrip ini diterbitkan sebagai sumber tertutup. Akan tetapi, anda boleh menggunakannya dengan percuma dan tanpa had – ketahui lebih lanjut di sini.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.