How to Day Trade S&P500 Futures, Forex and Bitcoin Using The Opening Range Breakout (Backtested)

today I want to share a day trading strategy that I've been testing out it works on stocks on crypto and even works on some Forex pairs as well it doesn't use any indicators so it's really easy to set up and trade and I've back tested it over multiple years of data and thousands of trades in order to verify it over on trading view I've brought up the 15minute chart of the S&P 500 cfd I've tested this on 30 minutes and 5 minute and it does work in both but 15 seem to give me the best results so that's what I'm going to show here it's a morning breakout strategy which means that I'm interested in what happens when the market first opens and specifically I'm interested in the 930 candle that is when the New York Stock Exchange opens and we typically see a lot more volume the first thing to do is make sure that the time zone is set up correctly so it needs to be set to New York that way the 930 candle that I'm looking for is the market open in New York so now that I found this candle let me just zoom in a little bit I'm specifically interested in what happens in the first 15 minutes so the 9:30 to 9:45 time period which is just defined by this one candle on a 15minute chart this defines my opening range so I set a line at the high and the low I'm then waiting for a breakout through the upper line and I need this breakout to have confirmation what I mean by that that is it's not enough for the candle to just poke above and then come back down so like these candles with long Wicks here that's not what I'm looking for I need the candle to open below the line break through it and then close above it it doesn't matter if it has a wick up above as long as the close is above that breakout line once I have this confirmation that is basically my trading signal so I then enter at the open of the next candle so if I'm going to place a trade here I can then put my stop loss at the bottom of my range which is just the low of the 930 candle I then go for a 1.5 to1 R reward ratio and that trade doesn't take very long to complete and that is the basic setup of the strategy and this alone will work pretty well but there are some additional things that I founded during my testing that improve it even further so let's take a look at a couple more examples here I've got my 930 candle so I can mark the top and the bottom as my range and and then I wait for that breakout like before so remember I'm ignoring this candle because yes it broke through the line it closed back below it so I'm waiting for a confirmed breakout which then happens on this candle over here so this breaks through and it closes above it however I don't take that trade and that's not because I've got hindsight and I can see that this didn't go well but it's because I tested various entry times and what I found is that when I enter trades later in the day they become less and less profitable this candle here is the 12:00 candle and for this strategy that is too late to be taking a trade the last candle that I'm allowed to take a trade on is the 1145 if this candle had broken through then yes I would have taken that trade but because it didn't and it happen on a 12:00 I don't take that one and I can actually back this up with data from my testing after testing this strategy on the S&P 500 I then grouped all of the trades by the hour when they were entered and then I looked at the average return based on those trades and what I found was that a the majority of the trades were taken within the first couple of hours and B that's where the profits came from in general trades that were entered later tended to be losers on average and this is why I put in a time limit for the strategy that I will only take entries as long as they happen between 10 and 12:00 that means that I actually have quite a small trading window this makes sense for this type of strategy because it is a Breakout so I'm looking for momentum early after the Market opens but that means that I need to maximize this 2hour trading window and the way I do that is by taking any trade signal that occurs during that time and what I mean by that is that if I get stopped out and then another entry signal appears before 12:00 I will take that second entry it doesn't happen often so I couldn't find a good example but this one is close enough so this 930 candle it defines my range the candle afterwards closes out above it so this is where my trade begins now let's say this trade continued down in this case it didn't hit the stop loss but if it had the candle after that broke through the range again so I would take that trade because it is before 12:00 and this is based on my test results I found that it's still profitable to take these trades even if you already got stopped out on the previous one the final condition of the strategy is that trades must be left to run until they hit their stop loss or take profit so in this example let's take this 930 candle I've got the high and the low marked I then have the candle after that breaking through immediately so I'll place a trade at the open of the candle after stop goes down here at the low of my 930 range and then I'm targeting uh 1.5 risk to reward so if I set that up here you can see that this trade doesn't actually hit anything within that day in my testing I found that most of the trades do close within the same day because we're entering early on but there are some that don't and the longest trade actually came to about 6 days however the test results show that the strategy performs best when the trades are left to run to their own conclusion if holding trades overnight isn't an option then the trade should just be closed at the end of the trading day so that means that when you're at the last candle wherever that is you just close out whether it's a small profit or a loss it doesn't matter I tested this condition as well and while it does hurt the strategy performance it's still profitable now that I've talked about all the different conditions let me just recap all of the trading rules this strategy trades on the 15minute chart and the time must be set to New York because I'm looking for the market open the candle I'm interested in is the 930 to 9:45 a.m. candle so if we find that here I can then Mark the high and the low which then defines my opening range I wait for price to break through the upper line so this green candle just after it that is not enough yes it did break above it with that tiny little Wick if I just zoom in on it we can see a little bit better it did Wick above it but it closed back below that line I'm waiting for a strong breakout through it with a close above to confirm the breakout which happens on this candle here once I get that my entry is the candle after so let's place a trade here at the open the only other condition at this point is that this candle has to be before 12:00 stop-loss goes at the bottom of my trading range defined by the 930 to 945 candle and then I aim for 1 and 1 half times risk to reward within a couple of hours that trade ran its course and was a winning one all of these different conditions come from my testing so let me bring up my code and show you how I actually test these strategies I begin by importing the main libraries that I use such as as pandas and numpy and then I Define a few of my main parameters so my time frame which I'm setting to 15 minutes I'm then testing this on the S&P 500 cfd a starting balance of 100 the currency is relevant risking 2% per trade the market open time is 9:30 and then I'm looking for the first 15 minutes of the day I tested 15 30 and 60 60 didn't work 30 was okay but 15 turned out to be the best the market closes a p.m. so 1645 is the last candle of the day and my cut off for when I can enter a trade is before 12:00 exit trades at the end of the day is set to false and taking just one per trade is also set to false which is what I talked about earlier if a trade gets stopped out but then another signal appears then I would still take that trade I then load in my price data from a CSV file and I'd make sure that it's configured to New York time zones this generat signals function is where most of the strategy logic actually lives I have various conditions or trading rules here that this strategy must follow this then allows me to generate my entry signals as well as my stop- loss and take profits then after I run the back test I like to visualize the trades on the Candlestick chart so here I can manually zoom in and select the trades and see what actually happened with them this is really useful when I'm developing the strategy because I want to make sure that it's doing what I'm expecting it to do so in this case we can see that that is the 10:00 candle that is a 9:30 a.m. so that's our range candle after that broke through and closed above so the entry signal was right here and then it carried on to a take profit over here so this other glance just shows me that it does seem to be doing what I expected to do and then lastly I can output the equity curve on the S&P 500 this is going back 5 years so from the start of 2020 up to the current day the equity curve is really strong a couple of dips along the way some draw down but generally it's looking pretty good down here I've got the actual metrics for it so the annual return is 62% with a draw down of just under 28% a win rate of 47% but the risk to reward that we're aiming for is 1 and A2 these results are based on me holding the trade over multiple days and as you can see the longest trade is 6 days but I can modify the condition so that I now exit at the end of the day if I change this to true and then I run my back test I'm going to get a new Equity curve and new metrics based on that so the equity curve itself looks very similar but if you notice the numbers from before the final balance is quite a lot smaller and if I go into the metrics you can see the annual return has dropped to about 44 43 and 1.5% draw down of 23 the win rate is slightly improved but the average risk to reward now is 1.25 so although I'm aiming for 1.5 it doesn't always get to that because the trades are just stopped at the end of the day this means that the preferred option is to hold the trades for as long as needed but if that's not an option then closing them at the end of the day still performs really well and for comparison this is the same strategy tested on bitcoin again between 2020 and 2025 with a similar result and I've left the condition that the trades are closed at the end of the day so this gave a return of 38% 25 1/2 draw down 47.8 % win rate and 1.37 average risk reward and then to show that it even works on Forex this is GBP versus USD over the last 5 years I tested on a couple of Forex pairs Euro USD didn't work so well but pound dollar seems to be profitable I'm quite pleased with the results from the strategy it's simple but it's effective and it does generate a good number of trades on this pound dollar for example I had 826 trades over that 5year period that means that on most days there will be a trade and I know that these Market open kind of strategies are fairly common and there's loads of variations so let me know in the comments if you've already tried something like this and what you thought of it you can also post suggestions for other strategies if there's something that you'd like me to test out and if you found this video useful and want to see more back tests like this make sure to hit the like button and subscribe to the channel