The Simplest Orderflow Trading Model — Transcript

Learn a simple yet powerful orderflow trading model that enhances the classic opening range breakout with statistical and volume profile analysis.

Key Takeaways

Opening range breakout is a proven, statistically reliable trading edge.
Combining ORB with order flow and volume profile data significantly improves trade entries and risk management.
The New York session opening is critical for identifying market direction due to high volume and participant activity.
Volume absorption and imbalances provide key signals for confirming breakout validity and potential retracement points.
Using a data-driven model reduces discretionary bias and enhances trading consistency.

Summary

The video explains the opening range breakout (ORB) strategy, originally published by Toby Crabel in the 1990s, which uses the first 15 minutes of the cash session to identify breakout trades.
ORB has proven to be a consistent edge with a positive profit factor and high Sharpe ratio over the last decade.
The presenter enhances ORB by combining it with order flow triggers and deep statistical analysis to improve entry points and risk-to-reward ratios.
The model uses volume profile data, including value area, point of control (POC), and volume imbalances to identify high-probability profit targets and sensitive order blocks.
The New York session opening is highlighted as the most important time with the highest volume and strongest buyer-seller battles.
Order flow confirmation helps to validate directional bias and detect absorption or rejection of aggressive buyers or sellers.
The model provides clear levels for stop-loss, take profit, and entry based on statistical reliability and volume profile insights.
The video demonstrates how to interpret volume absorption, aggressive orders, and imbalances to anticipate market moves.
Using this combined approach results in smoother equity curves, less drawdown, and improved expectancy compared to using ORB alone.
The presenter encourages viewers to subscribe and offers access to the IVB model via deepcharts.com for practical application.

Chapters

Full Transcript — Download SRT & Markdown

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A lot of traders are familiar with the opening range breakout. You buy or sell the breakout of the first 15 minutes of the cash session. This strategy, published in the 1990s by Toby Crabel, has proven to be one of the most consistent edges over the last decade with a positive profit factor and an amazing Sharpe ratio. It's one of my favorites because it's really easy to trade, and you can pair it with order flow confirmation to boost its edge. In this

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edge over the last decade with a positive profit factor and an amazing sharp ratio. It's one of my favorite because it's really easy to trade and you can pair it with orderflow confirmation to boost its edge. In this

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video, I will show you how to put this edge on steroids by using two main things. The first one is an order flow trigger, and the second one is deep statistical analysis, and how I work with the Deep Charts team to build a

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model that shows you one the highest probable excursion to give you a level where you put your first take profit and second one the best imbalance or aggression to put your entry. If you like this video subscribe to the channel

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model that shows you one, the highest probable excursion to give you a level where you put your first take profit, and second, the best imbalance or aggression to put your entry. If you like this video, subscribe to the channel

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So in this video we are going to understand how the opening range breakout or initial balance breakout works and how we can improve it. Now the logic behind the opening range breakout or initial balance is the following. The

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and put a like, and if you want to access the IVB model, go on deepcharts.com.

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see this as soon as the London session open with big swings and a big battle between aggressive buyers and aggressive sellers. This situation here define a clear range and from this range you can see rejection you can see absorption of

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So in this video, we are going to understand how the opening range breakout or initial balance breakout works and how we can improve it. Now, the logic behind the opening range breakout or initial balance is the following. The

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depends how you want to use it. If you want to use it more scalp or more intraday bias and what the model says is that the first one that break is telling you what is telling you who won the

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New York session is the session that holds the maximum amount of volume for the day. So you have the strongest battle between buyers and sellers. You have the peak of interest and input of volume during the day, and usually you

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certain level that you can use as high probability profit target. Now when we understand this, we understand that what we are doing is aligning with the biggest market participants that won the battle. So we are protected by a wall of

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see this as soon as the London session opens with big swings and a big battle between aggressive buyers and aggressive sellers. This situation here defines a clear range, and from this range, you can see rejection, you can see absorption of

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session without implementing volume. So you can already see that compared with the S&P 500 buy and provide a smoother equity line with less draw down and gives you a expectancy or profit factor that is positive. Okay. Now why this

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the buyers, of the sellers' exhaustion. So you can do a lot of analysis with volume. But the ORB method works this way. You have two defined levels that are the top and the bottom of the range of the first 15, 30, or 60 minutes. It

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So what I'm doing now is using the statistical reliability of a profitable model paired with the steroids of orderflow analysis to get better entry point and better riskto-reward. Okay, how can we do this? We can do this in

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depends on how you want to use it. If you want to use it more scalp or more intraday bias, and what the model says is that the first one that breaks is telling you who won the

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point A and point B? This is the opening of the New York. We have a top. We have a bottom on the first 15 to 30 minutes.

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battle of the most important time of the day. So the first 15 minutes of New York opening or 30. Okay. And from a statistical point of view, this one has a strong value in predicting the direction for the day, at least till

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to this level. Why this gets interesting? Because now we not only have price but we have the volume distribution of the most important interaction of the day. And we can notice that the major point of control so the PC so the level where the

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a certain level that you can use as a high probability profit target. Now, when we understand this, we understand that what we are doing is aligning with the biggest market participants that won the battle. So we are protected by a wall of

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Now the most sensitive level after you have this is the level contained between the value area and the PC. This is our real block of orders. This is where when you retrace you can expect buyers to reload. Okay. So this is a really

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balance. We are going in a condition of imbalance, and we are in the direction of the volume. Okay. Now, this one used alone without any other confirmation has value. Okay. Has value. This one is using the first 15 minutes of the

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And this is for location. This is letting you understand the direction and letting you understand also the potential location of the area, the sensitive area. Why this is interesting?

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session without implementing volume. So you can already see that compared with the S&P 500 buy and provide a smoother equity line with less drawdown and gives you an expectancy or profit factor that is positive. Okay. Now, why this

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accept it, it's an invalidation point. Okay, you don't need to wait till here. You don't need to wait till here. You don't need to wait till here. If we close a candle here, okay, the setup is invalidated. So our real risk-to-reward

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gets interesting is because during the years I was trying to understand how to take a model that is already profitable and put it on steroids, and my kind of steroids is order flow.

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are using the same model with the same directional frame and probability but paired with order flow to improve his matrix. This is the model one. Okay. And this one don't use anything complicated.

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So what I'm doing now is using the statistical reliability of a profitable model paired with the steroids of order flow analysis to get better entry points and better risk-to-reward. Okay, how can we do this? We can do this in

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Okay, so we have a range, we have a point A, we have a point B, we have our profile. Okay, we have the value area low, we have the PC, sorry, the value area high, the P, and we have the value

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multiple ways. The first way is by implementing in the model the volume profile. Okay, let's see the model one of IVB. So the model one of IVB is using the following. We have point A and we have point B. How can we define this

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this level? Maybe we have a lot of aggressive sellers here with zero result. This means that there is a big absorption on this level on the PC.

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point A and point B? This is the opening of New York. We have a top. We have a bottom on the first 15 to 30 minutes.

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trade with a really tight stop-loss to go to the protection level. You can use all the confirmation of order flow not only to have direction.1 location 2 and confirmation of order flow.3. This is how I built during the years the basis

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Okay. This is our point A, and this is our point B, and the price is inside this value for 15 or 30, depends on what you prefer to use. Okay. Now we take this top, we drag down with the fixed profile

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digging into the data to see what's the highest probability point that the market reach when you have a breakout of the initial balance or orb. Okay. And what the IVB does is that when you have a breakout, okay, it plot for you the

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to this level. Why this gets interesting? Because now we not only have price, but we have the volume distribution of the most important interaction of the day. And we can notice that the major point of control, so the POC, so the level where the

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done for you by an algo. You have this logic done for you by an algo. Okay. And you can concentrate all your skills on the location and on the order flow confirmation. Okay. So the statistical analysis is doing 50% of your work by

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majority of volume of the market participants is here. Okay, this takes the name of POC. Now, this is really powerful because when we go from a balance situation inside to an out of balance, so the price accepts this value.

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and confirmation than the simple orb model. Okay. And this one it's paired with a data analysis on the deep charts platform that is giving you the summary of the distribution between consolidation session and directional.

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Now, the most sensitive level after you have this is the level contained between the value area and the POC. This is our real block of orders. This is where, when you retrace, you can expect buyers to reload. Okay. So this is a really

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don't break completely this level the direction is not clear so you can also use a mean reverting model that is spotting the absorption of the sellers of the buyers the exhaustion on sensitive areas that are the top and the

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sensitive confirmation from the volume profile. So we have a profitable model plus the volume profile framing. Okay.

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what we built with the deep charts team. Now let's go to the platform and I show you how this works in action. Okay, now we are in the back testing mode of deep charts. We have a clean defined IVB top

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And this is for location. This is letting you understand the direction and letting you understand also the potential location of the area, the sensitive area. Why is this interesting?

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up for you a little bit. Let's see how it goes. You can see the aggression of the sellers. On the same template I have also the big orders. So as you can see till the 30 minutes is completed they

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Because first of all, you have a more precise entry point, so you can boost your risk to reward. And second of all, you also have a level of invalidation if broken. So you have a value area low that, if it gets broken, so the market

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absorption and the aggression and the imbalance. Okay. And we can see that the pressure is building on the upside. So if we have a breakout now, this is the first 30 minutes of the session, we will have a protection level that is the

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accepts it, it's an invalidation point. Okay, you don't need to wait till here. You don't need to wait till here. You don't need to wait till here. If we close a candle here, okay, the setup is invalidated. So our real risk-to-reward

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Can go up a little bit. See the buyers continuing to step in without the support of the aggressive orders. Can zoom out for you a little bit inside. We have the aggression of the buyers with the big trades on top and we have the

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is this from here to the first protection point. And the first protection point can be, for example, here. Okay. So now our risk-to-reward is not one to one like the test that we did, but maybe it's 1 to 2, one to 2.5. So we

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rejected perfectly from the top of the IVB. This is letting you understand how much is sensitive this area and why if we don't break out usually the price stays in a range. Okay. Now what you can see here a lot of absorption aggression

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are using the same model with the same directional frame and probability but paired with order flow to improve its matrix. This is model one. Okay. And this one doesn't use anything complicated.

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Okay, we have a first candle breakout and now the algorithm understand the protection level. This is the highest probability target for the single session. Let's go on this one. You can see that from this level you have an

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Then the model two of IVB is using order flow. Okay. This is a little bit more advanced. Okay, because it's using the confirmation after the breakout.

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level they insisted again and they got absorbed more and more. Okay? And they are building pressure. So you have a huge absorption on this horizontal level. We have a clean direction. We have a clean breakout and we are heading

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Okay, so we have a range, we have a point A, we have a point B, we have our profile. Okay, we have the value area low, we have the POC, sorry, the value area high, the POC, and we have the value

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They are building the momentum for the session. A little bit of retracement. You can see that every time, see how much is sensitive the initial balance breakout area. Okay. Every time they come to test this area back, they have

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area low. And we have our framing area to seek buy. Okay, we have a breakout, we have the market retracing, and now we can start using the confirmation of order flow. Okay, what do I mean? That we can start to see how orders interact

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aggression from the buyers. Again, consider this guys. It's a really big really big risk-to-reward. If you know how to use orderflow and you try to manage to take this entry or the test entry, you are already 1 2 3 1 to four.

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this level? Maybe we have a lot of aggressive sellers here with zero result. This means that there is a big absorption on this level on the POC.

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I took a choppy session. As you can see now they are facing the previous imbalance cluster of the buyers and they are pushing into it. So they are trying to break and you can see that every time they manage to go close to the initial

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Okay, so we can use this as a confirmation trigger to go long, or maybe you can see an exhaustion. So you can see that the sellers don't interact. We have aggressive buyers with momentum at the top, and you can take a momentum

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because you have the power of order flow paired with the directional predictability of the system that is based on statistics. So you are not using discretionality to frame your bias for the day. See how much this one I

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trade with a really tight stop-loss to go to the protection level. You can use all the confirmation of order flow not only to have direction, one, location, two, and confirmation of order flow, three. This is how I built during the years the basis

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area again to the same absorption area for the fourth time. Gone a little bit.

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and the foundation of the IVB model. Then the team of Deep Charts stepped in and said, okay, let's do deep statistical analysis. Okay, let's go through years and years of data and use an algorithm using neural network, machine learning, or

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Okay. So look at this. This is the breakout level. Okay. And we had a choppy day. So I took one of the worst session to do this. But look how the market reacted to this level. Okay. So we frame this area in the beginning. We

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digging into the data to see what's the highest probability point that the market reaches when you have a breakout of the initial balance or ORB. Okay. And what the IVB does is that when you have a breakout, okay, it plots for you the

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you can scalp in the middle all this execution. Let's go to another day. Let's go to the next one. The 27. Let's reset. I show also how the model is built before the session. So we have here the first 30 minutes that are

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high probability profit target, okay, and the potential TP2. So you know that with 65 to 70% probability, you go here, and you know that with another lower probability, of course, you go to the TP2. Okay? So now you have this logic

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little bit further and this area last for the first 30 minutes. Here they start with the IVB. Okay, they start to plot the level. Now wait for the first 30 minutes of the session. So we have a clean defined range. The range is

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done for you by an algo. You have this logic done for you by an algo. Okay. And you can concentrate all your skills on the location and on the order flow confirmation. Okay. So the statistical analysis is doing 50% of your work by

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unfolding. 3 minutes and it's closed. Okay. Now if they break this level because the range is defined. Okay. Look how much aggression then the protection level will appear somewhere here. the algo will plot it for us. Okay, you see

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removing all the analysis of where you should go, the direction th

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the sellers are trying to push it down but the buyers have a clear direction and you start to plot all kind of imbalance in the middle. Okay. So as you can see on the level you see that the

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sellers are trying their best to push and you have a lot of absorption on this horizontal level but when they break this one they have a drift. Okay they have a drift on the upside direction. So what this means is that usually you see

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a breakout, you see a retracement and then you see the real battle beginning between buyers and sellers and from this interaction you can see that the sellers got absorbed on multiple cluster but the buyers are still managing to push above

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the IVB and when they push above the IVB they have a drift okay because you have to consider that they won the first battle of the day that is the most important one because it's the cash session battle and they defined in the

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direction for the day. So everything you take either you prefer to take absorption on the test of an imbalance or you prefer to take a potential reload on the level if they manage to reach it again. You have multiple trades that you

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can execute with the confirmation of where the price will most likely extend with the biggest probability. So you can say okay I'm done for the day and then consider that in some directional session that the first two ones that we

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saw so the one of Monday and this one that we are seeing it's not the best directional session okay because you have a really compressed price after the breakout but it's letting you understand that it's really powerful at defining

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the direction and I'm keeping on the chart also all this executed order because it's giving you a proxy for who is winning the battle. For example, in this interaction, you can see a lot of rewarded buyers and a lot of absorbed

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sellers. What does it mean? The buyers want this interaction here. Here, what you can see that the sellers are actually managing to have more results.

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Why? Because the buyers are absorbed and the sellers are having results. In this case, what we see the buyers are actually trying to push the auction up and they are winning this battle. Okay.

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So, what we can expect? We can expect from the orderflow perspective that this can be an interesting reload level of the buyers. And how can we have a confirmation when you have a breakout of this horizontal level? Okay, because

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this is the level where the real fight between buyers and seller is happening. They reach the discount one that is all this area and they are loading again.

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Okay, this is the high risk-to-reward trade if you want to take it. Okay. So when you have aggression of the buyers for example here okay they are protecting the area you can consider a buy with a stop loss below that goes to

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the protection level. Now not all the session will give you this amazing setups but when you know what you are watching in terms of order flow. So you have a allocation and you have a confirmation you can frame this

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opportunity by using the win of the battle of the buyers. Okay. and the momentum that it's directly derived from this interaction. Let's go a little bit faster. Can see the sellers are still super aggressive on this one. They

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tested again the entry level and they are playing around. Okay, now let's go to the replay of another session. You can see that the IV bits unfolding. Now we need to wait for 30 minutes for it to be defined. You can see all these

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absorption of the sellers. Okay, on this level then you can see a huge aggression of the sellers. So if they will break on the downside, we will consider short. If they break on the upside, we will consider long. As of now, the buyers are

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really aggressive on the upside. But still, we are only 15 minutes into the session. So let's see who is managing to break out either the high or the low.

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And from this moment, you will see either the protection level appear on the top or on the bottom side. They are managing to do still 5 minutes to finish the first 30 minutes of interaction. So the IVB is updating to the actual volume

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and price interaction. Little bit of absorption at the top. Okay, they managed to break. What is this? This is the protection level. Okay, the protection level is the most sensitive areas to reach if we go buy and then we

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have the extended average. And you know what I will do? I will just remove the order flow from this one because I want to show you also the power of the profile. Okay, remove everything. Just keep the imbalance to show you who is

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dominating this situation. I will mark the top of the IVB and I will give a projection of the profile on this one.

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So you can see what you can see that on this interaction we have the major volume concentration here. Okay. So what can we expect? We can expect that the price will break and reload. Break and reload. Break and reload. Okay. All this

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accumulation area it's also sustained by this amazing imbalance. Okay, they already show you an absorption of the sellers. So we have all the confirmation that this session we can play the bounce to go up maybe 1 2 3 1 2 3 1 2 3 and

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then if the market gives you and it's a direction all day you have the run that goes to the protection level. Now we will go a little bit fast and let's see how it unfolds. Okay, they managed to

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reload on the level and you can see that the price is really aggressive on the upside and it bricks the price back to the IVB high. Okay, and all these this can seems to you like small entry but

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all these setups have a really high risk-to-reward when you know how to frame the area. Okay, you have a really high now if you manage to reach the maximum. It's amazing but the win rate goes low. So it's better to take 1 2 3 1

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to 2.5 with a really consistent way of executing it. Let's see how this area react also for the long term. Let's put a protection level cell. This one is calculated by an algo. It's doing a lot of analysis behind. Let me go faster so

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you can enjoy. I took another session that is choppy to make you understand that even when the market is not moving and is giving you a consolidation range, you are only engaging from the most interesting area. Okay. So if you also

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have problems of overtrading or if you don't know how to stay out of the market when the conditions are not good. See for example he already gave you an amazing long here another long here and you could have made one to two one two

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one two three and then another one two three. Okay now we are going late in the session but I will keep the level marked because I want to show you this was a super consolidation session. Okay. I want to show you how the price react

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from the level that we marked. How much they are powerful. Let's mark it on. As you can see, it's a super compression.

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Okay. They It's really compressed. They are dancing in the area of the IVB low.

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Okay. And the area of the protection level that it's on the top. They are in this area. They are late in the session.

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The session is almost closing. Look how they manage to react to the protection level. Okay. Now, it's possible that you close before that you will not hold this position. But what I want to show you is the power in helping you to understand

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first of all the pressure, second the location and the orderflow confirmation.

Topics:order flow tradingopening range breakoutinitial balance breakoutvolume profilepoint of controltrading strategystatistical analysismarket volumerisk to rewardToby Crabel

Frequently Asked Questions

What is the opening range breakout strategy?

The opening range breakout strategy involves buying or selling the breakout of the first 15 minutes of the cash session. It identifies key price levels formed during this period to predict market direction.

How does order flow improve the opening range breakout?

Order flow provides confirmation by analyzing aggressive buying and selling, absorption, and volume imbalances, which helps refine entry points and improve risk-to-reward ratios.

Why is the New York session opening important in this model?

The New York session opening has the highest volume and the strongest battle between buyers and sellers, making it a critical period for determining market direction and setting high-probability trade targets.

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