That Very Rare Trading Book

Excerpts from Toby Crabel’s Mythical Book

Day Trading with Short-Term Price Patterns

A while ago I managed to grab a hold of Toby Crabel’s mythical book.

“Day trading with short-term price patterns and opening range breakout”

Mythical because he allegedly bought back all the copies as he didn’t want to reveal his secrets.

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Anyway, I’ve been reading it and I want to share some concepts.

Note: I’m going to respect his work and the copyright. I’ll talk about the broad themes and ideas he covers. They may inspire you to go and do some study on the topic yourself.

So one of the concepts Crabel studies is using the opening range breakout.

I did a monster deep dive article on it here.

But he likes to add additional filters into the mix.

NR4 Day and The Doji

NR4 day is the smallest daily range for the last 4 days. You wait until the prior day is an NR4 day and then take the ORB trade.

Then he added another… A Doji. A doji candle is a candle that forms when the open and close are similar.

It looks like this:

So the rules are:

  1. Wait for an NR4 day and a DOJI combined.
  1. Then on the next day take an ORB in any direction.

In his book, he shows the stats for various markets and they look pretty good.

And it makes sense right?

In the right context, price has a volatility and range contraction (NR4) combined with the intraday indecision with no real winners (DOJI), the next move tends to be price discovery.

Which lends itself to the opening range breakout trade…

I call this ‘stacking layers of edge’ and Mr Crabel is doing this very well.

It might be worth exploring….

I’ll share more as I work my way through the book.