ORB Trading Rules
Notes on how trading rules are constructed rather than which ones to hold. Phrasing a condition so it cannot be reinterpreted at the open, telling a binding rule from a personal preference, and settling conflicts before they arrive.
A Rule Is a Sentence That Has to Survive Nine Thirty Five
Most trading rules are written in a calm hour and read in a tense one. That gap is where they fail. A sentence that seemed perfectly clear on a Sunday evening turns out to contain a word that can be argued with when the range has just broken and a decision is due in seconds. The craft of rule writing is mostly the craft of removing those words, so that reading the rule and obeying the rule are the same act rather than two separate ones.
Ambiguity Is Where the Damage Accumulates
Words like clean, strong, decisive and convincing all feel specific until you try to check them against a live chart. Two people reading the same rule will disagree, and worse, the same person will disagree with themselves depending on whether the last three trades won or lost. A rule that requires interpretation hands the decision back to whoever is standing there at the time, which defeats the entire purpose of writing anything down in advance.
Preferences Wear the Same Clothes as Rules
A great deal of what sits in a trading plan is preference dressed up as law. Preferences describe how you like to operate and can be set aside without consequence. Rules describe the conditions under which the edge is thought to exist, and setting one aside changes what you are actually doing. Mixing the two categories in one document is corrosive, because every preference you break teaches you that the list is negotiable, and the lesson does not stay confined to the harmless entries.
Two Correct Rules Can Still Point Opposite Ways
Any set of rules large enough to be useful will eventually produce a session where one says take it and another says stand aside. This is not a defect in either rule. It is the ordinary result of describing a complicated thing with several short sentences. What matters is whether the conflict was anticipated, because a plan without a precedence order resolves its conflicts in the moment, in favour of whichever answer the trader already wanted.
How These Rules Were Written
The articles here are about construction rather than content. They deal with phrasing a condition so it cannot be reinterpreted, separating the binding entries from the merely preferred ones, and deciding in advance which rule outranks which when they disagree. Nothing here argues for a particular range length, entry trigger or stop distance. Those are choices about what to trade. This is about how the sentences describing those choices are built, tested and revised.
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The Difference Between a Rule and a Preference
Open almost any written trading plan and you will find two kinds of sentence sitting side by side in the same list. Some describe the conditions under which the approach is supposed to have an edge. Others describe how the person prefers to work. Both are written in the same imperative voice, both have a bullet point, and nothing on the page indicates which is which.
Why the Mixture Is Corrosive
A list where every item carries equal weight will be broken eventually, because some of the items do not matter enough to hold. You skip the one about reviewing yesterday's sessions before the open, nothing bad happens, and you have just demonstrated to yourself that the list is advisory. The demonstration does not stay attached to that one item. It generalises, quietly, and the next thing you skip is load bearing.
The reverse failure is just as common. A trader who treats every preference as binding spends their discipline on things that do not affect outcomes, arrives at the genuinely important rules already depleted, and feels like a failure over deviations that cost nothing.
A Working Test
Ask what breaking the item does to the trade. If breaking it means you are now taking a trade the approach was never meant to take, it is a rule. If breaking it means you took the same trade in a way you like slightly less, it is a preference.
A condition that the entry only exists after price closes beyond the range is a rule, because ignoring it produces a completely different trade with a different risk profile. A habit of drawing the range lines in a particular colour is a preference. Sitting down fifteen minutes before the open is probably a preference, unless your rule set contains something that can only be checked in that window, in which case it has quietly become a rule and should be written as one.
The Grey Cases Are Where the Work Is
Position size is the obvious example. Trading smaller than usual does not change what setup you took, so it looks like a preference. But if the plan's expected outcomes assume consistent size, then varying it changes the thing the plan is describing, and it is a rule. The category depends on what the rest of the document claims, which is why sorting cannot be done item by item in isolation.
Time of day is another. A stated cutoff after which no new position is opened is a rule if the approach depends on the character of the early session. It is a preference if it exists because you would rather be finished by then. The sentence looks identical in both cases. Only the reason separates them, and the reason is usually not written down.
Write Them in Separate Places
The simplest fix is physical. Rules live in one short list, preferences live in another, and the two are never printed on the same page. The rule list should be short enough to read in full while the range is forming, which is a useful constraint in itself, since anything that will not fit was probably not essential.
Preferences still deserve to be written down. They are how a session runs smoothly and they are worth keeping. They simply do not carry the same consequence, and pretending otherwise devalues the sentences that do. When you break a preference, you note it. When you break a rule, you have taken a trade outside the plan, and that is a different kind of entry in the journal.
Reclassification Is Part of the Process
Items move between the lists over time, and that movement should be deliberate rather than incidental. Something you thought was preference turns out to change your outcomes, and it gets promoted. Something you enforced rigidly for a year turns out to make no difference, and it gets demoted rather than deleted, because it may still be a useful habit.
What should not happen is silent reclassification, where a rule gradually becomes optional through repeated small exceptions and nobody ever decides that it did. If the list is going to change, change it on purpose, at a moment when no trade is pending, and date the change so you can tell later whether the plan you are following is the one you actually chose.
What to Do When Two of Your Own Rules Disagree
The conflict arrives quietly. One rule describes a valid entry and the conditions are met. Another rule describes a circumstance in which you do not trade, and that condition is also met. Both were written carefully, neither is wrong, and together they produce no answer at all. The plan has run out of instructions at precisely the moment it was supposed to be most useful.
Conflicts Are a Property of Short Sentences
A rule set is a compression. It takes a complicated set of judgements about when an approach works and squeezes them into a handful of sentences you can read quickly. Compression loses information, and the lost information shows up as cases the sentences do not jointly cover. Adding more rules does not fix this. It creates more pairs that can disagree, and the number of pairs grows faster than the number of rules.
So the goal is not a conflict free rule set. That is not achievable with a list short enough to be read at the open. The goal is a rule set that already contains its own tie breaker.
Precedence Is the Missing Piece
Most plans list rules as though they were equals. They are not. Some describe when an opportunity exists and some describe when you must not act regardless of opportunity. Those two categories are not symmetric, and writing them in one flat list hides the asymmetry.
The cleanest arrangement puts the prohibitions above the permissions. A rule that says do not trade under a stated condition outranks any rule that says take this entry, without needing to be argued about. This is not because avoidance is inherently wiser. It is because a fixed order produces the same answer every time, and a fixed answer you can live with beats a better answer you cannot reach consistently.
Resolve It Before It Happens
The moment a conflict surfaces during a live session, you have already lost the argument, because the resolution will be made by someone who can see the chart and knows which way they would like it to go. The rule that gets bent will be whichever one is currently inconvenient, and afterwards you will be able to explain why that was reasonable.
A conflict noticed during a session should therefore be recorded and skipped rather than resolved. No trade is the correct output of a plan that has produced no answer. That is unsatisfying, particularly if the trade you skipped would have worked, but the alternative is a plan whose contradictions are settled by preference and then justified after the fact.
Repairing the Pair Afterwards
Once the session is over, a conflict is a small and tractable piece of work. Usually one of three things is true. The two rules are describing overlapping territory and one of them should be narrowed. One of them is not really a rule and belongs in the preferences list. Or both are genuine and the plan needs an explicit statement about which wins, added as its own line rather than left implied.
The third case is the most common and the most often skipped, because writing an ordering feels bureaucratic when there are only a few rules. It stops feeling bureaucratic the second time the same pair collides and you find yourself having the same argument with a live position pending.
The List Should Get Simpler, Not Longer
Every conflict is evidence about the design of the rule set, not just about the two rules involved. A plan that produces frequent contradictions is usually a plan built by accumulation, where each new rule was added in response to a specific painful session without anyone checking how it interacted with what was already there.
The repair for that is subtraction. Rules that have never once changed a decision can go. Rules that fire on the same conditions as another rule can be merged. A shorter list has fewer pairs, produces fewer contradictions, and is more likely to be read in full rather than remembered approximately. Remembering a rule set approximately is how you end up with conflicts you never even notice, resolved silently in favour of the trade you wanted.
Writing a Rule That Survives a Losing Streak
Every rule works during the stretch when it is winning. The interesting question is what happens to the wording after four or five consecutive losses, because that is when the sentence stops being a description of your method and becomes an obstacle between you and the trade you now want to take. Rules are not tested by good sessions. They are tested by the sessions where obeying them feels stupid.
What a Losing Streak Actually Does to a Sentence
It does not usually delete the rule. It adds a qualifier. The rule that said take the first break of the range acquires an unwritten clause about only when the break looks convincing, and then another about not after a gap, and then another about not on a day like this. None of these were decided in advance. Each arrived as a reaction to a specific loss that is still fresh, and each one narrows the rule in the direction of whatever just hurt.
The result is a rule that describes the recent past rather than the intended edge. It will look sensible written down, because every clause has a story behind it, and it will keep growing clauses as long as losses keep arriving. At some point the original rule is no longer being followed and no decision was ever made to stop following it.
Phrasing That Resists This
A rule holds up better when every term in it can be checked without judgement. Compare a rule that fires when price breaks the range with authority against one that fires when a candle closes beyond the range on the timeframe you are using. The second is either true or it is not. There is no version of a losing streak that makes it ambiguous, because it was never ambiguous to begin with.
The same applies to the negative conditions. A rule that says avoid choppy conditions cannot be enforced. A rule that says stand down when the range exceeds a stated multiple of its recent typical height can be, and you will know before the session opens whether it binds today. Anything you can only assess by looking and feeling will be assessed differently after a bad week.
Write the Failure Case Into the Rule
Most rules only describe the conditions for acting. Very few describe what a normal bad run looks like, and that omission is what makes a streak feel like evidence. If the plan states plainly that consecutive losses of a certain length are an expected feature of the approach rather than a signal to change it, the streak arrives with an explanation already attached.
This is not optimism. It is the recognition that any approach with a moderate hit rate will produce clusters of losses regularly, and that a trader who has not thought about that in advance will treat the first cluster as new information. It is not new information. It is the thing the rule always implied and never said out loud.
Separate the Review From the Session
Rules do need to change. The problem is not revision, it is revision at the wrong moment. A rule changed during a drawdown is changed by someone with a specific recent loss in mind and a strong wish for it not to recur. A rule changed at a scheduled review, against a run of sessions rather than the last one, is changed by someone looking at the whole distribution.
The practical arrangement is to allow yourself to write down proposed changes at any time and to allow yourself to make them only at fixed intervals. The note gets written while the frustration is fresh, which is useful, and the decision gets made later, which is safer. A surprising number of the notes look unnecessary a week after they were written.
The Test Before You Adopt It
Before a rule joins the list, read it out and ask what you would do on a session where following it costs money and ignoring it would have made money. If the honest answer involves any thinking at all, the rule is not finished. If the answer is that you would follow it and note the outcome, it is written well enough to be worth having. A rule you would break under pressure is not a rule you own yet, and adding it to the plan only makes the plan less credible to the person who has to read it at the open.