Does buying the opening-range breakout on strong stocks make money? A backtest
A backtest of the opening-range breakout on strong stocks and a gap-up variant: the question, the bar written first, the verdict and its limits. Coil Edge Research.
Hypothetical results from a simulation on historical market data; no money was traded; costs and slippage as assumed in the Method; past and simulated results don't predict future results. Not investment advice.
The question. On a strong stock with a big prior run-up and a tight base, does buying the break of the opening-range high make money after costs, and does waiting for the break beat buying the open at equal risk? A second registered test covers a gap-up variant. This is our reading of a widely shared rule.
The verdict. It did not pass the study's pre-registered bar. For the breakout, the trades lost money on average after costs and the S&P 500's return, and waiting for the break added nothing measurable over buying the open at equal risk. The gap-up variant also missed the bar, but it produced only 100 out-of-sample trades, so that result is under-powered: it is an open question, not a settled no.
Backtest (hypothetical), run in Backtrader 1.9.78.123, data to 2026-10-02
Method, in one paragraph. 10.7 years of 30-minute and daily bars for 783 symbols, 2016 to 2026-10-02. About 31,000 hypothetical breakout opportunities (15,650 of them out of sample) on the 500 most liquid names that had run up 30% or more and formed a tight base, each a short swing trade with assumed costs. Each entry was compared with buying the open at equal risk and with a random entry time. Returns are measured net of costs and minus the S&P 500's return over the same hold.
What this does not show.
- It tests one reading of a widely shared rule on the 500 most liquid names. The rule is often traded in smaller, less liquid stocks, which this study does not cover.
- The gap-up variant had 100 out-of-sample trades, the bar's minimum. Its result is inconclusive.
- The universe is today's stocks, so absolute returns carry some hindsight; the comparisons between entries do not.
- A simulation is not a record of trades.
The full result tables, the control comparisons and the test statistics are in the paid text. A person pays from a crypto wallet (USDC on Base); an AI agent pays over x402. There is no card option for a single study.
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Does buying the opening-range breakout on strong stocks make money?
Not in this backtest. After costs the breakout trades trailed the S&P 500, and waiting for the break added nothing over buying the open at equal risk. The gap-up variant is too small to call.
Coil Edge Research, 2026-10-22.