Trading Brexit on the SP500 CFD with the Open Range Breakout Strategy

  • master
  • 25.07.2019
  • Comments Off on Trading Brexit on the SP500 CFD with the Open Range Breakout Strategy

The S&P500 continued to show strength into the start of the third quarter of 2019, pushing above 3,000 points for the first time in its history.

The reason for the strong performance can surely be found in markets speculation of a very dovish US central bank projected for the coming months, which they most likely read several quite clear hints of the Fed being ready to act and cut interest rates if President Trump’s trade war weakens the US economy.

This is especially true now after Fed chairman Powell’s testimonial before the House Financial Services Panel, which brought a deep rate cut (50bp) into play by saying that a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit. And there is a risk that weak inflation will be even more persistent than the Fed currently anticipates.

Source: Admiral Markets MT5 with MT5-SE Add-on SP500 CFD Daily chart (between April 20, 2018, to July 19, 2019). Accessed: July 19, 2019, at 10:00am GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.


In 2014, the value of the SP500 CFD increased by 11.39%, in 2015, it fell by -0.73%, in 2016, it increased by 9.54%, in 2017, it increased by 19.42%, in 2018, it fell by -6.24%, meaning that after five years, it was up by 36.8%.

With that said, you can imagine, that traders could profit from the resulting bullish price action several times intraday, e.g. on July 3 with a presented strategy in one of Admiral Markets’ educational webinars to help its traders to reach the next level on their journey to profitability in trading.

But before you are given a deeper look into the trading setup and the trade of this specific day, let’s recall the 3 steps of the S&P500 Open Range Breakout strategy:

  1. Define Open Range between 3:30pm and 4:15pm (CET)

  2. Identify the advantage: based on the 15-min-EMA (10)

    SP500 CFD trades above > Long,
    SP500 CFD trades below > Short

  3. Trade the break of the Open Range in direction of the identified advantage.

Stop above/below the high/low of the range (= 1R), Take Profit: “Time Take Profit”, meaning that the trade is taken out manually at 9:50pm (CET) if it wasn’t stopped out before

In the following, let’s go through these three steps and see how the setup would have performed on July 3:

  1. The high and low between 3:30 and 4:15pm (CEST) can be found between 2,977.6 and 2,982.3 points, so the Open Range is 2,977.6 – 2,982.3

Source: Admiral Markets MT5 with MT5-SE Add-on SP500 CFD 15 minute chart (between July 2, 2019, to July 4, 2019). Accessed: July 15, 2019, at 12:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.


  1. As you can see in the chart above, the SP500 CFD initially traded above the EMA(10) on a 15-minute time frame (purple line). That resulted in the fact that only Long trades were taken and this only if the SP500 CFD breaks out on the upside of the Open Range.

Source: Admiral Markets MT5 with MT5-SE Add-on SP500 CFD 15 minute chart (between July 2, 2019, to July 4, 2019). Accessed: July 15, 2019, at 12:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.


  1. As you can see in the chart above, the SP500 CFD broke out of its Open Range on the upside and started to move in direction of the breakout in the minutes and hours to come.

    The stop was placed at the low of the range, resulting in a risk of 5.7 points.

    Since the setup works with a Time Stop Out/Take Profit in case of the trade not being stopped out during the trading day, it is usually taken out at 9:50pm (CET). ‘Usually’, because July 3 saw shortened trading hours due to the US bank holiday ‘Independence Day’. Still, we definitely wanted to take this trade on the Long side, since historically, July 3 is usually one of the best days of the year for the S&P500. So, we decide to take out the trade manually 5 minute before the close at 6:55pm (CEST).

    Following this rule, we did so and took the trade out at 2,995 points, resulting in a profit for the day and for the setup of 12.7 points and a profit factor of 12.7 points : 5.7 points = 2.2 : 1.

Check out Admiral Markets’ most competitive conditions on the DAX30 CFD and start trading on the DAX30 CFD with a low 0.8 point spread offering during the main Xetra trading hours!

To test Admiral Markets DAX offering in combination with the described strategy above register for a free demo account today and experience the live market risk free!

Investing in Forex with Admiral Markets

Admiral Markets offers professional traders the ability to trade with a custom, upgraded version of MetaTrader 5, allowing you to experience trading at a significantly higher, more rewarding level. Experience benefits such as the addition of the Market Heat Map, so you can compare various currency pairs to see which ones might be lucrative investments, access real-time trading data, and so much more. Click the banner below to start your FREE download of MT5 Supreme Edition!

Download MetaTrader 5 and begin trading today!

Disclaimer: The given data provides additional information regarding all analysis, estimates, prognosis, forecasts or other similar assessments or information (hereinafter “Analysis”) published on the website of Admiral Markets. Before making any investment decisions please pay close attention to the following:

  1. This is a marketing communication. The analysis is published for informative purposes only and are in no way to be construed as investment advice or recommendation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
  2. Any investment decision is made by each client alone whereas Admiral Markets shall not be responsible for any loss or damage arising from any such decision, whether or not based on the Analysis.
  3. Each of the Analysis is prepared by an independent analyst (Jens Klatt, Professional Trader and Analyst, hereinafter “Author”) based on the Author’s personal estimations.
  4. To ensure that the interests of the clients would be protected and objectivity of the Analysis would not be damaged Admiral Markets has established relevant internal procedures for prevention and management of conflicts of interest.
  5. Whilst every reasonable effort is taken to ensure that all sources of the Analysis are reliable and that all information is presented, as much as possible, in an understandable, timely, precise and complete manner, Admiral Markets does not guarantee the accuracy or completeness of any information contained within the Analysis. The presented figures refer that refer to any past performance is not a reliable indicator of future results.
  6. The contents of the Analysis should not be construed as an express or implied promise, guarantee or implication by Admiral Markets that the client shall profit from the strategies therein or that losses in connection therewith may or shall be limited.
  7. Any kind of previous or modeled performance of financial instruments indicated within the Publication should not be construed as an express or implied promise, guarantee or implication by Admiral Markets for any future performance. The value of the financial instrument may both increase and decrease and the preservation of the asset value is not guaranteed.
  8. The projections included in the Analysis may be subject to additional fees, taxes or other charges, depending on the subject of the Publication. The price list applicable to the services provided by Admiral Markets is publicly available from the website of Admiral Markets.

Leveraged products (including contracts for difference) are speculative in nature and may result in losses or profit. Before you start trading, you should make sure that you understand all the risks.