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Trading a seasonal advantage in the SP500 CFD with the open range breakout strategy

April 17, 2019 12:30

The SP500 CFD had a very strong start going into 2019, gaining more than 15% up to the week before Easter. In fact, the SP500 CFD was up more than 10% in the first three months of 2019 - which has happened only ten times since 1950, with the SP500 CFD closing higher for the rest of the year nine out of those ten times (with 1987 being the only exception).

When looking at the chart below, we not only see that the SP500 CFD gained for three months straight (which has happened just 19 times since 1950, with the SP500 CFD subsequently closing the year stronger 18 times). But we also see that the SP500 CFD didn't close Q1 below December's low, which has happened 34 times since 1950, and in all cases, market participants saw the full year rise higher in terms of total return.

Source: Admiral Markets MT5 with MT5-SE Add-on SP500 CFD Daily chart (between January 24, 2018, to April 12, 2019). Accessed: April 12, 2019, at 10:00pm 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 being said, traders could profit from the bullish price action once again on March 21, with a strategy you can learn more about in one of Admiral Markets' educational webinars.

But before we take a deeper look into the trading setup and the trade of this specific day, let's review the 3 steps of the S&P500 open range breakout strategy:

  1. Define open range between 3:30pm and 4:15pm (CET)
  1. Identify the advantage: based on the 15-min-EMA (10)
    • SP500 CFD trades above long
    • SP500 CFD trades below short
  1. 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 March 21:

  1. The high and low between 3:30 and 4:15pm (CET) can be found between 2,814 and 2,834.7 points, so the open range is 2,814 - 2,834.7

Source: Admiral Markets MT5 with MT5-SE Add-on SP500 CFD 15 minute chart (between March 20, 2019, to March 22, 2019). Accessed: April 10, 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 (blue 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 March 20, 2019, to March 22, 2019). Accessed: April 10, 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 20.7 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 taken out at 9:50pm (CET). Following this rule, we did as such and took the trade out at 2,857 points.

    This resulted in a profit for the day and for the setup of 22.3 points and a profit factor of 22.3 points : 20.7 points = 1.08 : 1.

    A final note: a profit factor close to and below one could be a warning sign that the move on the upside in the SP500 CFD could be a little extended and be a signal of becoming more careful in regards to intraday long engagements.


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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.
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