Jesse Rogers explains the first candle rule, a trading strategy that uses the opening 5-minute candle's high and low to set a range. Traders watch for a fair value gap breakout on the 1-minute chart, wait for a pullback, and enter on an engulfing candle with a 3:1 risk-to-reward target.
Between 9:30 and 9:35am EST.
Fixed 3:1 risk-to-reward.
One tick beyond the candle that retested the fair value gap.
I only trade this one candle and it consistently gives me days like this, this and this. It is stupid simple and I trust it more than any strategy I've tested over the last nine years that I've been trading. And if you're struggling to stay consistent, then this is exactly what you've been missing. Your trading approach is just too complicated. But that ends today. It's called the first candle rule and it gives you the three foundations of any good strategy. Your range, as in where to trade, direction, as in which way the market will go, and last but not least, your execution. Where to put your entry, stop loss and take profit. Here is how it works. You mark out the high and the low of the first five minute candle that forms between 9:30 and 9:35am EST. And these two levels are all you need to establish your trading range. Then we drop to the 1 minute chart and wait for a fair value gap to break out of this range. This shows us who is really in control of the market and and we want to be on the same side as them. Now, usually after an explosive move, the market always pulls back to test the gap. But this pullback is a gift because once we get a dig into the fair value gap, we start to look for our confirmation. And this comes in the form of an engulfing candle. This confirms that the break is real and the market will likely continue. We enter the trade and place our stop one tick beyond the candle that retested the fair value gap and and we target a fixed 3 to 1 risk to reward. Now save this video so you can study this simple strategy again and again.
