This “First Candle” Strategy Is Boring, But It Will Turn You Profitable

This boring strategy consistently gives me days like this, this and this. And I'm about to show you exactly how it is so stupid simple that even complete beginners can't mess it up. And it appears every single day. And today I'm going to show you the full strategy and do a one month back test to prove to you that it works. The first candle strategy has three simple steps. And to trade it you only need one setup on one time frame at one time of day. It's boring because you just do the same thing every single day. But in my nine year trading career, I've learned that boring and consistent trading leads to profitable trading. Step number one is to mark out the levels that we're going to look to trade from. And to do this, you're going to get to your desk right at 9:30am Eastern Standard Time. This strategy and the same time works in any market, whether it's futures, stocks, crypto or forex. And for this entire strategy we're going to stay on the five minute chart. So go up to Trading View and click this five minute button. And after you've waited for this first five minute candle to close, we want to mark out the high and low. To do this we're going to select the trend line tool here on Trading View. And then you just mark out the high and the low of this candle and these are going to be your two trading levels for the day. This brings us to step number two which is finding our trade entry. Now we're going to break this down into two parts. The first is to wait for a five minute candle closure through one of our levels. As you can see, this very next candle closes through the first five minute candle low. But this alone isn't enough for a trade entry. We need to wait for a retest. That way we avoid fake outs. And to get a valid retest we need a candle to trade back into the level but not close inside of it. As you can see right here, we traded into that first five minute candle low that we broke, but then the market moved aggressively away from it, closing outside of the range and waiting for this is huge for keeping a high win rate as you'll see later on in the backtest. And after we get our retest candle we're good to enter the trade. So you can go up here and click the sell button on Trading View since we broke through the low. And this brings us to step number three where we'll look for our target, where we want to take profit and place our stop loss which would be our invalidation when we're wrong. Our stop loss is going to go right at the middle of the range that's created between the first five minute candle high and the low. Do this. You're going to go over here to the left on your toolbar and select the fib retracement button. You're just going to draw this from the high all the way down here to that low. If the settings are at default, your fib tool won't look right. So make sure to take a look at these settings, screenshot them, and make sure yours are the same. The important thing is that you have 1, 0 and 0.5 checked and this makes sure that it marks the midpoint. Now, to place our stop loss, you're going to click this SL button and we're going to drag it right up here above that midpoint. And to place our target, we're going to go for a fixed 2 to 1 return. This means that on our winning trades, we'll make twice as much money as we lose when we're wrong. Now, in order to get this level that you want to put for your take profit, we're going to go over here to the left to the toolbar again, you're going to click the short position tool because we are in a cell which is a short, and you're going to place right on the candle closure right here. Now, where you originally click is going to show your trade entry and you can drag the stop loss up to where we have it up here. After you've marked your stop loss correctly, we want to drag down our take profit to where it says 2 to 1 risk to reward ratio. After that you click this TP button to actually set your order. You drag it down to that level and then you hit confirm. And now your trade is set up and all of the hard work is over. You just sit back and let the strategy do the heavy lifting for you and trust that it's going to play out in your favor. As you can see, the market ends up moving down to the take profit level. And, and this is a winning trade. And this one trade netted a profit of $5,700. Now let's go over two common mistakes that traders make using this strategy. That way you know how to avoid the losing trades. Now, let's talk about mistake number one first because it's the most common and mistake number two is a little sneakier and most people overlook it. So we have our first five minute candles high and low marked out. And as you Know, we want to wait for that first five minute candle closure. And as you can see, we get this first 5 minute candle closure immediately. Now, at this time, a lot of traders are going to go ahead and say, okay, cool, we're breaking out. I want to go ahead and enter the trade. But then what ends up happening oftentimes is that very next candle comes back down and taking these little senseless losses will kill you as a trader. So you have to avoid fomo. Now, that one's pretty obvious. Let's get into mistake number two. So after that fake out, the next step is to wait for a new five minute candle closure. And then as you can see, we trade into the high, but we don't close outside of it. And then we trade right into the low, but we don't close outside of it. As you can see, we test that low two more times and still don't close outside of it. So there is no valid trade. And then we hit right back into the high. Are you seeing this pattern? Because whenever we attempt to go outside of this range and the market consistently fails, that tells us that the market is chopping or consolidating. And most traders lose a lot of their money during these choppy market conditions. But I promise you, if you are patient, you will be rewarded. As you can see here, we got our closure outside of the range. But remember, we need a retest. And right here on this candle is where most traders absolutely destroy themselves. Because we've got our closure outside of the range. We've had a lot of failed attempts. So by this point, most traders are feeling a little bit of fomo. So what do they do? They go ahead and enter into the market and then what? The market comes right back and takes them out because you didn't get a valid retest. Remember, we need a candle closure and then we want the candle to trade into this level and then not close inside the range. And then even after that, you can see we tried to close outside the high again and failed. But finally we got our candle closure and our retest right here. So only after you get both, that is when you can enter the trade. We got our candle closure. We then get our retest candle that closed outside of our level and and we place our stop here at that midpoint. Our target is at a 2 to 1 risk reward. And then you just let the market play out and trust in the setup because now you've done the waiting and you have earned this win. While most other traders are chopping themselves to pieces because they have fomo. As you can see, these trades pop up nearly almost every single day. And all of these were recent examples that I showed you. But now let's look at the backtest to see how it performed over the last month. Before we look at this backtest, I need you to take a look at this disclaimer. So I did this backtest with one contract on NASDAQ over a little longer than a month period. As you can see, we had total of 20 trades. 70% of those trades were winners and it netted $10,000 over that period. Now, one thing that I really like about the strategy is that the overall drawdown was lower during this period. As you can see, we had a pretty nice equity curve, which is very good for psychology. It's also really good for prop firms which if you want 80% off of Prop firm challenges, I'll leave a link down in the description. But this strategy is very, very powerful. I'm not going to tell you it's the best in the world because that would be silly to say, but for a struggling or beginner trader, something that's this stupid simple can be an absolute life changer. If you've made it this far into the video, congrats because now you have a simple and proven strategy. But I want to be very clear, when you go out and trade this on your own, you're probably going to need a lot of practice to get it right. So if you want to join my trading room and watch me execute trades as the market is open and have every single trade that you take reviewed to make sure you're doing things correctly and be directly mentored by me, I'll leave a link to apply down in the description. Since this is a direct mentorship, not everyone will qualify, but if you do, I will put my money where my mouth is because I'm so confident in this system and I'll buy your first prop firm challenge and get you funded within 12 weeks. And if you do everything that I say and you still don't hit this milestone, I will personally trade with you until you do. That is how confident I am in my trading system. No matter if you're a beginner or a struggling trader, go ahead and click the link in the description and apply to see if you qualify. Also, if this video was helpful to you, go ahead and subscribe to the channel. This next week I'm going to be posting another video, diving even deeper on this strategy, going into some tricks that can help you avoid the losing trades and get more out of your winners. Also, if you want to learn more about trading, I'll leave a video here on the screen, and that is a full beginner's guide. And I have tons of other free stuff on my channel. Again, thank you guys for watching. Make sure to subscribe and I'll see you in the next video.