Jesse RogersFounder and CEO of Smart Trading Blueprint

Why Most Traders Fail At Trading

16 Jan 2026 · 1 min

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1:26

The first candle rule uses the market's opening 5-minute candle to set the day's key levels. Watch for a one-minute fair value gap break, wait for a retest engulfing candle to enter, stop one tick below the low, and target a 3:1 risk-to-reward ratio.

Questions this video answers

The 5-minute candle that forms between 9:30 and 9:35am EST (New York Standard Time).

A 5-minute chart to mark high/low and the 1-minute chart to confirm breaks and entries.

A fair value gap on the 1-minute chart (not merely a candle close or wick).

An engulfing candle that engulfs the retest candle which traded into the fair value gap.

One tick below the low (implied: of the first 5-minute candle or the entry-specific low).

Chapters

Most traders fail because they're looking at too much. But after trading for nine years, I realized something that changed everything, and that is that you only need one candle to trade every single day. Let me explain how that's possible. It's called the first candle rule, and it uses the first five minute candle to give you your entire trade. As in where to enter, where to put your stop, and where to target. And it does this in three simple steps. First, mark the high and the low of the five minute candle that forms between 9:30 and 9:35am in EST or New York Standard Time. These two levels become your entire trading roadmap for the day. Step two, drop down to the one minute chart and wait for a break. Now, to confirm a real break, we need a specific type of behavior. And no, it's not a candle closure and it's definitely not just a wick. What we're looking for is a fair value gap. This shows us whether buyers or sellers are in control and we want to be on the right side of the market. Once this happens, we move to step number three, which is our trade entry. First, we're going to wait for price to dig into the fair value gap gap, but we're not going to enter just yet. We are waiting for one confirmation to filter out the losing trades. And that confirmation is an engulfing candle. Once the retest candle that traded into the fair value gap is engulfed, there is our entry. We place our stop one tick below the low and we target a fixed three to one risk to reward. Now, I want you to save this so you can study this strategy whenever it comes time to trade.