A trading strategy that uses the first five-minute candle at market open to set levels, then waits for a fair value gap and engulfing candle before entering with a 3:1 risk-to-reward ratio. The creator stresses testing the method yourself.
At 9:30am (the first five-minute candle of the trading day).
One tick beyond the retest candle's low.
3:1 fixed risk-to-reward.
Your time frames fail you because you're looking at too many. But real profitable trading doesn't work like that. It's much simpler. And all you need is this one candle. Now, step number one is simple. You get everything that you need to trade in the first five minutes of the day. So you're going to mark out the first five minute candle, which is starting at 9:30am Take its high and it's low, and these are the levels that you'll use to trade. Step number two is you're going to wait for a break. Now, we need a very specific behavior to confirm our break. And no, it's not a candle closure and it's most certainly not just a wick. What we're looking for is displacement, which shows us who is in control of the market, whether it's buyers or sellers. To confirm displacement, we use a simple pattern called a fair value gap. This occurs when you have an expansive middle candle with gaps on the wick before it and the wick after it. And once this happens through the first five minute candles, high or low, we then wait for a retest into the fair value gap. Once we get an engulfing candle that completely covers the retest candle, we have confirmed that this break is a good one and it's likely to continue. We can enter our trade place our stops one tick beyond the retest, candles low and target a fixed 3 to 1 risk to reward. Just like I told you, a stupid, simple strategy. And I want you to go test this and see just how powerful it really is. Save this video for when you're testing it. That way you can make sure that you get it right.
