A trader shares a three-step setup for a 5:1 reward-to-risk ratio: wait for consolidation below resistance, confirm breakout with a volume spike, then enter on a sharp retest rejection. The setup repeats at the same time daily under identical conditions.
I perfected my strategy and it consistently started giving me 5:1 R trades. I honestly feel like I broke the market. And the crazy part about it is that it works at the exact same time every single day and it does the exact same thing. Step 1, I like to wait for price to consolidate just beneath a resistance level. It's not going to happen every single time and that's fine. But when it does, I like marking the high and the low of the range. Then step 2 is waiting for price to break above this high, and I immediately check the order flow and read the volume. If volume spikes, real buyers just stepped in and it confirms the move likely to have continuation. If volume doesn't spike, the market will likely return to the consolidation. And in this case, I could just move on with the setup. And then step 3 is my entry point. I like waiting for price to retest the level, reject sharply, And as soon as it rejects, I enter once the market confirms it with the order flow. Stop goes tightly below the retest low, and that way I aim for a high reward and low risk trading opportunity.
