A pre-market strategy called the bouncing setup: find a key price level, wait for the wick to dip below it over 2-3 candles while candle bodies stay above, then enter. Set your stop-loss at the wick's lowest point, keeping the distance tight to minimize risk.
Price is making this type of move. We have the level right there, we have the level right there. On the pre-market, I see that the price is closer to this one level. That means that I'm going to be looking for the price to retrace, come back to this one level, and provide me with some entry. For that, I'm going to be using just bouncing setup, and I need 2-3 candles. The wick below the level, but the bodies are keeping it above the level. I can be looking for the lowest part of that to keep it as my stop loss, but I always have to check if the distance between my entry, potential entry, to my stop loss, is it big or small? Because I want to keep my stop loss as small as possible. Logically, it's the sellers that are trying to push the price down, but buyers are just resisting and keeping the price above the level. The sellers that are getting weaker, weaker, and weaker. At some point, sellers are going to be exhausted, but the buyers, they're still sitting at the level. And at some point, no sellers, only buyers, and price can start to push to the upside. So that's the goal of the setup, the bouncing setup.
