First Candle Rule Trading Strategy

Introduction

• Objective: Learn a simple and consistent trading strategy called the First Candle Rule.
• Goal: Enable you to make consistent profits with a simplified trading approach.
• Application: Works in all markets - stocks, options, futures, forex, crypto.
• Trading Time: Only 9:30 a.m. to 11:00 a.m. Eastern time.

Key Concepts

Strategy Overview

• First Candle Rule: The first 30-minute candle of the day determines trade direction, entry, stop-loss, and take-profit levels.
• Time Frames:
  • 30-Minute Time Frame: Used initially to identify high and low of the candle.
  • 5-Minute Chart: Used to wait for a break of the levels identified in the 30-minute chart.

Steps to Execute the Strategy

1. Identify 30-Minute Candle:

   • Draw the high and low of the candle between 9:30 a.m. - 10:00 a.m.
   • Use Trading View to select the 30 minutes option.

2. Switch to 5-Minute Chart:

   • Wait for a break of either the high or low levels from the 30-minute chart.

3. Fair Value Gap:

   • Look for a fair value gap which is a gap caused by an expansive candle.
   • Enter the market when the candle closes that confirms the gap.
   • Setup stop-loss at the base of the candle bodies, not the wicks.
   • Aim for a fixed 2:1 return.

Detailed Examples

• Example Trade: Entered at 10:05 a.m., closed at 12:10 p.m., profit of $2685.

5-Minute First Candle Rule

• Steps:

  1. Draw high and low of the first 5-minute candle (9:30 - 9:35 a.m.).
  2. Switch to 1-Minute Chart, wait for a break of these levels.
  3. Look for a retest or fair value gap for confirmation.

• Example:

  • Entered market at 9:36 a.m., closed at 9:53 a.m., profit of $525.

Retest Style Entry

• Wait for the market to break through levels and retest back into the level.
• Avoid trades if the market closes back into the range without retesting.
• Example: Made $500 in 4 minutes on a short position.

Back Testing Results

• Monthly Trading Outcome: $15,000 profit trading this strategy over a month.
• Drawdown: Never exceeded $1,300.
• Time Investment: 90 minutes or less of trading per day.

Additional Opportunities

• Free Community: Join a community for consistent and confusion-free trading.
• Direct Mentorship: Options available to work directly with the presenter to become a funded trader.

Conclusion

• Call to Action: Encourage viewers to join the community, apply for mentorship, and subscribe for more content.
• Closing Remarks: Reaffirm dedication to helping viewers become profitable traders.

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• Next Steps: Consider applying the strategy in a demo account to build confidence before live trading.