The Only OPENING CANDLE Strategy You Will Ever Need

Today, I'm going to show you one simple candlestick signal that happens every single day right before the market opens. It's called the overnight squeeze candle. And all you're going to need for this one is just one timeframe and one candlestick. That's it. But you know what? It's more than just a candlestick signal. It's also a precursor to how the day's events may unfold. And with this, it can help you start to build winning trades, not to mention help you eliminate some of those trader problems we all have when we start, like FOMO, anxiety, self-doubt, numerous other things that continue to make us angry, right? So in today's video, I'm going to show you how to find and how to use the overnight squeeze candle. The exact same way I learned it over 20 years ago when I started trading and the same way that I use it today. And as always, after I show you the overnight squeeze candle, I'll show you how it works in a real live market. So why don't we just get started? So we're going to break this strategy down into three simple steps, starting with how we are going to identify the setup in the first place. Step number two, we're going to talk about the exact execution signal. And step number three, we'll talk about the profit targets and the exit. Now I'm going to do something else here for all of those that stick around to the very end. I'm going to include a bonus step for something you can put in there that'll just give you that little extra confidence to really maximize this strategy. So let's get started with step number one. And there are two main keys that we must do correctly. Otherwise this thing just ain't going to work as well. These are very important steps. And of course that's why they're step one. The first thing that's important is the overnight session. Now you might say, what, what's so special about the overnight session? Because in the overnight session, you're going to find a clue that is a dead giveaway on what's going to happen when the market opens. There's a moment where somebody gets forced, a major player's hand gets forced, but guys, that's, that's the main key because that's something that 90% of retail traders do not know. In fact, there's a lot that aren't even looking at pre and post market data in the first place, which you're going to realize is a huge mistake if you're not doing it. So please start doing it as of now, but you're going to see why it's so valuable. Number two, we're going to find this clue specifically on a four hour chart. Now we're going to use a smaller chart to dial in that execution to the penny, like a five minute or a one minute. I like to use the five minute, but if you may ask why the four hour is because it bridges the gap between the daily and your shorter timeframe. Let me show you what I'm talking about right here on the screen. I have Nvidia before the market opens. This is what we're looking for. The four hour charts on the top, five hour charts on the bottom. Also, if you're new to that platform and you don't use thinkorswim, the gray highlighted areas are the overnight session from post-market to pre-market. And the black area is the official open of the market. And again, this strategy is going to work for everybody, no matter what market you trade, just take your overnight session. So if you're trading the Asian open, use the Asian overnight session, London open, London overnight session, New York, New York overnight session. Now let's get down to business. I want you to take a look. I'm going to open up this four hour. Is there anything that you can see with your eye? That is somewhat of a giveaway. Now let's go back to the previous four hour candle and let's take a look at this low between 127 and 126. As always, we want to start looking left and you're going to see this area has been defended over the span of a couple of days, right? Clearly that support. Now you guys probably know that you've no support and resistance, but here's the clue. This move happened in the overnight session. Now again, what's so special about the overnight session? This was two o'clock in the morning. So think who bought this at this size at 2 a.m. It isn't a physical bodied individual. Retail traders aren't up at two o'clock, three o'clock in the morning, but some might be buying big heavy positions. It was most likely an algorithmic order that was already staged at that level because that's a huge piece of volume. And mind you, this is no news. So if you have earnings, I should say, scrap that off. It doesn't count if it's earning. No news. Somebody was forced into most likely defending that position that was bought back here on these last two days. And whoever this is, isn't a retail trader. Think about that. Just let us sit for a second because it's going to start to make a whole lot more sense. Now let's think about step number two. You've identified this buyer and there's a lot of charts right now that look like this today. I just pulled this one up because I think this is what I'm going to trade with something else and we'll get to that. We know this. So go like the box theory. Go with the checkmark strategy. I want to try to get as close to this person as possible with my buy. That's my stop loss is way down in here, right? Which is step number two is the entry. What I want to see to verify this, this is the important part, step two. I want to see this person get pushed around one more time at the open. That's what I want to see, okay? Because that will give me the extra verification that there is nothing on this earth that's going to move this person off this position. That's what's going to give us the key. Think about that. It's not just a couple of lines drawn on a chart. Oh, that's by there. There's somebody there, your guardian angel. So I'm going to look for this. So as soon as the market opens, I already have my eye trained for what I'm looking for. And this is the one candle, one candle that I'm going to look for on this chart is somewhere in this area. Let me back up. I don't want to get ahead of myself. My apologies. It doesn't have to test this person to the penny would be nice. You just need to get down in here somewhere into half of this candle, one 29s or lower into the one 27s. You just need to print down in there. That's all I need to see. Once you get to that number, I'm going to be looking for that candle to develop. And that candle is none other than the mighty John wick. I did a video about this here on the channel, the John wick strategy, which to some of you learning technical analysis is the hammer candle. Now I know a lot of you already know what the hammer candle is, but as with all technical analysis, the greatness that it is comes from the context. If this, why I want this is because it represents everything I need to know to make a quality decision. So for example, I'll try my best to draw this. At one point, this thing was, let me get a red marker here was completely full bodied red, right? And everybody who buys this at the open is completely getting shellacked. And then all of a sudden, when you get back into that big buyer, you're going to see this thing retrace itself back up. The only signal I'm looking at for a five minute chart is half of this candle. If they retrace half of this candle, I'm in right there. I don't need any more confirmation. I do not need an indicator. I do not need anything else. You get me down there. You hit that button. I'm in that trade. Stop is below. Simple as that. That is it. Okay. Now I have two candles drawn on the other side. If you're looking at a one minute, because one minutes have a lot of noise, I'd like to have a secondary candle that tests. It doesn't have to be a matching, like I've drawn a matching hammer candle. It doesn't have to be that way. Just any dip that revisits this person and shows their intentions. Okay. So what we're going to do here, that's step one and step two. And number three would obviously be the target. We're going to use that for our, that if we can get somewhere in the dip here. Okay. We are going to look for target one at the tip of that four hour candle. Target two at the tip of this four hour candle and target three somewhere in this vicinity, because it should start clicking back. Each one of these bars. So we've got a little bit of time before the market opens. Let's come back. Let's see how this plays out in a real time environment. Okay. The market is open. Now we got our first five minute candle for our chart is on top. Five minute is on bottom. I'm going to be executing from the five minute pay attention to this candle. This is what we wanted to see, but it hasn't triggered yet in terms of an order. So to make sure everyone is not confused, what we need to see here on this candle is does this buyer come back? Now the thing about technical analysis, I said before, it's not literally, it doesn't have to just hit a certain number completely. For me, all I want to see is the slightest hint, the most subtle hint that guy's going to show up, that girl's going to show up, whoever this is. Watch this candle. Do we get it there? Do you see it? Do you see how it's starting to pick up off the bottom? But the tail of that candle, that wick is developing. All you really need is half of that candle to be retraced to enter. Now you can do different types of entries, right? You can do different formulas, but that lets you know they are in this trade. Now I could again, explore a little bit of the areas lower, but where's the selling momentum in this trade? This is a long, so let's see if we could just grab a piece of this here at 29.27. So using the targets, so let's first talk about risk. My risk would be wide on this all the way down towards the low of the day, but I don't think we're going to see the low of the day based off of a few things I'll share with you now. One is the buyer has now shown up for a third time on this chart based off of what we spoke about, correct? The other is the speed of that candle, which this lesson hasn't been focused around that, but there is not any selling momentum. So I'm looking at it like, here would be a thing I would like to share with everybody. Maybe it's a little bit off topic, but it's very important in your trading. You buy it, you're instantly down. So we're down a little bit on this trade and you've got this really wacky candle, but it isn't building momentum to the downside. Now, what we're going to do here is use the upper areas on the chart above this area right here for about one half of this position to be sold. And then potentially the very top of this bar for the other half. So in certain markets, you might not be able to get these types of targets, but in this one, we're going to try to focus because later I'm going to show you there's something about another formula here that indicates we're probably going to try to rally. And that's part of bonus number four, but these are the levels that we are looking at right here. So just real quickly about five, six minutes later, take a look at the trade. You're constantly having to verify whether your idea is still valid. So there we are. There are now two back to back candles. So let's say you botched the entry. You could make some sort of hybrid version to come back up here, but I think it looks obvious now at this point. And that's all I want you guys to know. You identify that somebody was forced into defending a position overnight for whatever reasons. It doesn't matter. And here you are at the open. They're doing the exact same thing. It's going to be very hard to get underneath of this level. Just moving forward here. You'll see first target already hit. Take a look at the bottom of this chart. Kind of looks like the check mark. If you remember that video, but the trade only took place because of the buyer was there. Now let me show you number four, the most important thing. Why the aggression, right? What was the purpose of hanging in there? It's the daily chart. If you can combine, and that will be step four, let me make it clear. If you can add one more piece of confluence, you're dealing with a whole different element. I'll explain. We had a four-hour viewpoint. We isolated it on a five-minute. Both that four-hour support and that five-minute support were simultaneously tested. Not just that, also the daily. You got into the base of the range on the daily as well. You had three pieces of confluence. That's the face. It may appear on a small one-minute or five-minute that you're being shaken out, but you're not. You might be shaken out, I should say, but you shouldn't be. All that data is there. The context, the confluence. You need that in order to say, this is the trade. This is the one that warrants the size. This is where I need to be with my trades, and I need to go in there. You'll see right there, that buyer isn't going to disappear. I'm going to end the video there. As always, I'm sure you may have some questions. I may have left some things out. Reach out to me if you can. I want to make sure that you understand what we are talking about here. I want to try to keep it as basic and as simple as I can. Sometimes, as the videos go on a little bit, maybe I start to use advanced slang. I don't want to do that. I want to make sure everybody understands what we're talking about. Again, in a recap, you're beginning by looking at the nuances in the four-hour. You're looking for a dip in the morning to test that. If you can combine it, it's not necessary to combine it every time with the daily, but if you can, it warrants more of your attention. For anything that doesn't fit that, you saw this on a couple of things today. For example, the NASDAQ futures, ES futures, they dipped a little bit further underneath of that. I don't prefer it to be that way. If it isn't there, don't take the trade. That's the whole point. Don't take it. If it breaks out, that trade's invalid. That strategy doesn't work. You'll have to use another type of a strategy, like a John Wick regular or a check mark or the box theory. You have to use some other formula, but if the setup is there like this in the pre-market, you got yourself something that's gold. You got something that in most cases is going to be 90% effective and you got something that you could lean into that's really going to change your career. Anyway, guys, on that note, let me say thanks for watching. Take care. Trade well. I'll see you soon. Cheers.