Just wondering does anyone trade 5 minutes timeframe based on candle formation only?
Also whilst here does anyone use one confirmation with it if so what formations would you suggest for the following (based on 5 mins timeframe)
MACD
RSI
Stochs
Bollinger Bands (mos important)
Many thanks all
cheers thanks
There are many ways that a trader can trade the opening bell. One strategy that I like to use to trade it is the opening five minute candle. If you have been following this blog and our trades you will hear the opening five minute candle mentioned a lot. We trade it frequently. Here is the process that I use.
#1 I identify my bias for the open. As an example, if the futures are coming up off a bottom as they did last Friday then I have a bias to the upside. There maybe situations where your bias is different than the market. I teach my students how to scan for stocks both on the short side and long side to play the opening five minute candle.
#2 Let the first five minute candle play out. Just watch it. (There are times when you will want to trade the candle before it plays out but that is a more advanced topic.)
#3 Draw a line at the top and bottom of the candle. I have a script that does this for me in TOS. Basically you are bracketing the first five minute candle.
#4 Remember you set a bias as to the direction. If the next candle breaks the five minute candle in the direction of your bias then you go long or short in that direction.
#5 Stop is a break below the first 5 min candle if long or a break above the first five minute candle if short. (If the range of the first five minute candle is too large then I skip the trade or adjust my stop.)
I trade price action on 5 and 1 min charts. Using supp/ress, candlesticks patterns , fibbs and stochs.