The Dark Side of The "9:30AM Candle" Scalping Strategy (Backtested 1,000 Times)

I've been trading the 9:30 a.m. one candle scalping strategy for the last 7 years. It's the one simple trading setup that shows up every day, is reliable, and consistent. But this candle also has a dark side. And if you don't know about it, it can be one of the fastest ways to blow up your trading account. And the problem is 90% of new traders fall for this trap. In this video, I'll share exactly how I trade the 9:30 a.m. candle strategy while avoiding the trap most traders fall for by using a simple trick to turn this from a losing to consistently winning setup. And then at the end of the video, I'll show you the results of a 1,000 trade back test, comparing the old 9:30 a.m. strategy you most likely know of with the new, refined, and simple 9:30 a.m. 1 candle strategy. So, the 9:30 a.m. candle scalping strategy has helped me have results like this, this, and this. And remember, these results are from this month. However, one thing you have to understand is I have been trading for 7 years. So, everything that I'm going to teach you in this video has taken me years to learn and perfect. I did not learn this overnight, but using the system I'm going to teach in this video is what helped me get these results. So, the 9:30 a.m. candle strategy helps me find the market trend. It helps me find simple but winning trades. And most importantly, it gets rid of the low quality losses that other setups and strategies may have, especially if you're a beginner trader. So, if the 9:30 a.m. scalping strategy is so profitable for me, why do 90% of traders lose trading the 9:30 a.m. open? And why is there a dark side to the 9:30 a.m. candle that not many traders talk about? Well, let's take the average trader and say that you come into the day and you're a little bit more informed. You have a clear plan for the day. You create a thesis for the day and most importantly, you have an entry model. So, you have all three of these things and you trade the 9:30 open, which is the New York Stock Exchange open. So, if we were an average trader coming into this day, we would think there's bearish market structure because, as we can see here, there's a high, then we create a low down here. The next high we have is right here. This is lower than the previous high. The next low we have is right here. This is lower than the previous low. So, as we can see, we have lower lows and lower highs. And once again, a lower high, a lower high, lower lows, and this continues to the downside. So, we can see this stock is clearly moving to the downside. And we do have that bearish market structure. So, we have a pretty clear thesis that this trade is going to be a downside move. Now on top of that we can see weak price action once again because we are moving to the downside. You can see these downside candles big range candles which simply means these downlosed candles are bigger than the candles that are moving the stock to the upside. And you can see this once again bigger down candle bigger down candle. So we're seeing weaker price action and this is giving us a clear plan that we are looking for that downside move. So, this is where we need an entry model. And we know we want to go short into the open, which simply means that we are looking for a downside move into the 9:30 a.m. open. Now, to go short on the 9:30 a.m. open, we know that this is the last support level that we had. This is where the stock was holding up before we had another leg to the downside. Because of this, this support level is now going to be used as resistance. So when the stock comes up into this resistance level, this is where we would want to short the stock for a move back down into low of day and continuation. So now we have a clear entry model. We have a clear thesis and we have a clear plan because we just identified these three components. However, as you can see, when the 9:30 a.m. open happened, we can see a little bit of weakness near our resistance. This is where we would have entered. But right after that, the very next candle, we got stopped out and this trade moved all the way to the upside. Now, coming into the day, we had a clear plan, thesis, and entry model, but we still lost. And this is what happens to an average or a new trader. They lose even though they come into the day with a clear thesis and a plan. And for me, I used to lose these trades, too. And it took me years of losing to finally understand that the 9:30 a.m. open can be simplified into one candle. That's it. All I need for the 9:30 a.m. open, instead of focusing on all of that is just one candle. And like I just said before, we were focusing on everything. So once again, the 9:30 a.m. was around here. And we can see how aggressively those buyers came in earlier before the 9:30 a.m. open. You can see that this was actually a very weak move to the downside. So, because we were focusing on this previous move, we completely missed the actual entry to the upside where we could have actually had a very nice result within our trading. And remember, when you're focusing on everything, it's hard to focus because you don't know what to look for. Sometimes you're looking for market structure, then you're looking for price action, then you're looking for an actual entry, then you may change your entry model. So, it is very hard to focus. And this is something we don't want, especially when you're trading in real time. You want simple trades and you want repeatable trades. And this is why for me, all I do now is mark out the first 9:30 a.m. candle. I don't care what's happening before 9:30. I am going to mark out the first 5minut 9:30 a.m. candle. And all I will do is mark out the high and low of the 9:30 a.m. candle on the 5minut time frame. Now, I've talked about this strategy on my channel before. However, where most traders get confused again is because they mark out the 5-minute high and low, they believe all they have to do is when we break out of the 5-minute high or the 5-minute low, they buy or they sell. And this is why when they see a stock and it is very aggressive, such as this move right here, they will see the candle close above the 5-minute high in this example, and they will buy the stock looking for continuation back to the upside because they saw the candle closure above the 5-minute high. But here's the problem. Even this strategy failed. And you can see you got rejected right at that 5-minute high. And the 9:30 a.m. strategy fails. And then traders will say that the 9:30 a.m. candle strategy doesn't work, but they are trading it wrong. And this is why in this video, I'm going to give you simple tricks and tips that I've implemented into my 9:30 a.m. strategy to help increase my win rate using the system. So, the reason that this one does not work is because this was a false breakout. So, you bought on the breakout, but here's the problem. There was no confirmation. All you did was buy when the candle closed above the five-minute high and you were simply chasing the break. You didn't let buyers present themselves to you. You impulsively bought hoping that the trade would continue to move to the upside. But there is no repeatability in this entry model. It is too hard to predict whether the stock will continue to move to the upside or not. And this is why we need to add a couple factors to make this a higher probability trade. For us, the goal with the 9:30 a.m. strategy is to find high probability winning trades in about 90 minutes per day. Because for myself personally, I only trade for about 90 minutes. And this is why when I trade this strategy, I try to make it as repeatable and mechanical as possible. I will not buy the breakout, but rather I only buy the retest. And this makes it a much more high probability trade because it confirms that buyers are indeed stepping in near the 9:30 a.m. open. And I will wait for strong price action to confirm my entry even more. And this gives me the highest probability winning trades using the 9:30 a.m. candle strategy. And it helps me avoid the dark side of the 9:30 a.m. open because we all know how volatile the stock market moves right at the open of the day. So, how do I trade the 9:30 a.m. strategy? Well, I mark out the high and low of the 9:30 a.m. candle. Once again, I've already talked about this, but this is simply going to be the 5-minute high and the 5-minute low. In this example, we're on the 1 minute time frame. Then, we have to wait for a clear direction in the markets. This means that we have to wait for either the break above the 5minut high or the break below the 5-minute low. For step two, we wait for a candle closure above the 9:30 a.m. candle. This can be of course on the 1 minute time frame as well. But remember the candle must close above the level. So in this example here, you can see that this candle wicked above. This is still rejection. You need the candle body to close above the 5-minute high. In this example, the confirmation candle for the candle closing above would be this candle right here. And we're not just buying into that candle. That candle confirms that yes, we have closed above, but now we need to wait for the retest of the 9:30 a.m. high or low. In this example, of course, that's going to be the high. And as we can see, this stock came back. We came back for the retest. We got strong price action right here. Our stop loss was simply a break of the candle that retested the 930 open. And our profit targets here were a 2-hour multiple, which simply means for every $100 we were risking, we were looking to make $200 of profits. And this was a very simple trade, perfectly executed. So, now that I've explained the dark side of the 9:30 a.m. candle scalping strategy, now I'm going to show you live trading examples comparing the old 9:30 a.m. strategy with the new and refined one. This way, you'll be able to see how to refine the system in the real markets. And then at the end of the video, I'll show you the results of 1,000 back tested trades using the old strategy and the new strategy so you can see the results over a long period of time. All right, here we are on our first example and we're on the 1 minute time frame on Nvidia. And what I'm going to do is actually play out the first 5 minutes of the day. We can see that this is of course going to be the 9:30 a.m. open. And like I said, for step one, we're going to mark out the first 5minute candle high and low. Here we can see this is the first 5 minutes. So we're going to mark out the high up here. And we're going to mark out the low down here. So now we have the 5minute high and the 5minute low. Remember, I'm going to show you the comparison of what happens if you buy the breakout compared to buying the proper break and retest to either side. So, for step two, we now have to wait for that breakout to occur. Okay? So, in this example, this is the breakout. Now, most traders will actually end up buying this breakout. This is why they failed using the 9:30 a.m. strategy. But in this video, I want to give you a comparison of what happens when you buy the breakout compared to buying the proper break and retest. So, because this did break out, this is where most traders would actually end up going short on this position. For our stop loss here, it's just going to be a break back above this 5minute low and this pivot structure right over here. And for our profit target here, we need at least a 2-hour multiple. In this example, we'll simply target out 18875. This gives us about a 2.57 risk-to-reward trade, which means for every $100 we're risking, we're looking to make $257 of profit. Let's see what happens. So, in this example, we can see we broke out. However, the breakout was invalidated very quickly. We reversed and now you can see we actually ended up hitting our stop loss. So, we actually ended up losing $100 on this trade because we bought the breakout. And on top of that, when we did come back for the retest, there was no retest. So, if we actually used the refined setup, this would have been an unnecessary loss that we could have been able to avoid if we had implemented the rules that I've talked about in this video. But let's see if there is a retest that does set up on this specific day. And here you can see now that we've gotten that fake out liquidity, which I talked about in the slides earlier on in this video, we are actually getting the break above and the retest. So, you can see the breakout and the retest with this candle right here. And this is the trade that we can enter because now we have validated the breakout with the 1 minute candle closing above and we got the retest with strong price action because we can see this lower wick right here. So we can enter into this trade right here. Our stop loss simply has to be a break back below that 5minute low and we need at least a 2-hour multiple. In this example, we can target out that 192 level. This means we're risking about $100 for about $49 of potential gain. Let's see exactly what happens on this trade. And just like that, by simply adding the retest and waiting for strong price action and confirmation of the breakout, you can see we would have been able to ride this trade for a move to the upside and make $49 by implementing three simple rules. So, this was the first trade I wanted to show you. Let's go over to another example and then I will show you what would happen over 1,000 trades comparing both these setups. All right, here we are on the second example. And once again, we're going to do the exact same thing where we're going to wait for the first 5 minutes of the market to develop. Once the first 5 minutes of the market has developed, all we have to do is mark out the high and low. And now I will be comparing both of the strategies. So in this example here, you can see that this candle is breaking above the 5minute high. Therefore, we're not going to wait for the retest. We're simply just going to enter in on this candle here. Our stop is going to be a break of that candle. And we need at least a 2-hour multiple. In this example, that 2-hour multiple comes near the 491 whole psychological number. Let's see what happens on this trade. Once again, we're risking about $100 to make about $200 of potential profit. And unfortunately, you can see we would have lost this trade right away because there was no retest and we did not wait for confirmation at all for this entry, making this a lowquality entry and making this an avoidable entry if we simply waited for the proper retest. Now, let's see if we can get a potential retest on this trade. And as we can see here, we actually broke back below, but now we are getting a retest. We came back into this area, weak price action because we can see that upper wick here. This is where we can look to go on a short side move. Our stop loss simply has to be a break back above that candle and we're looking for at least a 2-hour multiple. In this example, we're simply going to target out that $482 whole psychological number. We're risking about $100 to make $234 of profit. Let's see what happens. Once again, this trade was a great example of implementing our rules into the 9:30 a.m. strategy to make it a higher probability winning setup. Now, I'm going to show you one more example to really make sure you understand how the strategy works, and then I'll show you the 1,000 trade back test comparing both strategies. All right, here we are on the last example for the 9:30 a.m. strategy. Once again, all I'm going to do is mark out that 5minut high and the 5-minute low. Then, we're going to look for a breakout in either direction. In this example, we can actually see we got a breakout to the downside. So, this is where we can actually look to enter into a short position. Our stop loss would simply be break above the candle we're entering in on. And our profit target needs to be at least a 2our multiple. And hopefully at this point of the video, you can see how simple our refined setup is. And the reason why it's such a high probability setup. Now, let's actually play out this trade and see what happens. Unfortunately, this one does lose once again. So, we would have lost another $100 if we blindly just bought the breakout. And this is why we want to add the retest. Now remember, all the trades that I'm showing you are actually trades that I've taken live myself in the real markets in the accelerator where I live trade every single day in front of hundreds of traders to help them understand these strategies in the real market in real time. And I also started a brand new YouTube channel. The link is going to be in the description where I break down every single trade that I've taken this year using these simple strategies and I get my watch list for the trades I'm looking at for the upcoming week. So make sure to subscribe to that second channel down below. But here in this example, we can see unlike the other examples, this one didn't break to the upside this time. We actually broke to the downside again, but this time we're retesting. So the first time we bought the breakout with no retest or strong price action, but this second time we broke out again to the downside and we're actually retesting. So just because you fake out doesn't mean you're going to go all the way back to the upside. In this example, we simply were a little bit too early to this trade. For the strategy to work, all we need is the break below and the retest. And in this example, we got it. So we would actually enter into this trade here. Our stop loss would simply just be back above that 5-minute low. and we need at least a 2 hour multiple. In this example, we're just going to target the same profit target we had earlier for about a 3.85 R multiple, which means we're risking about $100 for $385 of profit. But you can see in this example, because we waited for the break and retest, we actually increased our risk-to-reward as well, meaning we're risking less money to make more profit. Let's see exactly what would happen on this trade. And in this example here, this trade worked out extremely nicely to the downside using the break-in retest. And if we simply implemented it, we would have been able to avoid this loss as well. But this trade worked out extremely nicely. So now that I've shown you the dark side of the 9:30 a.m. candle and examples in the real market, let me show you the comparison of both the setup if you traded them 1,000 times. So here's the 1,000 back test results for the old strategy. This was 1,023 trades, 319 winners, 704 losers with a 0.6 profit factor. You can see the net daily P&L and this was an overall negative strategy over a 1,000 back test result. And this is once again just trading the breakout, not waiting for confirmation or the retest. And you can see over a,000 trades, we would have actually lost money. And this is once again compared to the new and refined scalping strategy that I taught you in this video with the retest with 1,38 trades, 773 winners, 533 losers, 4.15 profit factor, and this is the daily P&L. So, if you want to learn more about this strategy or you want to learn how to start day trading the right way, make sure to click the video on screen now. If you got value from this video, make sure to leave it a like. If you have any questions, put them in the comments down below. Make sure to follow me on Instagram and Twitter for more education. Subscribe to the channel and I'll see you next week with a brand new