It was 9:16 a.m. ET and we were on a live webinar. One of our Elite members asked “should you take an RCT this close to the open?”
Let’s break it down (there isn’t a clear yes or no answer)…
Why Now Could Be the Best Time in 25 Years To Be a “$1 Trader”
Table of Contents
The Big Picture
We have clear criteria for the Red Candle Theory (RCT) pattern. And the stock in question put in a solid RCT.
But as much as the RCT is one of the easiest trades to plan, there’s only one right answer a responsible teacher can give…
Successful Traders Don’t Deal In Absolutes
The way I teach, the best time to trade premarket RCTs is from 7:00–9:00 a.m. ET.
Now, that is not an absolute. It depends on experience, risk tolerance, and other factors. There are no absolutes in trading, okay?
There are very few clear black-and-white, yes-or-no answers. But there are a lot of shades of grey.
So, the easy answer to the question is: I wouldn’t consider taking an RCT at 9:16 a.m. to be ideal.
Why? Because I believe that would be a low-odds trade.
Successful Trading Is a Probability Game
We have to accept that we deal with a lot of variables. And you’ve got to manage those variables.
That’s why it’s so important to learn the setups, study the patterns, and track data. Anybody can do it, it’s just hard work. But most people ignore that and don’t pay attention to the odds.
Let’s go back to the question about taking an RCT so close to the open.
By the time I got to the question, the person asking had roughly 10 minutes to get into the trade and get out before the open.
Why get out before 9:30 a.m.? Because…
Odds Are, It Tanks At the Open
I teach students to avoid trading anything between 9:00 a.m. and the market open.
The rule I follow (and teach) is, if you buy in premarket, sell in premarket. That’s because years of experience and data tracking tell me that a high percentage of these stocks tank at the open.
I don’t want to be in a stock when it tanks.
That said, if you find yourself chasing an RCT (or any other pattern) into the open, remember…
One Trade Won’t Make Your Career
But it can end it.
Never underestimate the ridiculous stupidity of chasers. You might have a massive winner by chasing, but then you go on to lose 99% of trades where you chase.
Here’s what will happen with chasing…
Either you’ll recognize the odds and stop doing it, or, you’ll blow up your account and quit.
At the very least, you’ll have to start over.
My Take
Professional traders know the odds. They take trades when the odds are in their favor.
Now, that doesn’t mean you’re going to win 100% of the time. You will lose trades.
But if you learn to play the odds, and develop good risk management, and stay in the game long enough, it can be VERY rewarding.
Watchlist
Wetour Robotics Limited (NASDAQ: WETO) was a momentum mover yesterday with all the news flow around robotics and the AI build-out.
WETO 10/7/26 5-min candles, support and resistance
WETO consolidated around VWAP going into the close. It’s set up for a squeeze past major resistance at $1.29. I like a break of $1.25 for an entry, with risk at $1.15.
On My Radar
- Meta’s Muse is topping app stores as the masses explore agentic AI
- Jaguar lost its iconic roar
- Elon is getting a well-deserved National Medal of Science award
- This tiny golf-course stock could benefit from the Pentagon’s latest drone program