This Setup Up Feels Illegal... But it Works Every Day

Added: 2026-04-30

[00:00:00]Every single morning, the market gives you the same setup and most traders either miss it or trade it completely wrong. This setup is so simple, it almost feels illegal. But the truth is, this is exactly how I catch some of my cleanest, high probability trades with very minimal risk. Now, I used to overtrade like crazy, jumping into random moves, chasing breakouts, getting faked out consistently. And the worst part, the cleanest move of the day would happen and I wouldn't be in it. That changed when I simplified everything down to one core concept and that is break and retest. Specifically, the break and retest of premarket highs. But real quick, before we hop into the video, as always, if you guys do find value in today's video, make sure to smash that like button as well as clicking that subscribe and that bell icon. It would mean the absolute world to me. And if you haven't already, make sure to join the free Discord. That link down in the description. But let's go ahead and let's hop into the video. All right, so let me break this down as simply as possible. Before the market opens, you have what is called the premarket structure. This is where price builds a range, which is giving us our highs and our lows. Now, here's the key.

[00:01:16]Those premarket highs, they act like a level of liquidity. Everyone can see them. Breakout traders are waiting above or waiting below and shorts have stops above or below these levels. So when price breaks that level, there's typically going to be a reaction. But here's what most traders mess up. They buy the breakout. Trading breakouts, they absolutely suck. It used to work back in like 2021, 2022, but ever since 2022, trading breakouts, terrible. Most of the time you are going to lose money trading a breakout. That's just how it is now. So they end up buying the breakout pretty much right at the top and what happens? They get instantly pulled back on and stopped out of the trade. How many of you have been there because I know for a fact that I have.

[00:02:02]And that's why I don't trade breakouts anymore. But the real entry is not the breakout. It is actually the retest. And I'm going to show you guys some examples here in a little bit, but here's exactly how I trade this break and retest. Step number one, we want to identify our premarket high as well as our premarket low. And we want to draw a clean horizontal level at that zone. Nothing complicated. So we go up to Russell today. This is an actual trade that I took. This is our premarket high right here. We take our line. Boom, we draw it through. That's it. This is the highest point of price action in the overnight and premarket session. Therefore, this is our premarket high. So again, draw that clean horizontal level, nothing complex. Step number two is we want to wait for price to break above or below our premarket high or our premarket low.

[00:02:52]Now again, we are not entering yet. We do not want to trade breakouts. Why?

[00:02:56]Because breakouts do not work. So we want to see price break above the level and we want to see price push above that level. Step number three is we want to be patient for the pullback. And this is where most people fail. They chase instead of waiting. Again, if you trade breakouts, you are going to lose money over the long term. So wait for price to break and close above the key or below the key level. Wait for price to then pull back and retest the level. So that is step number four. We want to enter on the retest of that breakout, either premarket high or premarket low. So when price comes back, we want to see it hold that level and we want to see strength or weakness at that level. If we can get that, that is your entry. Step number five is we want to define our risk, so our stop goes right on the opposite side of either that premarket high or that premarket low, which always gives us the best possible risk to reward. Step number six is going to be targeting the next area of liquidity. So that could be, you know, previous high of day, previous day's highs, uh previous low of day or the previous day's low, a supply zone, a demand zone, whatever it may be, right? There's a lot of different ways that you can find liquidity, but that's going to be your next target. So that's where the move usually continues to. And that's it. You don't need indicators, you don't need to guess, you just need clean structure in the market and that's it. So now let's talk about why this works. When price breaks premarket highs, shorts are getting stopped out.

[00:04:30]So anybody who was shorting below that premarket high, they have a stop loss set right above that premarket high.

[00:04:35]Equally at the same time, you do have breakout traders who are going to try to buy above that premarket high. So overall momentum is going to kick in.

[00:04:43]Same thing for premarket low, you're going to have buyers who are getting stopped out below that premarket low or breakdown traders who are looking to short below that level. Overall, both ways, we are going to see momentum kick in. Then when price pulls back and hits the level, weak traders are getting shaken out. But strong buyers or sellers are going to step in at that retest. Now that retest confirms that the level has flipped from resistance to support, if we're talking about premarket highs, or if we're talking about premarket lows, it's going to turn from support to resistance. You're not guessing, all you're doing is simply reacting to confirmation. Now one more thing before we get into the examples, this is why I love this setup. Your risk is always very small, your entries are very clean and your reward is usually two to five times your original risk. You don't need to trade all day, all you need is one clean setup like this and that can make your entire session. All right, so now let's go ahead and let's look at some examples. This is a trade that I actually took today live in front of thousands of people. If you guys did not know, I live trade every single day here on YouTube, give my exact game plan for the day, call my exact trades from start to finish as well as answer any questions that you guys have throughout the session. But I was looking at Russell this morning. Somebody called it out, said it was very strong. So I zoomed out and I saw, "Hey, well we have this clear-cut pivot high right here, which is our premarket high." And then we got the break above the level with strength, which is exactly what we like to see. Again, break above it with strength. We do not buy the breakout. We want to see price hold above the level and then we want to see it come back and retest it as support. So we break above the level, we come back, we retest it right here. I start to notice that we hold strength above this previous premarket high. Sometimes I'll wait for a candle close, sometimes I won't. For this, I did not because my risk was only about like two points on this trade. And honestly, if the Russell was going to continue today, this was the only area that we could have been looking to go long. All right? So sometimes I'll wait for candle confirmation, sometimes I won't. It just depends one, how strong is the reaction and two, how tight is my risk. We got a really good reaction and we had a really tight stop loss. So I ended up going long only risking about two points on this trade. Again, all price had to do was break below the low of this candle and I was able to capture this move into a new high of day right here for about like a 3.5R trade. But again, this is a very straightforward trade, just a simple break, retest, confirmation to go long and I was done within 40 minutes of market open. Let's go ahead and find more examples. So here's another pretty good example, but on the Nasdaq futures. So we have our premarket high right here. As we see, price breaks above the level, pulls back, holds it as support here, here, here as well as here. To me, in my opinion, this candle right here was the best confirmation. Maybe on a smaller time frame like the one or two minute, you found another sniper entry somewhere in this area. But to me, this five minute candle right here was perfect for a long entry. So you would go long at the close of that five minute candle.

[00:07:48]Stop loss is going to be below that candle wick. So you're risking about like 30 points on this trade, but you can see from here that price ended up pushing about 50 points from your original entry. Maybe you were able to get a slightly better entry right at that premarket high, but either way, you could have captured about a 1.7R trade.

[00:08:05]Let's go ahead and find some more examples. And also real quick, if you guys are looking to get funded, Apex, Take Profit Trader, TradiFi, Lucid, make sure you guys use discount code Brandon in all caps. It'll always get you the best possible discount. Obviously, I have tons of free education here on this channel. I live trade every single day for completely free. The only thing that I ask from you guys is one, subscribe to the channel, two, interact with my content, but then three, if you ever need accounts, again, Take Profit Trader, Apex, TradiFi, Lucid, make sure you guys use discount code Brandon in all caps. The goal behind my content as well as the live streams is to help you guys pass your accounts, get you guys funded and also get you guys payouts. So again, one more time, Apex, Take Profit Trader, TradiFi and Lucid, make sure you guys use discount code Brandon in all caps. All right, so let's go ahead and look at one more example right here. So we have our premarket high. As we see, price ends up breaking above the area with strength, pulls back, retests it right here. Very long lower wick, nice bullish candle off of that premarket high. Therefore, this would be your confirmation to go long. So our stop loss on this trade would be if price shows weakness below this candlestick low. Again, I do not set hard stop losses. I always preach that, not only in my videos, but on my live streams as well. Because if you do hard stop losses and you set them too close, you can get stopped out a majority of the time just to see price do exactly what you wanted it to do. All right? So as we can see, we have this bullish candle off of this premarket high. This would be my confirmation to go long. Again, weakness below this candlestick low would cause me to stop out of the trade. Now we did go below it a couple points, but did we ever actually show weakness below it?

[00:09:51]No. Therefore, I would still be in the trade. Now I know there's going to be some people that say, "Oh, you would have stopped out. You would have stopped out." Guys, again, I literally appreciate all the time in my videos and my live streams that I don't do hard stop losses for this specific reason.

[00:10:04]Yes, we wicked below it by a few points, but we automatically came right back up and closed above this candlestick low.

[00:10:11]Therefore, there was no reason to get out of the trade. Only real weakness below this would you stop out. And again, as we can see from there, price then made a very strong and aggressive move up. So, on this trade, you would have risked, again, about like 30 points, but your potential reward was about 65.25 points. So, about a 2.2 R trade. Again, the strategy, it's very consistent in the market. You always have a very well-defined stop loss, and the setup, it's very accurate. Now, here's where the discipline comes in. I do not take this setup if the breakout is weak. We always need strength when we actually break above or below the pre-market high or pre-market low. I avoid the trade if there's no clean structure. Again, we always need very clean structure if we're going to take a trade, or if price is choppy or consolidating. If the market is choppy or consolidating, there's no clean setups. So, not every day is this setup tradeable. And that's what separates profitable traders from gamblers. You need to understand when you should be taking trades and when you should not be taking trades. Now, most traders lose not because their strategy is bad, but because they don't wait.

[00:11:18]They force trades, they chase moves, they ignore levels. But this strategy, what it does is it forces you to be patient. And patience is where we make money trading. Trust me, if 99% of traders fix these three things right here, we would have way more profitable traders out there. But the reason why 95 to 99% of traders are not profitable is simply because of these three things right here, as well as not using proper risk management. But that is going to wrap up this video. So, if you start focusing on this one setup every morning, I promise you your trading is going to change. Keep it simple, wait for your level, and execute with discipline. So, if you guys did find value, it would mean the absolute world to me if one, you hit that like button, but also make sure to hit that subscribe and that bell icon. I go live every single morning here on YouTube and live trade for you guys for completely free.

[00:12:10]So, again, make sure you guys tap into the live streams. And again, if you're ever looking to get funded, Apex, Take Profit Trader, Trade a Fiver, Lucid, make sure you guys use discount code Brandon in all caps. Other than that, everybody have an amazing rest of your day, and I'll see you guys in the next video.