A simple day trading strategy involves marking the high and low of the first 5-minute candle at market open (9:30 AM Eastern), then waiting for a breakout followed by a retest to enter trades with a 2R risk-to-reward ratio; this strategy can be executed with minimal capital ($50 risk) and scaled up as profits accumulate, using regulated instruments like stocks, futures, or options while maintaining strict risk management.
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I Tried Day Trading With Only $50Ajouté :
In this video, I will start with risking only $100 per trade and I will show you how I turned it into one week. This was all done using one simple strategy and executed the same repeatable way every single day. And the strategy doesn't require indicators, guessing, or any confusion. It simply takes advantage of the first 60 minutes of market open. And the best part is it doesn't require thousands of dollars to start. Instead, it only uses one candle.
And today, I'll show you the full journey on how I would start, trade, and scale my trading account with only $100 of risk. So, the goal of this video is to show how I would start day trading if I only had $50 of risk, and what is the exact strategy I would start trading with. Now, this is the same setup and system that has helped me achieve results in the market over the last couple of years. But by the end of this video, I will show you exactly how I take $50 of risk and trade it every day.
Now, before we get on the charts and I show you a week's worth of trading with only $50 of risk, what can we trade?
Well, there's a lot of different instruments that we can trade. We have stocks, futures, forex, crypto, and options. And there's a lot of different reasons they can be either good or bad.
In terms of stocks, they're liquid and stable, but they need more capital to start. In terms of futures, you can actually use leverage. They're open 24 hours in a day. However, you can't hold them long term. In terms of forex, this is the most liquid market, but it is not regulated. And this is why with forex you have to be very careful. There can be some scams out there. So you want to be careful with forex. Crypto has high potential, a lot of volatility. But the problem is as a new trader, crypto may be too volatile for you and it may not be the instrument you want to trade. And then of course with options, it's very low barrier to entry, meaning you don't need a lot of capital. It is also liquid and it uses a lot of leverage. However, the low barrier to entry is also something you want to watch out for.
Because you don't need that much capital. Traders often treat options like gambling and we don't want to do that. Rather we want a mechanical and defined system. For me personally, I choose to trade stocks, futures and options. I'll trade crypto when the market is hot as well. However, primarily I trade stocks, futures, and options as these are regulated assets and they are safe. Now, what is the strategy that I'm going to talk about in this video and it's the same strategy I'm going to trade every single day when we get into the charts? Well, this strategy helps me trade for the first 60 minutes. There's a couple rules that you need to understand. However, it is very simple to understand. For step one, all we're going to do is mark out the first 5m minute high and 5minute low of the opening of the day. This occurs from 9:30 a.m. Eastern to technically 9:34 a.m. Eastern. This would be the first 5-minute candle. And we're going to mark out the high of the first 5-minute candle and the low. The reason that is is because there is a lot of volatility on either side. Sellers stop the stock from coming up and buyers stop the stock from coming down. Therefore, we know if we get a breakout of either side, either buyers are going to be overpowering sellers if we get the breakout to the upside or sellers are going to be overpowering buyers if we get a breakout to the downside. In this example, for step two, we need to wait for a candle close above the range. This was right here on the breakout entry and then we're waiting for the retest. So, we buy the retest. As we can see, this is the retest entry. We want to buy this retest as this is the lowest risk but highest reward trade. Why is that? is because this is previously resistance which has now turned into support. As buyers know, they need to hold the stock above this area or the stock will simply fail.
Therefore, this is the highest probability entry with the lowest risk.
And of course, for our stop-loss and profit target, we're going to be targeting out a 2our multiple for our stop-loss, which can simply be a stop below the impulsive candle that broke out the stock. Now, if you're still a little bit confused, don't worry. When we get into the examples on the real charts, this will make much more sense.
However, with this strategy, if we were to take this trade with the 2R multiple, which instrument that I talked about previously, stocks, options, or futures would make the most money, but most importantly, how much capital would it take? So, if we would have taken that trade, how much was needed to take that trade? So, we can see this is both futures, stocks, and of course, options.
This was on ES. So, we can see one ES contract. If we were to risk $75, this would cost anywhere from $500 to $1.5,000. we would make about $150. This would take 500 spy shares with the same $75 of risk to make $150. This would require $300,000 of size or an account size. And for options, it would be 10 ATM calls. This means at the money calls. Our estimated risk would be about $75 and we would make $300 of profit. This would require about $3,000 of capital to actually take these calls. With that being said, now you have a better understanding of how much capital is needed to trade different instruments here as well.
Primarily, like I said, I can trade options and futures. I trade stocks more for long-term trades. But now that you understand the risk, the capital needed, and the potential gains of all these different instruments, let's go over to the real charts, and let me show you what would happen if we're risking $50 every single day over a full week trading this one simple strategy. All right, here we are on the first trade.
And this is on SPY or SPY. All we have to do is first wait for the first five minutes of the day to open and then we'll look to trade. As we can see here, this is the first fiveminute candle. If we go over to the five-minut time frame, you can see this is the first 5minute candle. Of course, we're on the 1 minute time frame. And all we have to do is mark out the high of the first 5minut candle and the low of the first 5minute candle. So once again, I'm executing this on the 1 minute time frame. We have the 5minute high and the 5minute low.
All we're looking for is a break above, a retest, and continuation to either side. Remember, I'm only risking $50 for this first trade. So, let's see if we can actually get an entry. Once again, we need a strong break above and a retest. So far, we got this break, but no retest. Once again, another break. No retest. No real buyers have stepped in yet. We need to confirm buyers are stepping in, and then we get a retest.
As we can see here, if we took these first two examples with just a breakout, we would have lost. That's why the retest opportunity with strong price action is key. And I have a full in-depth video on exactly how to read price action and candlesticks in the playlist in the description for absolutely free that you can watch after this video. With this being said, our risk for this trade is going to be a break back below that 5minute high and we'll target out the 730 whole psychological number. This means we have a 2.57 risk-to-reward trade. But what does this actually mean when we're looking to take the trade? Well, if we want to risk $52 on this trade, this means we would make $114 for the first trade. So, let's confirm.
This is our first trade that we're risking $50 to make $114.
Let's see what happens. And as we can see here, for that first trade, we started off risking only $50 and we made $114 and we were done the day at 10:00.
This means this was a 30inut trading day using the simple strategy with only $50 of risk to make $114.
So this was the first day and by the end of this video, not only will you learn how I use this simple strategy, but you will also see exactly the growth plan I would use for this $50 of risk and exactly how I would compound it trade per trade. All right, here we are on the second day. And remember, I'm doing this day by day. So I'm not skipping any days. I'm showing you exactly what would happen if you traded the strategy with only $50 of risk. But let's play out the first 5 minutes of the day and we will mark out the 5minute low and the 5minute high. And remember, by the end of this video, you will also see exactly how I would use my growth strategy using the system with the $50 of risk. Now, as we can see here, we actually got a break below this level. We came back for the retest. No sellers stepped in. But here we can see sellers are stepping in. So, we can enter into a short position here.
Our stop loss is going to be a break back above that 5minute low and we will be targeting out at least a 2-hour multiple again in this example. So here once again we're risking about $54 to make about $14 of potential profit.
Let's play out the trade and see exactly what happens. And just like that we would have been done the day. This was at 947. This was about a 17-minute trading day by understanding the strategy. But these are two days with $50 of risk. What is the actual growth strategy to grow my account using this risk multiple and risk-to-reward? Well, let's go over to the next example so I can show you. All right, here we are on the next day. Let's play out the first 5 minutes of the day and we're simply going to mark out the high of the first 5 minutes and we will mark out the low.
Now, what is the growth strategy? So, right now, we need to understand over the last 2 days, we're up a total of $218 of profit. Now, this was only done using $50 of risk. So, this is good so far because of course we're only risking $50. We're up $218. But the only way to grow an account is to actually put on more risk. But we don't want to risk capital that we want to start with. And that's exactly why we built up this buffer. We have now built up a buffer using the trades that we've actually taken. And now we can start adding more risk per trade. And this will only help compound the account if we follow the same simple strategy over a long period of time. for me now going forward because I've already had $218 of potential profit, I will risk $100 per trade. This means I am doubling my risk.
However, this also means because I have $218 of profit, if I lose, I'm using house money. And this is very similar to the thought process on how a casino works as well because as a trader, our business model is similar to a casino.
We're not the person coming in looking to gamble. Instead, we're the casino that knows over a long period of time because we have an edge in the markets, we will see consistent results as long as we can stay in the markets long term.
So, with our growth strategy now, I will be risking $100 per trade instead of 50 to see how we can grow this account.
With this being said, let's play out this day and see if we can get a break and retest. So far, we are coming right back down. Here's the breakout.
And unfortunately on this day, because I only trade till 11:00 a.m. Eastern, we can see there was actually no retest that happened. There are going to be days, and this is why I'm doing this over a oneweek period to show you the good results and bad results. There are going to be days where we don't get a trade in this specific day, we just didn't get a trade because there was no retest. So, I'm not going to force an entry. I'm not going to FOMO buy in just because the stock is going up. Instead, I'm going to wait for the next day and follow the one simple system that I have. So, this was a day where we got no entry. Let's go over to the next day.
All right, here we are on the next day.
Let's play out this day and see exactly what happens. So far, we can see buyers actually stepped in very aggressively.
We can mark out our 5minute low down here. And we can mark out our 5minute high up here. What we're looking for once again is a break and retest to either side, whether it be to the upside or to the downside. The beauty of the strategy is it's very simple. Therefore, we don't need a bias coming into the day or need any sort of confusion. we can simply trade the price action that is presented in front of us. All right, and right here we finally got the retest.
So, this one actually did come back all the way to the upside. However, we are still getting that retest. It's before 11:00 a.m. Eastern. So, we can look to enter into this trade. We can see buyers are stepping in right off that 5minute high retest. This is where I would look to enter with the stop loss right below the break of the candle that we're entering in on. And we need our profit target to at least high of day. Now, this is a 2.92 risk-to-reward trade. And since we're increasing our risk, I'm going to be risking $120 to make $380 of potential profit. So, let's play out this day and see exactly what would happen. And as we can see here, this trade worked out very nicely for a move back to the upside. And even with that increased amount of risk, we were still able to profit from this trade. So, this was the first day that we sized up.
Let's go over to the next day. All right, here we are on the next day.
Let's play out the first 5 minutes and of course we will mark out the first 5minute high and low. Then we are simply looking for the break and retest of this area. So far you can see we broke back above. There was no retest of the area.
All right. So for the first time you can see here we came back for the retest but no sellers stepped in. However, the second time we came back for the retest buyers stepped in but sellers are stepping in on this very next candle and still holding it back below the 5minute low. So this would be the break and retest. We can enter into the stock here with our risk a little bit above the candle we're entering in on. And of course, we need at least a 2our multiple. At this point of the video, we're up about $598. For this specific trade, I'm going to be risking $300 as that's still coming from our profit.
However, we're still growing our account. So, we're risking about $276 for about $552 of potential gain. Let's see exactly what happens when we enter this trade.
And we can see this was a pretty short trade, above 4 minutes. But now, because we're starting to size up, these results are getting a little bit bigger.
However, we're still using smart risk management. With that being said, let's go over to the next trade. All right, here's the last trade that we will be looking for in this video. Same strategy, same system every day. It's repeatable. It's a little boring, but that's just what works. We're going to mark out the 5-minute low and we're going to mark out the 5-minute high. We will then wait for a break and retest to either side. In this example, we can see we're getting a break to the downside.
So, we're waiting for the retest back into this area. And we can see we're getting weak price action right off of this 5minute low. Now, at this point of the video, we're up $1,150 with only an original risk of $50. As we can see, the risk about $455 for a profit target about $1,482 on this specific trade. Let's play out this day and see exactly what happens.
And you can see this trade worked out very nicely right into our profit target using the first candle strategy. Now remember, trading is not a get-richquick business. There is losses within trading. However, the purpose of this video was to show you you don't need big capital to start learning how to trade.
You can learn with small capital and slowly size up as you learn the skill of trading. And if you want to learn more about this strategy or how to start trading from an absolute beginner, make sure to click the playlist on screen now. It's 10 hours of free content I wish I had 7 years ago. If this video helped you, 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.
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