First few candles are very important after market open. Many a times they reflect the future course of action, atleast for the morning.
Imagine those retail traders who carried overnight shorts, saw in pre-market that market is opening higher so they start covering their their shorts leading to small rally (wick at the top of first 5min candle)
As soon as their short are covered, market changes direction and closes lower in the first 5min. Here the market is at the same level where retail traders took their overnight shorts and now they are regretting.
As soon as market breaks first 5min candle low they (along with many new participants) start shorting again in FOMO. Again market reverses direction and closes higher. After several attempts they were unable to push the market lower. It is confirmed by the wicks at the bottom of many candles that smart money is buying- same smart money who was selling at the open
Imagine those retail traders who carried overnight shorts, saw in pre-market that market is opening higher so they start covering their their shorts leading to small rally (wick at the top of first 5min candle)
As soon as their short are covered, market changes direction and closes lower in the first 5min. Here the market is at the same level where retail traders took their overnight shorts and now they are regretting.
As soon as market breaks first 5min candle low they (along with many new participants) start shorting again in FOMO. Again market reverses direction and closes higher. After several attempts they were unable to push the market lower. It is confirmed by the wicks at the bottom of many candles that smart money is buying- same smart money who was selling at the open
