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Opening drive playbook · 2-minute chart · first 25 minutes

PMH Break

There is one trade here, and it is the break of the premarket high. Not the gap. Not the news. Not the first green candle. Everything else on this page exists to keep you out of the bad versions and get you paid on the good ones.

1trigger
4filters
3sto run the gate

6 / 6

Watch one morning, start to finish

1

Before the bell

  • Market daily above its 10 and 20 SMA, ideally trending up. The market's chart, not the stock's.
  • Sector moving at least as hard as the market, preferably harder.
  • A real catalyst: news out premarket or after yesterday's close, with heavy premarket volume. Or a price catalyst, where the location is the story — an all-time high, the top of a long base.
  • Room overhead: no obvious resistance for 3–5%.
  • Write down four numbers: prior close, yesterday's high, premarket high, and the opening print when it comes.

On a trade that lives and dies inside ten minutes, you want the tape helping you. If SPY is red, you are paying to fight it.

2

The gate at 9:30

  • The opening print must be above yesterday's high and above the prior close. Both, not one.
  • If it opens below yesterday's high, there is no opening drive trade here. However good the news is.

Open above yesterday's high and everyone who bought yesterday is green — nobody is sitting there waiting to get out at breakeven. Open below it and you are buying into a crowd that wants its money back, and that crowd is exactly who sells into your breakout.

3

The trigger

  • A 2-minute candle closes above the premarket high, on volume.
  • Closed means closed. Not touched, not wicked through, not "it's above right now."
  • Relative volume above 3 — roughly three standard deviations above what is normal for that minute of the day over the last five sessions.

The premarket high is the most anyone would pay all morning, with hours to study the chart and the catalyst. When it goes on volume, that argument is settled. Until then you are guessing inside the range.

4

Check the candle

  • Real green body. Upper wick no bigger than half the body.
  • Closes red → skip. Never closed above the level → it was a false breakout.

A long upper wick means somebody sold into the breakout hard enough to shove price back down before the candle finished. That is not strength; that is someone unloading into your enthusiasm.

5

Entry and stop

  • Entry is the close of the breakout candle. Not the level.
  • Stop goes under the low of that same candle.
  • Size from the stop distance, never from the level.

A premarket high sitting right on top of the open tells you the trigger will come fast. It does not tell you the stop will be tight. On real examples the risk runs 2.5–5% per share.

6

Manage it

  • Trim into strength at whole numbers, prior resistance, or roughly 1 ATR from the open.
  • Trail the runner out on the first 2-minute close under the 9 EMA.
  • Early exit: a 2-minute close back below the premarket high after you are in. Do not wait for the stop.

It is a momentum trade. You are not predicting the high of the day, you are paying yourself as it moves.

The whole trade on one chart

Gate levels, the stuff that traps you, the candle that pays you, and where you get out.

premarket 102.00 103.00 104.00 105.00 106.00 107.00 108.00 109.00 Premarket high 104.00 Yesterday's high 102.40 Prior close 101.80 9:20 9:24 9:28 9:32 9:36 9:40 9:44 9:48 9:52 9 EMA 3× relative volume Volume 9:30 print 102.95 clears both gate levels. The trade is live. Poked above, closed back under. Big upper wick, red body — a stuff, not a break. Skip it. The one trigger: a 2-min candle closes at 105.05, above 104.00, on a real volume expansion. Trim into strength: whole numbers, 1 ATR, prior resistance. 1R Runner comes off on the first 2-min close back under the 9 EMA. Fill is the close, 105.05 — a dollar above the level. Stop 103.10, under that candle's low. Risk $1.95, 1.9%. Price is the claim. Volume is the evidence.

The close is the confirmation

In the middle of a forming candle, a real break and a stuff look identical. That is the whole problem. Stop trying to tell them apart live — wait for the close and look.

premarket high Take it Closes clearly above the level. Full green body, wicks small. premarket high Skip Closed above, but the upper wick dwarfs the body. Someone sold it. premarket high Skip Above the level, but the body is red. Sellers won the candle. premarket high Skip Never closed above the level. That is a poke, not a break.

The trigger does not run on a clock

These feel like three different trades. They are one trade, and the trigger never changed.

Straight through

The first candle takes the level and you are in at 9:32. Of the setups studied, this is the strongest version.

Sideways first

It grinds inside the range for a few minutes, then goes. Same trigger, later.

Flush, then go

It sells off hard off the open, flushes everyone out, snaps back and takes the level. Same trigger.

The four filters

These do not find the trade — the trigger does that. They exist to kill the bad versions before you are in one.

1  The wick

Price touches the level, pushes through, you buy, you are green for six seconds, then it stuffs and closes back underneath.

Kills: buying inside a forming candle.

2  The catalyst

Fresh news in the premarket or after the close, with heavy premarket volume behind it — or a location significant enough to be its own catalyst.

Kills: breakouts nobody is watching.

3  Room overhead

No obvious resistance within 3–5% of entry. If there is a wall just above you, you are buying somebody else's exit.

Kills: 20-cent winners.

4  Market and sector

Strong market daily, strong group on the day. The tape decides whether momentum gets rewarded this morning or sold into.

Kills: good setups on bad days.

Size off the stop, never off the level

Rocket Lab's premarket high sat 27 cents above the open. The candle that broke it closed two dollars higher. Your fill is the close, so your risk is measured from there — and it will often feel like a chase.

Risk budget for the trade$500.00
Entry — close of breakout candle105.05
Stop — low of that candle103.10
Risk per share$1.95
Position size256 shares

The mistake this prevents

Size off the level instead and you measure risk as 105.05 − 104.00 = $1.05, which says buy 476 shares.

476 × $1.95 = $928 at your actual stop.

Nearly double the risk you budgeted, taken before the trade even had a chance to work.

Three mornings, three stories, one trade

An earnings gap, an all-time high with no news at all, and a sector headline. Same gate, same trigger, same stop, same exits.

  RKLBMay 8 · earnings ARMMay 21 · all-time high RGTIMay 22 · sector news
Catalyst Earnings, heavy premarket volume No news. The location is the catalyst — nobody in the stock's history has paid more, so nothing overhead Report of $2bn to nine quantum companies through the CHIPS act; lit up the whole group
Prior close78.58256.7322.04
Yesterday's high84.79259.4422.10
Open86.04 ✓266.90 ✓22.96 ✓
Premarket high86.31268.4923.57
Break candle86.04 / 85.87 / 88.18266.90 / 266.00 / 272.5522.96 / 22.66 / 23.80
Entry88.18272.5523.80
Stop85.87266.0022.66
Risk per share$2.31 · 2.6%$6.55 · 2.4%$1.14 · 4.8%
Notes Trimmed into strength, out near 98–99 by 10:00 — about 4.5R. It ran on to 105. Not this trade's money. Trimmed into strength, roughly 6% extension at the exit. Closed the day at 298. Widest stop of the three, so the smallest size. Around 4× relative volume, the heaviest of the group.

Example: one morning, 2-minute bars with pre-market

An example session run through the indicator's own rules: a gap up that opens at 102.95, above yesterday's high of 102.40 and close of 101.80, under a pre-market high of 104.00. The 9:32 candle pokes above 104.00 and closes back under it, so nothing fires. The 9:36 candle closes at 105.05 on more than 4× normal volume for that time of day, glows yellow and gets the LONG marker. The stop goes under its low at 103.10. Price never comes back to the pre-market high and tops out just over 109 by 10:40. The bars are made up to show the setup clearly. They aren't a real ticker.

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2-minute

Watch the video

The opening drive through the premarket high, with the three worked examples.

Open on YouTube ›

Indicator for this setup

Add this to a TradingView chart (with extended hours on) to mark the levels this page describes. It draws and alerts on the setup — it does not place trades.

The trade is the premarket high break. Everything else is filters and management.

The story changes every single morning. The trade does not. That is the entire reason to run it mechanically — it removes the guesswork from the fastest part of the day.

  • Trading the gap instead of the break is not a setup, it is a feeling. No level, no trigger, no idea where you are wrong.
  • Opening drives move fast. Paper trade it first, or size it small enough that being wrong feels boring.
  • If it closes back under the premarket high after you are in, that was the whole thesis. Leave.

Model taught as "the opening drive." Chart above is an illustration of the mechanics, not a real ticker — the three worked examples are the real ones. Watch the reference video →