A red open tempts traders to catch the falling knife — buy calls into the decline, guessing at the low. That's prediction, and it's a losing game. The playbook instead waits for confirmation: the first green candle that reclaims a level tells you buyers have actually shown up, rather than that you hope they will.

The setup

Price opens red and sells off toward a level that matters — the opening-range low, the put wall, prior-day low, or VWAP. You're not looking to buy the drop; you're watching that level for a reaction.

Entry, target, stop

Entry: the first green candle that reclaims the level — closing back above a level it had lost, or holding and turning up off support. That reclaim is the confirmation the low may be in. Target: VWAP or the next level up. Stop: a new low below the reclaim candle — if price undercuts it, the turn failed.

Don't buy the drop — buy the reclaim. The first green candle at a level is confirmation; the low itself is a guess.

When to skip

Skip it in strong negative gamma, where “first green candles” are frequently bull traps in an amplifying downtrend — a reclaim is far less trustworthy when the regime is feeding the selloff. And skip it if there's no meaningful level under price for the candle to reclaim; a green candle in mid-air isn't a signal. Confirmation plus a level plus a supportive regime is the trade; a green candle alone is not. NoVo maps the levels so you know which reclaim actually matters.