🔥 Rejection Candle Strategy & Best Timeframes for Intraday

One of the most effective ways to catch intraday reversals is by mastering the Rejection Candle Strategy. In this guide, you'll learn how to spot rejection candles, where to trade them, and which timeframes work best for intraday success.

📌 What is a Rejection Candle?

A rejection candle is a candlestick with a long wick (shadow) and a small body, indicating price tried to break out in one direction but was quickly pushed back. This shows strong buying or selling pressure, making it a great reversal signal at key zones.

💡 A long upper wick at resistance = sellers rejected higher prices = potential short setup.

🔍 Rejection Candle Strategy Rules

🟩 Buy Setup (Support Rejection)

Price reaches a strong support zone.
A bullish rejection candle with a long lower wick forms.
Enter on the breakout of the candle high.
Stop Loss: Few points below the wick.
Target: 1.5x to 2x your risk or the next resistance zone.

🟥 Sell Setup (Resistance Rejection)

Price touches a well-defined resistance zone.
A bearish rejection candle with a long upper wick appears.
Enter short when the next candle breaks the low.
Stop Loss: Above the wick of the rejection candle.
Target: Next support or fixed reward ratio.

⏱️ Best Timeframes for Intraday Trading

⭐ Recommended Setup:
- Use 15-min or 1-hour charts to identify key support/resistance zones.
- Use the 5-minute chart to spot and enter trades with rejection candles.

🔹 1-Minute (1M)

High-frequency signals, but lots of noise.
Best for scalpers only.

🔹 5-Minute (5M) ✅ Best for Rejection Strategy

Perfect for spotting clean rejection setups intraday.
Balanced trade frequency and signal clarity.
Ideal for NIFTY, BANKNIFTY, and options traders.

🔹 15-Minute (15M)

More reliable patterns, less noise.
Great for confirming key zones and trends.

🔹 1-Hour (1H)

Used to identify strong structure and filter setups.
Lower frequency, higher confidence trades.

✅ Bonus Confirmation Filters

Volume Spike: Adds conviction to rejection.
ADX > 20: Confirms a trending environment.
RSI Divergence: Confirms potential reversal.
OI (Open Interest): Useful in options to confirm bias.

🚫 When to Avoid

During low volume or sideways markets.
Inside choppy zones without clear structure.
Near major news releases or events.

🎯 Final Thoughts

The Rejection Candle Strategy is simple yet powerful when used at key price zones on the right timeframe. Stick to the 5-minute chart for entries, confirm your levels on higher timeframes, and combine it with smart risk management for consistent results.

📘 Pro Tip: Always paper trade or backtest this strategy before going live!

📈 How to Draw Trendlines in Intraday Trading

Trendlines are one of the most powerful tools for intraday traders. Whether you're trading NIFTY, BANKNIFTY, or any stock, drawing accurate trendlines helps you identify entries, reversals, and breakouts.

🔹 What is a Trendline?

A trendline is a diagonal line that connects two or more price points (swing highs or lows) and extends into the future to act as a support or resistance.

Uptrend ➜ Draw line under swing lows (support).
Downtrend ➜ Draw line above swing highs (resistance).

🧭 Step-by-Step: Drawing Trendlines in Intraday

✅ Drawing an Uptrend Line (Support)

Open a 5-minute or 15-minute chart.
Identify at least two higher lows.
Use the Trendline tool to connect them.
Extend the line to the right to project support.

📌 Tip: Look for bullish candles or rejections at the trendline for long entries.

✅ Drawing a Downtrend Line (Resistance)

Open the intraday chart.
Find at least two lower highs.
Connect them using a downward diagonal line.
Extend it to anticipate future resistance.

📌 Tip: Bearish rejection candles at the trendline = potential short opportunity.

📊 Best Timeframes for Drawing Trendlines

1-Minute (1M): Too noisy. Not recommended unless scalping.
5-Minute (5M): ✅ Best for intraday entries and fine-tuned setups.
15-Minute (15M): ✅ Ideal for spotting key trendlines and structure.
1-Hour (1H): Useful for confirmation and higher-level zones.

🎯 How to Trade with Trendlines

Wait for price to touch or test the trendline.
Look for a rejection candle or volume spike.
Enter the trade in the trend direction.
Place stop-loss just beyond the trendline.
Target next swing high/low or use risk-reward ratio (1:2 or better).

📉 Example Scenario

Imagine BANKNIFTY is rising. On the 5-minute chart:

You connect 3 higher swing lows with a trendline.
Price returns and touches the trendline again.
It forms a bullish candle with volume.
Enter long. SL below trendline. Target = recent high.

🛑 Common Mistakes to Avoid

Forcing trendlines to fit your bias.
Using only one point (needs 2+ touches).
Ignoring price action confirmation.
Using trendlines in choppy or sideways markets.

✅ Bonus Tips

Combine trendlines with Rejection Candles, Volume Spikes, or ADX > 20.
Backtest your trendline trades before going live.
Use TradingView or Zerodha Kite's drawing tools for accuracy.