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Using the midpoint of a big rejection candle on M5 as my entry

when a big M5 candle rejects a level, with a large wick or a big bearish body after a spike, I draw a line at the middle of that candle. Price often comes back to that midpoint before continuing, and it gives me a defined place to trade from. Say there's a big bearish candle after price hit a prior high. I wait for price to bounce back up into the middle of it. If I see a smaller candle rejecting at the midpoint, I take a short with the stop above the high of the big candle. That's a clear invalidation. Target is the low of the big candle, then the next level beneath.

The candle has to be large compared to the recent ones, otherwise the midpoint means nothing. I use about twice the average of the last ten candles as a guide. It also has to happen at a level, like a session high or a previous day high. A big candle in the middle of a range isn't a signal.

I skip it near news, since everything gets whipped around. And I don't take it if price spends a long time getting back to the midpoint. If it takes more than a few candles, the energy has gone.

The size filter is the key part for me too. A normal sized candle has a midpoint like any other price and price will cross it all day without meaning anything. When the candle is clearly bigger than its neighbours and comes right after a sweep of an obvious high, the midpoint becomes a place where late buyers and the sellers who pushed it down meet again. I also like it when the big candle closes near its low. If it closes back in the middle, the rejection is weaker and I usually pass.

Something worth adding is what to do when price blows straight through the midpoint without a reaction. If it closes above the middle on M5 and keeps going, I take that as a sign the rejection is being absorbed and the move up might resume. I do not try a second short higher up. The level was the whole reason for the trade, and once it fails, there is nothing left to lean on. The stop above the big candle high is there for the times it fails after I am already in.

On targets, I agree that the low of the big candle is the natural first one, but I usually take part off there and move the stop to just above the midpoint rather than all the way to entry. If price is going to continue down to the next level, it often pauses at the candle low first, and I do not want to get shaken out by that pause. If it bounces hard from the low and goes back above the midpoint, I am out with a small result and that is fine.