Trade Setup
WHAT is a trade setup?
Combination
WHAT do YOU want to combine with your indicators as filters to develop a setup
and determine when you may trade it?
Base Trade Setups
- initial
- continuation
- re-entry
- addon
-
- setup - trigger
- best price - best timing
- lower high into a sell - higher low into a buy
consider: the best timing is a trade entry with
momentum in the direction of the trade that 'showed' that direction on a retrace
during the setup - this is best seen by mex flow and/or a ttmf hook
this chart has your 2 most frequent trade setup occurrences
on it: (1) the setup like the buy that sets up and triggers quickly with
'few' bars to the setup. (2) the setup like the sell that setups up more
slowly - often after a continuation swing loses momentum with a PMD.
consider the buy: for the trader who is looking for an
initial that then ticks back through the trigger price allowing for the trade to
be entered as a breakpoint or possibly with a ttmf hook - this doesn't happen
for this buy which has 2 partial profits before there is a hook. on the
one hand this is a problem IF this is a 'needed' component for your setup - on
the other hand a move that breaks cleanly with enough momentum that it reaches 2
partials without a hook is also a good thing.
HOW do you then get long? when we have discussed a
trader not taking an initial trigger AND this may be because of a counter
reverse or because wanting to see more price movement or it may also be because
the trade missed filling - we have talked about continuation type setups which
the breakpoint/ttmf hook is the most 'desirable'. we have also discussed a
break and hold AND we have discussed a pause - which is the 2nd buy available on
this trade. the break and hold especially with a ttmf hook is far easier
to see and react to - like the blue line drawing/purple dot but. the
purple dot buy on the actual chart is the pause - in this case a break and 4
small bars creating a stall ledge. times this is most prevalent is when
the 'reverse' is counter and especially when the break is with a ticki high.
also when you have a test of a prior resistance point/you can see the channel at
the left of the chart - this pause is a test of this price area which breaks the
ledge and the prior channel and then accelerates into a continuation swing which
would be tough to enter without simply buying any 'next' pause and break.
consider the sell: i 'love' this setup - it is clear
visually and it gives me 'plenty' of time to see develop and enter along with a
clear lower high into the trade which shows me the area to hold the trade to if
there is no continuation with the break. traders have heard me discuss a
horizontal 123 for a long time [see the 3 dk blue dots under the blue line] -
this is it. HOWEVER i also see this as one of those trades that can be
entered to soon and be exited when the blue line holds with a scratch/small loss
AND then never re-entered AND what could be one of your primary base setups
doesn't 'work' - this would be the blue dot sell entry.
the actual trigger - the one that we can see after the 'full'
setup/previous swing failure that is an important consideration based on the
size of that swing which is 2 partials and a trailing contract which is more
profitable than p2 at the swing high - has numerous combination components.
i think that the more that is combined into the setup/trigger - the clearer the
trade AND the more confidence the trader can have taking the trade. this
goes to why i mention so often - when you are confused with the setup/price
movement involved you shouldn't trade BUT you have to answer the question - WHAT
am i looking for before i will trade again - AND that question is answered by
the combinations you can include into the setup to replace the confusion.
WHAT combines into this setup trigger: (1) PMD/mex
cross shows us momentum failure in the swing - find price support which is done
at the blue line. (2) considering the continuation of the previous swing AND for
additional market information this is also occurring with the bigger direction
being up - i don't want to take the blue dot sell because i don't see swing
failure yet. (3) retrace from support occurs with momentum remaining red
and mex continuing to flow down AND in this case the retrace also is at the same
price as the prior break that took us to the swing high AND it occurs with a
ticki high/lower high which is a key russell trading tool. (4)
failure-price-pattern-indicator-ticki combination AND it triggers with a ttmf
hook. i don't care whether this trade was profitable or not - i would have
a problem finding a 'better' setup to trade AND similar setups to this repeat
and are available often enough to be one of your key plan setups.
Congestion Setups
consider: WHAT is a setup 'across the
chart'?
consider: WHAT is a 'primary'
setup combination to trade during a 'congestion' period?
when i think of 'across' the chart' i am
thinking of a 'bigger' move-pattern-structure that is in place regardless
that 'fast' chart indicators or even setups may have triggered - this
consideration is most prevalent during a 'congestion' period/ a 'problem'
period. you have heard me say before that regardless of what you may
have done - that this is a trade you 'had to take'. OR you have heard
me ask the question - IF you are going to 'stop' trading WHAT has to happen
for you to trade again? AND to both of these i am referring to this
setup 'across the chart'.
WHEN will you start trading again
across the chart
'pivot' shift-ttmf hook
range break setup
double top/bottom 'pivot' trade
triangle break
this chart starts with something that should make all traders
wary and 'slow' to trade - price straddling the floor pivot. right now i
want you to think of every trade you have done at the floor pivot an initial
indicator trigger AND remember how many times did you get a profit on one try
without wasting trades by possibly trying to reverse back the other way - going
flat with a small loss OR what's the 'worst' is exiting with that small loss and
never re-entering what becomes a winning trade. IF you have identified a
trading situation that you can't make profitable - is the answer to keep trying
to trade it OR learning to be patient until you can add combination to the
trade?
consider: (1) blue dot1 is no trade as an initial at
the floor pivot (2) blue dot2 can combine a higher low double bottom into the
setup/momentum resumption AND IF the bigger direction is up this trade can be
attempted but its still aggressive basis the area (3) purple dot1 can further
combine a breakpoint/2nd time through entry - with a floor pivot shift/reject as
support - with a ttmf hook || this is a very good way to trade out of
'congestion' and in particular when the 'congestion' is around the floor pivot
[any floor number can have similar problem resolving BUT we also have more
market information basis its location at r1 r2/s1 se]. again - compare
your typical trading and results WITH the number of times it breaks cleanly that
you 'miss' a profitable trade WITH the number of times you don't get the
opportunity to enter the trade with a combination that gives similar timing to a
break like the purple dot.
one thing want to be sure that all traders have on their
chart and watch going to the right on a breakpoint buy like this is the blue
line AND watch it as a potential shift line - after you get a move to the area
of p1/get p1 you have had enough movement where you can watch this line to
become support AND watch to see how this line may be related to a 'next' trade.
remember you are looking at this chart in hindsight - you 'know' this line
before the swing high.
swing high - retest of the blue line/dk blue dot1 - bounce to
highs and double top AND mex cross/PMD - back to the blue line/dk blue dot2 -
lower highs mex continuing to flow down - purple dot2 sell into the floor pivot
which will need to break to partial. is this the chart1 setup - very
similar but more compressed in the amount of time it sets up over BUT as a base
combination setup this would be grouped as the same type - the thing to be most
cognizant of is the proximity of the floor pivot. IF this is a setup where
price is coming down from an area above the double top and/or the 'bigger' move
is down i want to take this trade AND especially if one of those lower highs at
the dk blue line was also a ticki high.
IF you want to avoid a trade until you see price action at
the floor pivot which especially would be a consideration if the 'bigger' move
is up - you want a setup like purple dot3 which is a hit of the floor pivot -
retrace back to the blue line which shifts/rejects as resistance - sell the
spike low or break of the floor pivot. you should also see that there were
2 hits of that line prior to this which turns this into a triple break setup.
there is no ttmf hook with this setup AND it should not keep you from taking the
trade - YOUR setup in terms of wanting to trade a failure setup of the floor
pivot instead of into the floor pivot.
blue circle/ttmf hook purple dot4 sell - this is not a
failure setup through the floor pivot BUT a shift/reject of the floor pivot -
actually an addon setup especially to the purple dot2 sell - i do not want this
to be the base entry setup to this swing because of a ttmf hook requirement.
green dot1 was my initial trade as a buy into the channel
after the floor pivot reject and you can see green bar 1/2 is a retrace with mex
flowing up into the trade [it doesn't show on this chart but actually as a
reverse of an opening sell].
problem1: after seeing the blue line break and flat the
trader chases this trade and enters on a ticki high which quickly rejects on the
trader goes flat with a loss and never goes long again.
base setup1: the green circle after the blue line shift
to support with the ttmf hook - very important because a continuation trade
allows the trader to 'miss' and initial entry without 'missing' a profitable
swing AND having this setup you further reduce chasing.
does the sell setup look familiar - is this the chart1 base
setup? yes-but - the but being the trigger AND additional information when
direction is considered along with where the res:sup line is located: (1)
no PMD high (2) the swing is to the high of the day (3) the blue line/blue
circle red pb proximity to support seen at the previous high - the res:sup line.
base setup2: this IS that base setup - the trigger is
adjusted to the blue dot basis additional information/combination to the setup.
note: red dot entry instead of blue dot entry is a function of a news
release - typically i would be short at the blue dot.
problem2: selling the blue circle because of the red pb
and with no other consideration and going flat without re-entering. IF you
have entered at this time you have accepted the channel as initial risk OR a
reverse back into buy - neither of these have occurred so basis this the trade
would be held - additional combination filtering would allow this trade to be
entered without taking this 'heat'.
