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How many SetUps do we use?
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How many SetUps do we use?

  #11 (permalink)
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Thank you so much for your suggestion

I found the problem, too many indicators on my chart, now I only keep MA and price action swing on my chart and trade Price Action only.

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  #12 (permalink)
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Big Mike View Post

I would define mine as follows:

Breakout/Breakdown
Fade Breakout/Breakdown
Trend Continuation

I have to agree with mike... I am doing 1 & 2, and working on building confidence to jump on #3... if I miss the start, I doubt myself without having a good reference point and never know when to jump in on a pull back... it is rather a psychological thing than a technical thing..

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Big Mike View Post
I would define mine as follows:

Breakout/Breakdown
Fade Breakout/Breakdown
Trend Continuation

When trending I'll trade style 1 & 3, when range bound I either don't trade at all or trade style 2. I prefer to trade with trend and trend continuations, and not counter trend or reversals. Everyone has their own style and what feels right and comfortable to them.

Best thing is to just keep track of your setups in an Excel spreadsheet and track each setup independently so you can know the performance of each method so you can ultimately improve or refine your overall strategy. I encourage you to keep it to no more than four setups.

Mike

Are these three what you would define as actual "setups"? I've been trying to objectively define how I enter, and I'm having a hard time because it depends on context--one for example is a triangle breakout-pullback, and a breakout-reversal. That to me would be a "setup" ... do you get more specific in your "plan" with your setups?

I'm working on writing out a plan with certain details, but gosh I'm just having a difficult time. I know so many people talk about a written plan, but not everyone works the same way. I'm not lazy, I just don't quite know what to write as a "setup" -- and even if I did write it down, would it really help me identify it in real time?

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  #14 (permalink)
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josh View Post
Are these three what you would define as actual "setups"? I've been trying to objectively define how I enter, and I'm having a hard time because it depends on context--one for example is a triangle breakout-pullback, and a breakout-reversal. That to me would be a "setup" ... do you get more specific in your "plan" with your setups?

I'm working on writing out a plan with certain details, but gosh I'm just having a difficult time. I know so many people talk about a written plan, but not everyone works the same way. I'm not lazy, I just don't quite know what to write as a "setup" -- and even if I did write it down, would it really help me identify it in real time?

I know exactly how you feel. I use to ask the same questions when I first started trading. Now, I don't use a trading plan anymore, because my trading is very automated, not fully automated, I guess I could call it auto-assisted, using indicators and strategies, I still have to pull the trigger, so basically my trading plan has been programmed.

When I traded pure price action, I used a trading plan. I am including a screenshot of one of the setups that I used taken directly from a page that trading plan. I don't know if that is the way others do their trading plans, but maybe it might give you some ideas what to include in yours. Notice, I even had a picture of what the pattern should look like, because I am very visual person. My plan also included such categories as Objectives, Trading Approach, Setups, Money Management, Pre-Market Checks, List of instruments, etc.

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  #15 (permalink)
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josh View Post
Are these three what you would define as actual "setups"? I've been trying to objectively define how I enter, and I'm having a hard time because it depends on context--one for example is a triangle breakout-pullback, and a breakout-reversal. That to me would be a "setup" ... do you get more specific in your "plan" with your setups?

I'm working on writing out a plan with certain details, but gosh I'm just having a difficult time. I know so many people talk about a written plan, but not everyone works the same way. I'm not lazy, I just don't quite know what to write as a "setup" -- and even if I did write it down, would it really help me identify it in real time?


I'm not sure it will help, and it's only in rough rough draft, but in my journal thread I've started here on futures.io (formerly BMT), I've included a link to my actual excel journal, trading plan, and some other odds and ends I am personally working on (current link is in Post#10 of my journal thread, but this will change Mon.).. Again, I've just started this less than a month ago and have a ton of work yet to do. But it is an example and might spark some ideas of your own.


At the very very bottom of the Trading Plan, I've borrowed some excerpts from Rockwell’s setups. Although, after seeing monpere's detailed setup, I'm questioning whether those examples are detailed enough, but in any case, I would like to have mine published to a minimum of that standard. Take it for whatever its worth, as I was kind of hoping to get some constructive criticism myself in areas needing improvement. Good Luck!


Edge

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  #16 (permalink)
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monpere View Post
I am including a screenshot of one of the setups that I used taken directly from a page that trading plan. I don't know if that is the way others do their trading plans, but maybe it might give you some ideas what to include in yours. Notice, I even had a picture of what the pattern should look like, because I am very visual person. My plan also included such categories as Objectives, Trading Approach, Setups, Money Management, Pre-Market Checks, List of instruments, etc.


Thank You Very Much for sharing! I'm going to borrow your example (the detailed part, not strat) and tweak it into my own.


Edge

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  #17 (permalink)
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monpere View Post
I know exactly how you feel. I use to ask the same questions when I first started trading. Now, I don't use a trading plan anymore, because my trading is very automated, not fully automated, I guess I could call it auto-assisted, using indicators and strategies, I still have to pull the trigger, so basically my trading plan has been programmed.

When I traded pure price action, I used a trading plan. I am including a screenshot of one of the setups that I used taken directly from a page that trading plan. I don't know if that is the way others do their trading plans, but maybe it might give you some ideas what to include in yours. Notice, I even had a picture of what the pattern should look like, because I am very visual person. My plan also included such categories as Objectives, Trading Approach, Setups, Money Management, Pre-Market Checks, List of instruments, etc.

Thanks so much for posting this monpere.

Now here is my question: for purposes of practice, maybe in the simulator or whatever, isn't the point of having the setups written just to internalize them? I mean, long-time successful traders don't look at a piece of paper before placing a trade, do they?

So, if my setup is a pullback in a trend, do I really need that in writing? I'm really not trying to be rebellious, I promise! I am simply trying to do what works best for me, and having a "manual" in front of me may be more of a distraction than simply watching price and acting on what I see in real-time. In the daily review where I analyze my performance, I can note cases where the setup didn't fit my plan. Does it make sense? I know many will disagree, but I'd like to know why it's absolutely necessary to have the setups in writing, if anyone feels that way.

Thanks again and I appreciate the help!!

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  #18 (permalink)
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josh View Post
Thanks so much for posting this monpere.

Now here is my question: for purposes of practice, maybe in the simulator or whatever, isn't the point of having the setups written just to internalize them? I mean, long-time successful traders don't look at a piece of paper before placing a trade, do they?

So, if my setup is a pullback in a trend, do I really need that in writing? I'm really not trying to be rebellious, I promise! I am simply trying to do what works best for me, and having a "manual" in front of me may be more of a distraction than simply watching price and acting on what I see in real-time. In the daily review where I analyze my performance, I can note cases where the setup didn't fit my plan. Does it make sense? I know many will disagree, but I'd like to know why it's absolutely necessary to have the setups in writing, if anyone feels that way.

Thanks again and I appreciate the help!!

I think you are quite right. If you need the plan in front of you to trade, you are not ready to trade it yet, because if you have to read 3 paragraphs in order to identify a setup, they will all pass you by, by the time you finish your verification. To me a trading plan is about defining what you do, so that you can keep on track. Now, when I look at a chart I can recognize a setups in 3 seconds flat, better yet I can recognize my setups while they are forming and before they actually trigger.

I will generally know in advance that I am probably gonna get a trade within the next 2 bars, or I will not be getting any trade setups a least within the next few bars. For instance, if I am trading the setup pictured in my post, if 3 up bars just printed, then 2 down bars, then I know, there's potential for a trade within the next 1 to 3 bars. But, if I just got 3 up bars on the chart, I know I will not be getting a signal within at least the next 3 bars. If I'm trading a 5 minute chart, I don't even need to look at the market for the next 15 minutes, time to go get a sandwich.

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  #19 (permalink)
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Thanks monpere. I think sometime's it just easier to look at something and identify it, rather than trying to describe it in words. For example, take these two charts.

I took these trades this slow sunday evening. I can describe why I took it, but the conditions required to write this out would be cumbersome and only good, IMO, for a mechanical system. Why mechanize it so much if I'm trading it in a discretionary way? If I wanted a mechanical system I'd do it that way.

I took #1 because of the volume spike a few bars before, and I placed a buy limit at .49, with a 5 tick stop. Tiny risk, target of 25 ticks. 5:1 ratio, and it worked. Maybe it didn't, but even so it looked like a good buy based on what little CL action I've seen.

I took #2 because the risk was so darn low. 4 ticks of risk, and took profit at the 00 level, for a 9:1 R:R.

Those are my "rules," but they were determined based on the context, on the fly, based on the level of activity I saw in the market (even though I won't count these towards my journaling because it's more for experimentation and not my regular trading hours). Discretion was used and in this case was profitable. In many other cases it likely would not be, but because of the low risk I was willing to place a trade that otherwise I wouldn't.

How would I label these setups on paper? The first is pretty easy I guess, a "breakout pullback." The second one? Hmm, maybe the "roulette wheel"? Or "reversal sort of"? Or "triple bottom in a pullback"? It's just hard for me to see value in placing so many names when the context can be so different each time.

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  #20 (permalink)
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josh View Post
Thanks monpere. I think sometime's it just easier to look at something and identify it, rather than trying to describe it in words. For example, take these two charts.

I took these trades this slow sunday evening. I can describe why I took it, but the conditions required to write this out would be cumbersome and only good, IMO, for a mechanical system. Why mechanize it so much if I'm trading it in a discretionary way? If I wanted a mechanical system I'd do it that way.

I took #1 because of the volume spike a few bars before, and I placed a buy limit at .49, with a 5 tick stop. Tiny risk, target of 25 ticks. 5:1 ratio, and it worked. Maybe it didn't, but even so it looked like a good buy based on what little CL action I've seen.

I took #2 because the risk was so darn low. 4 ticks of risk, and took profit at the 00 level, for a 9:1 R:R.

Those are my "rules," but they were determined based on the context, on the fly, based on the level of activity I saw in the market (even though I won't count these towards my journaling because it's more for experimentation and not my regular trading hours). Discretion was used and in this case was profitable. In many other cases it likely would not be, but because of the low risk I was willing to place a trade that otherwise I wouldn't.

How would I label these setups on paper? The first is pretty easy I guess, a "breakout pullback." The second one? Hmm, maybe the "roulette wheel"? Or "reversal sort of"? Or "triple bottom in a pullback"? It's just hard for me to see value in placing so many names when the context can be so different each time.

Exactly! In my opinion, if you can't write it down, it's 'Roulette'

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