Focus your energy on finding good setups | stockbee

7/24/2014

Focus your energy on finding good setups

What do successful trader do that makes them successful. They trade specific setup ideas. Some trade only one kind of setup while some trade a bunch of setups. If market conditions change they change the setup or make minor adjustment to setups.

All successful traders have through research , empirical observation , setup templates from other traders have arrived at their own setup.

If you read How to Trade in Stocks by Jesse Livermore it details bunch of setups he discovered after trial and error.

If you read How I made 2 million in the stock market by Darvas it details how he developed his setup idea of trading high momentum and high growth stocks.

If you read How to make money in stocks by William O'neil it details the setups he uses to trade momentum and growth stocks.

If you read One up on Wall Street by Peter Lynch it details his setups to trade various situations.

If you read You Can Be a Stock Market Genius: Uncover the Secret Hiding Places of Stock Market Profits by Joel Greenblatt you will see bunch of setups for value investors.

If you read Trade Like A Stock Market Wizard: How to Achieve Superperformance in Stocks in Any Market by Mark Minervini you will discover what setup he uses. 

Traders specialize in setups and their thinking and behavior is driven by their understanding of setups. If they don't find their setups they do not trade. 

They know a vast amount about their own setups and why they work but they do not necessarily are experts on others setups.

If you talk to lot of successful traders you will find they had real breakthrough once they discovered a setup and focused on it. During the Stockbee Advanced Bootcamp many successful traders presented how they arrived at their setups. Before that they were also struggling. Once they discovered their setup  it allowed them to focus their time and effort and organise around it.

If you do not understand the concept behind setup selection you will struggle for many years. You will flirt from ideas to ideas. You will curse the market. You will say market is rigged. You will say everyone is out to get your money.

Unless you understand setups as key to profitable trading you are unlikely to make much money. Learn setups. Setups give you complete set of rules for every element of a trade for a particular timeframe or style of trading. A well thought out set up for swing trading will give you everything you need to do to trade that setup successfully. Once you understand it you will be able to trade it on your own without needing help. Most people who have very well defined setups have taken 5 to 10 years to arrive at it.

The trader who ran up his account to 96 million uses Episodic Pivots as his basic setup. If you know that then you don't need to know what color underwear he wears. If you understand the Episodic pivots setup you know what to do day in and day out. It has been detailed in significant detail multiple times and extensively discusses in every Stockbee bootcamp.

If you have well defined setup , you would be able to instantly recognize good opportunities and enter or exit them.

If you have well defined setup, you will be able to prioritize ideas and not waste time on marginal stocks or others ideas.

If you have setup oriented mentality you will ask everyone who posts trade idea to find out what setup generated that trade.

If you have well defined setup you will know instantly your entry, exit stops rules and not be a clueless person post entry. You will not be asking others what you should be doing or what is the target on this stock.

If you have well defined setup, you will not be easily influenced by any and every new tactic people talk about or sell as the new new thing.


If you really understand the language of setups you will not waste your time on all the macro discussion and end of the world scenarios.That is not a tradable setup.People who write those scenarios do not have tradable setups so they spend time creating fiction.

Focus your energy on finding good setups and mastering them, once you do that trading is enjoyable activity. That is the focus of this site since it started and you will see extensive discussion on various setups. Many successful traders tell me they remain member because of the focus on setups and not picks. They find new ideas from setup discussions.

 And as the 96 million man has shown , a good setup idea can change your financial future forever.....


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