Three basic types of setups

There are only 3 basic types of setups. All traders trade a variation of these same setup.

1 Breakout

2 Pullback

3 Exhaustion

If you understand each of these kind of setup and the logic behind each of them , you will be able to design your own setups.

Start thinking in setup terms. Study setups of other traders. That will give you good idea. While there are many many trading blogs, you will find very few have very well defined setup. You will find many are just randomly spraying bullets hoping it will work.

Setup is a setof conditions a stock or a situation needs to fulfill to be considered for trade. Setups help you decrease cognitive load. If you have done good job of selecting and defining your setup, you would have answers to :

1 What kind of stock should I trade

2 When should I enter then

3 How much should I risk

4 When should I exit

You will have answers to all these questions before you enter a trade. Then the only thing you need to focus on is execution.

Setup should match your personality. Some people can trade breakouts, some can not. Some people have natural inclination towards trading pulbacks. Some like finding tops and bottoms, they trade exhaustion setups.

If you try and trade setup that does not match your personality it will not work It will lead to psychological stress.

Once you find a setup the next important step is to organize like crazy around that setup. All your scans, software, data sources, hardware, and processes should be optimized for trading that setup.

I trade primarily a breakout setup and everything is organised to trade those setups. For Top25 breakout I have a well documented method and supporting structure. So if I see a stock in scan I can instantly find out its float, its distance from six month high, number of 4% b/o in last few days, its earnings, sales, IBD rating, sector rank. Everything I need to make a decision is well organised. It takes me few seconds to find information I am looking for.

Similarly for Episodic Pivots setup I have everything well organised. One of the advantage I have is I get access to number of tools developed by members for free. For EP Skytrader developed a tool to rapidly find information and he gave me access to it.

For the sector breakout DC has developed the Bluefin which has simplified life. Earlier it used to take me half an hour to find stocks from leading sector now it takes few minutes.

There is a risk reward calculator which quickly allows me to find R/R. Same way the position sizing tool allows me to calculate how much to risk.

For every single method I trade I have a tool or a routine and I stick to it. What it does is it reduces cognitive load, it makes you confident, and you are in control of the situation.

Many traders are not well organised around their setup and spend lot of time on unwanted processes or change routine . That is not very helpful. Organize like crazy around your setup and you will find trading becomes easy.

Best site to learn to trade

If you are serious about your trading and want to build an enduring edge, the Stockbee Member site might help you.

Members tell me they have tried a lot of things before coming to my site, and it has offered them the most extensive and detailed methods to swing and position trade. Members range from very experienced traders to novices.

No advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant tweets self-promoting the site, and no tall claims. Every member comes through word-of-mouth recommendations from existing members.

As a member, you will learn the basics of swing trading, momentum investing, growth investing, and risk management. You will learn about Stockbee Momentum Burst breakouts, Stockbee Trend Intensity Breakouts, Stockbee Episodic Pivots Breakouts, Stockbee Lemonade Strategy for 401k, and many other member-shared methods.

You will learn how to set up your own scans, how to select the right kind of stocks, how to set up stops, when to enter, when to exit, how much to risk, how to track your trades, and all other details about trading.

You will learn about developing your own methods and not relying on others for trade ideas. Develop your own edge. Once you develop your own method, you will have a lifelong profitable method.

The site gives you an opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different backgrounds and experiences willing to help each other. Members have shared their methods, scans, software, backtests, and market insights.

Every day, the emphasis is on continuous learning and upgrading of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors, and new traders.

You will see that many trading bloggers have been using my market timing methods, scans, and chart templates. They have developed their own methods based on my methods.

Almost every member comes through a recommendation of some of the leading trading bloggers and trading sites. 80% or more members continue to be members for more than 3 years. Most tell me that they stay on because every day they learn so much from the members' site.

If you are looking to develop your own trading strategy, the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on the members' site. Every method, every scan, every nuance is detailed, and all possible help is offered to design your own method.

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