In your trading journey you will have significant breakthroughs once you learn the language of setups. Profitable traders think in setup language while novices think in individual stock term.
In a day you will see several posts by members about individual stocks or emails about individual stocks. If you actively participate in a social media site like Stocktwits, you will see several posts on individual stocks. Something catches their fancy and or they know about a particular stock and they are enamored by it and want to know whether it is good buy or not. That thinking is not much of help.
Setup selection is key to successful trading. Setup selection allows you to condition your behavior. It allows you to develop your procedural memory. It allows you to automate your thinking. Setup oriented thinking is process based thinking. It is how do I find this kind of stock again and again kind of thinking. It is about ways to catch fish.
When it comes to setup selection your time frame is very critical. A setup that is good for day trader may not be good for swing trader. A swing trading setup may be extended setup for position trader.
Over next 30 days we will look at vast range of setup ideas. Once you get in to details of those setups you will learn the basic building blocks of designing your own setups....
Study of setups is key to developing methods. A extensive understanding of setups would give you a life long foundation to design your own trading setups based on your personality and time horizons.
Once the series is over the entire series of posts would be compiled in a separate section in learning areas
Over next few months we will look at each of the factor in detail...