Hunt for structural setup | stockbee


Hunt for structural setup

If I have to give one advice to a new or struggling trader, it would be to hunt for a structural setup.

A structural setup is inherent to market behavior and is valid till market structure changes.

Lot of time discipline is touted as answer to trading problems, but if you do not have structural setup no amount of discipline and mindset is going to help you make money.

All successful traders trade a setup or a bunch of setups which they trade day in and day out. They have skill specific to their setup, which they have developed over several hundred trades and .

Setup is a set of conditions used to enter and exit a trade. It is a set of controllable actions a trader can take to identify, enter and exit a trade.

Successful traders have vast expertise on trading a very niche setup.

The problem for beginner trader is that as a beginner you will not understand the importance of a setup. Because there is no manual or book which tells you that the key to trading is to find setup.

The other problem is in the beginning you will not be able to distinguish between a structural setup and a fleeting setup idea.

Any expertise is task specific. So defining a specific task to become an expert at is very critical.The first step in becoming a good trader is to arrive at a tradable structural setup. And then become an expert in trading that particular setup. It is a very microscopic skill.

What is involved in developing a setup is you start with a structural tendency of the market and develop process and guidelines to trade it. Then you refine the process and guidelines till it works. This is a iterative process.

The task for novice trader is to go from their current stage to a level where they have a setup which works for them and suits them perfectly. You will have immense confidence once you reach that destination. Once you can make a setup work, then it is easier to make other setups work or develop other setups. 

So if you are a trader looking to progress your trading further hunt for structural setup and develop expertise to trade them.

1 comment:

Tommy said...

Oh, that's so good, thanks for that thought.