How many set-ups do you use ?

[Salty Gibbon]

I have been day-trading NASDAQ stocks for the past 18 months or so and I have considered this period to be one of education and experimentation.

Thankfully my capital pot today is greater than when I started so I would say that my learning phase has been successful.

I have now been trading profitably on a consistent basis for 6 or 7 weeks so I am at the point where I would say my experimentation and initial education phase is at an end.

It is now time to progress to the next phase of being a serious professional trader and consequently I am now beginning to put together a proper trading / business plan which will incorporate a detailed trading system or method of trading.

Within this trading system I will detail the various set-ups and triggers that I use to enable me to get into a trade.

And there lies what has been my major problem during my “training” phase.

I use many different set-ups - some text book set-ups and others self-devised – together with a maximum of 2 different triggers.

Set-up + Trigger gets me into a trade.

The word “many” is important because I feel that I look for too many potential set-ups when trying to get into a trade and very often I cannot choose between all these set-ups. The result is indecision and missed trades. The price goes steaming off in one direction and I get left behind still trying to decide which set-up I should be looking for.

I would like to get a feel for how many set-ups most traders would generally use or look out for at any one time.

Is it just 1 or 2, 10, 20 or more ?

 

[Roberto]

I think I'm in rather a similar position to you, although in my case that difficulties you refer to above (with which I strongly identify) apply even more to _exiting_ from trades. However, to answer your question, I routinely trade about 5 different set-ups.

 

[Trader333]

For me it depends on the type of trading day we are having, ie trending or non trending. On a trending day I will use no more than 2 setups and on a non trending day I could use maybe 4 or 5.



Paul

 

[gene]

It's very frustrating to see a market run away from you, leaving you behind. But isn't it better to err on the side of caution? Just remind yourself that there are other markets/other times in which you'll make money. You've been doing well...Don't get too brave. Stay a bit afraid.

 

[Scooby]

I trade 1 core setup but have 2 other secondary setups to trade as and when I find them.

I do know of many other other setups however like Salty said in his post when I start trying to trade every setup I end up missing most of them.

I scan the whole US market every 2 mins looking for stocks setting up as per my core method and on a good day can find up to 5/6 that setup and on a bad day 1/2.

HTH.

 

[Salty Gibbon]

Thanks guys. The responses so far would indicate that few is preferable to many.

I am toying with the idea of using 2 or 3 set-ups at a time but changing them during the trading day as the different phases of the US trading day unfold.

For example I would define the different phases as follows :-

Opening phase.........2.30pm to 3.00pm
Afternoon phase........3.00pm to 5.00pm
Evening phase...........7.00pm to 9.00pm

The market often displays consistently different characteristics during each of these phases which may require differing set-ups.

 

[TheBramble]

Salty, pleased to hear of your positive results. A bit surprised the trading system formalisation is happening now AFTER the event rather than as a prerequisite to successfully trading. Luck has obviously been on your side and long may it continue.

As regards setups, similar (but opposite!) to Trader333. A trending market has me looking for 6 primary setups. Non-trending I'll be looking for just 2. I'll also specifically limit the number of stocks I'm 'interested' in on a trend day if a lot of setups are 'primed' - I like to keep the 'load' balanced. However, I'm always researching so this number is not static.

I'd agree with the intent of your summary above though - I prefer fewer to more numerous setups. Simply because they're (for me) mostly visual/numeric. The sort of things I use for my criteria are not easy (or even possible for the most part) to code into scanners and I have VERY limited brain power at my disposal...

As for phases - I only trade 60-120 mins after the first 30 mins and the last 60 mins.

 

[Salty Gibbon]

A bit surprised the trading system formalisation is happening now AFTER the event rather than as a prerequisite to successfully trading. Luck has obviously been on your side and long may it continue.

Tony, I am of the opinion that you cannot properly formalise a plan until you have learnt your trade to an adequate level of competence. I believe that I am now at a certain level of competence which allows me and probably requires me to formalise such a plan.

Besides, over the past 18 months I have tried and tested almost every "trick in the book" so to speak and I have changed my style as many times as the weather until I have arrived at something which suits my intellect and temperament and most importantly, which has a high probability of winning on a consistent basis.

The T2W website has both helped and hindered me. I have been able to learn a lot here but I have also probably overloaded myself with other peoples' ideas and tried too many things. At times confusion has reigned supreme and there has been a lot of irritation and frustration.

Thanks for the input on set-ups. Interesting that you are the opposite of Paul on trending and non-trending days. I would probably side with you on that one but I guess it all depends on exactly what set-up you are using and how common it is.

I have VERY limited brain power at my disposal...

I sympathise entirely. I used to think I was clever and I probably was and maybe still am. But as the years have advanced my brain power has certainly declined. Maybe too many beers or whatever ! But these days my powers of retention have declined and my attention span is tending to zero. Reading a book ( other than Bernard Cornwell ) requires a detailed plan and involves maybe 10 pages a day at most over a very long period.

 

[TheBramble]

Thanks for the input on set-ups. Interesting that you are the opposite of Paul on trending and non-trending days. I would probably side with you on that one but I guess it all depends on exactly what set-up you are using and how common it is.

I hasten to add that a great deal of what I have learnt which has been of direct and immediate benefit to my trading has been picked up on t2w and primarily from members such as Trader333.

As I posted 'my' take on setups and compared it to Paul's, I immediately started to question where I was going wrong.....

My input for consensus only. YMMV.

 

[Salty Gibbon]

YMMV ?

You see, that is the problem with T2W. I find myself agreeing with your "take" and then immediately you find yourself questioning it.

Now I am rethinking, lol..

 

[TheBramble]

YMMV ?

A mis-spelling of the Hebrew name for God.

No, just kidding "Your Mileage May Vary".

You see, that is the problem with T2W. I find myself agreeing with your "take" and then immediately you find yourself questioning it.

Now I am rethinking, lol..

Well, that should work OK (i.e. square one) then, shouldn't it?

 

[Salty Gibbon]

I have visited Square One ( or GO ) more times than I care to remember.

Unfortunately you do not collect £200 every time you go past it.

 

[debs]

YMMV ?

You see, that is the problem with T2W. I find myself agreeing with your "take" and then immediately you find yourself questioning it.

Now I am rethinking, lol..

Salty....maybe if you knew exactly what the 'set-ups' are (rather than just how many are used in each market situation), you could then make a more informed decision as to which 'take' is correct.........D.

 

[Salty Gibbon]

Totally agree Debs. See my previous comment.

I guess it all depends on exactly what set-up you are using and how common it is.

 

[debs]

Totally agree Debs. See my previous comment.

Salty: Whoops - I missed that comment !

Bramble and Trader333: Would you care to share the details of your 'trending' and 'non-trending' setups with us ? I apologise in advance if that is a cheeky request ?

D.

 

[TheBramble]

Bramble: Would you care to share the details of your 'trending' and 'non-trending' setups with us ?

Debs, for my part, any meaningful or useful response to this question is outside the scope of this thread.

 

[debs]

Debs, for my part, any meaningful or useful response to this question is outside the scope of this thread.

Fair comment !......Debs

 

[Trader333]

Debs,

I have previously posted all of my setups in realtime as trades were being taken on this site although it was a long time ago.

Tony and Salty,

There is no right or wrong answer to how many setups should be used. In my view it is very much down to personal choice and what works for each trader.


Paul

 

[Salty Gibbon]

There is no right or wrong answer to how many setups should be used. In my view it is very much down to personal choice and what works for each trader.

Yes Paul - you are absolutely correct. In starting this thread I was just trying to get a feel for what other traders tended to do in respect of how many set-ups they consider when trading.

It is now apparent that the answer is "NOT MANY" and this has convinced me that I should carefully select those few set-ups that I feel comfortable with and which work for me, and discard the ones that I always look for but rarely use.

Thanks for all the input.

 

[bbmac]

I was having a similar discussion with a fellow trader last week: Ie you can eithet tdrade one good set up across sevreal different instruments that you know this set-up achieves a good return on, or several set-ups on 1/2 instruments. I trade forex and prefer the latter, ie several set-ups on 1/2 pairings. When I say several I mean 3-4, and they are all variations on a theme, with varying degress of confidence in them, and consequently varying probabilities of producing a successful trade. I do however stick with the hi-probability and therefore lower risk set-ups that i know to work on the pairings I trade. How do I know they work? 8-12hrs/day x 3 years. There is no substitute.

It is of course also useful to note the swing points in my case intraday swing points so that I know wether I am trading with or against the prevailing intraday trend and can adjust money management/stops/tragets accordingly i required.

As far as ranging or trending goes, I find that using the 1,5,and 30 minute chart is sufficient ie: taking signals off the 1min chart 'with trend' I would look preferably for the 5 and 30min to be confirming the trend. If for any reason I was not in a trade with the trend (haha...ie a bad exit!!, and I know these well) I would look for a safe re-entry to the trend or a scalp against trend, with a longer target if an intraday swing point has been triggered.

hope this helps.