The ‘A’ setups.. Part 1- BOF Hello everyone, Before going into the further topics, I would like to bring some charts into this series of articles. I have been using the word ‘A’ setup for a long time, but never talked much in detail about it. As the charts speak more than theory in trading related stu, let me give some of the best B!" trades I have taken in the last #$ days.
What can you notice in all the above BOF trades? If I am not wrong, the %rst thing you notice in those charts is how big the moves were after the entry, and how strongly they hit the target without looking back. But the sad truth is, we don’t make money from the hindsight charts. &e have to trade the hard right edge in the chart, and we never know whether it hits the target or not, whether the move will be impulsive or corrective, etc. 'o, as a trader, we should look at the conte(t before the start of that big move, the level where that big move has started and the behavior of price at the start of that big move so that we can take chances when we see these three things in the future. )othing happens if you say, I could have taken this move with my skill set and managed it until the end of the move , after the move has happened. If you could have, you would have. *he reason you missed a trade like that totally says that you didn’t see that move coming with the skill you got and you have got some homework to do if you want to catch a move like that ne(t time. +amn I am moving o the topic. -et me comeback to the main topic of this article. *he important things to notice in the above charts.
*he anging trend structure. /ou have to know when to call a market as a range, where to draw the range boundaries and what setups to look for in a ranging market. If you didn’t see that as a range and you considered them as trending markets and pullbacks, you will not get an idea to fade the move when market reaches the level, and will end up solacing yourself by saying that I would have got that move if I have taken a B!" of the swing low in that down trend, or B!" of the swing high in that
uptrend. /ou can even add strength and weakness analysis to support your decision in hindsight saying bulls getting stronger, bears getting weaker, re0ection blah blah blah..)e(t time you will take a B!" of swing high in an uptrend, you will end up taking a 1* trade and I don’t need to say what a losing trade can do to your performance in the rest of the session. *rust me. I have seen people like this. Accept this.. If you could have, you would have. If you are failing to take trades like that more than once and forming reasons after the fact, you are fooling yourself and you will not move anywhere. /ou do the same thing the ne(t time as well.. Harsh.. But true. *rades started at the range boundaries. 'o properly de%ning the range boundaries is the ne(t important thing. *rades are taken after the con%rmation of breakout failure. ie. after the second attempt failure to continue after the B2B or strong close against the breakout beyond the level that is broken out. I didn’t try to pick the e(act top or bottom. &hy big targets3 Because, in the absence of outside market force, B!" of one e(treme atleast tests the other e(treme. But here, the targets are tentative and I don’t have a problem to scale out at the intermediate levels when the trade turns out to be weak. )othing great to talk about the trade management. It’s 0ust how we manage trades conservatively. 4(pectations.. /ep.. 5ery important in every trade. /ou have to anticipate how the trade will behave if the premise is valid so that you can take an informed decision when market is doing cra6y things. I’ve recently read a 7uote from a Buddhism book which I am planning to get tattooed in the near future that says, 8+on’t react, respond 8.. I really stopped everything I was doing when I %rst read that 7uote and started thinking about that. *his is what I came up with. eaction is an instinct that is good for escaping from accidental situations like a %re burning sensation, or to catch limited opportunities like scoring a basket in the )BA game in the last few seconds. &hereas the response is an informed decision we can take, in a rela(ed mindset, not letting the internal hormones distract the perception. *here is no hurry to take instinctive actions in the market as the opportunities are unlimited, and it is totally ok to miss some provided the risk is under control and you totally accept that. 4ven in life for that matter. /ou don’t need instinctive actions most of the time. I know I am moving away from the topic again. -ets get back.
*hat’s it. *hese above points makes the B!" of the range boundary an ‘A’ setup. +oes that mean it will give the same type of pro%ts everytime3 +e%nitely no. But when all these things are in place, the setup got the potential to give a big move. &e 0ust need to manage the trade to make ma(imum out of the trade by reading every single candle. A lot of trades might end up in losing paper pro%ts to give a B4 result, or sometimes even a
loss especially when you are at the beginning stages. But that’s %ne. /ou will learn slowly to manage trades like this. But remember, don’t 0ust hope for big targets all the time no matter how strong the setup is. 9anage the trade actively, at least from the **" chart. Hope this article gives a brief look into the ‘A’ setup thing. I will try to bring e(amples for the other setups as well when I %nd them in my trading. Happy trading, :;agadeesh 1handra
min. chart from #min. chart in all the markets to daytrade as candle closes, buying and selling power representation by the tails are making much sense in >min charts.
Tiin! the BOF trade.. Hello traders, I hope you are doing great. "irst of all, sorry for deleting the 0ournal section from this website. I have done that as the results are giving a wrong sense to the readers. 'o, I am planning to discuss only about those trades of mine, that adds some educational importance to you. "rom now on, whenever I mention that I have taken a trade in live, I will try to post the screenshot of the %lled orders so that you will understand that the trades are real and that can be taken in live with practice. 'o many people might not accept picking the tops?bottoms with lesser risk, let them be. 4nough with that B'. -ets talk about one of the trades I have taken yesterday.*he timing was picture perfect. "irst lets look at the structure of the market in trading time frame. .
Future Bias"- 9arket is in a sideways range and is trading at the range resistance. *here is no bull strength shown at the resistance. 'o, as per the third rule of future bias, sideways environment continues. #etup"- 'o, the possible setups are *'* and B!". As there are no evidences of bear strength, my gut is for a B!" trade. Hence, I have to wait until market gives a breakout to the upside. Any sign of weakness in bulls after the breakout is a trigger for my B!" trade.
As e(pected, market gave a breakout to the upside and immediately got re0ected as shown in the above image. If it fails to continue in the second attempt, I will prepare my orders to give an entry. *his is when my focus moves to the -*" chart. I need to know how price is going to interact with the high formed after the breakout, after testing the resistance which is broken out.
*he above image is the -*" chart during the retest of the high after breakout. 2rice clearly stalled at the high point, which is @>$. enerally, I pull my B!" trigger during the second attempt failure. But, this second attempt to move up was a bit strong. Hence I thought of giving an entry with stop order if that second attempt fails or I will give the entry with limit order if there is a weak retest of highs before hitting the -&2 of the trade. -uckily, the second scenario played out.
*he high was @>$. 9y order was at @C, 'top was at @>@. "irst target was @#>. )ow the risk to reward is almost D=> . I anticipated that this weak retest of the highs might not e(tend upto the black line. 'o, placed my entry one tick below that and it got a %ll. *hen I cancelled my stop entry order at the -&2. *his is the outcome of the trade.
Was $ 1%%& sure that this trade !onna 'or( out at the tie o) enterin! the trade? )o.. I 0ust knew that the odds were in my favor of the trade. Was there a chance o) this trade )ailure at the tie o) ta(in! it? Absolutely. 9y stoploss would have taken care if my premise was wrong. What 'ere the thin!s that $ loo(ed at* 'hile a(in! this entry? High probable future bias which favored a breakout failure. 2rice level that I want to look a bit closely using -*".
&eakness and e(haustion against my bias at the price level I am interested in before placing the entry order. 9inimum risk to reward of the trade. 9arket had taken care of the rest.
*'*s and B!"s.. )othing else.. Hello all, *rading is a process of evolution and you have to grow as a trader every single day. /our career starts to end when you stop growing. It’s like rowing a boat in the upstream and you will end up in the place where you started Emuch behind in the worst caseF when you stopped rowing. I have written an article about using 6ones in stead of lines for range boundaries back in 9ay. I am no more using them in my trading as I have found a way to use hori6ontal lines everywhere and that is saving me from a lot of early entries and chasing. *hanks to active trade management.
#o* 'hat is it?? I have already shared the type of price interactions in one of my previous articles for *'*, B!" and B2B setups. "orget about B2B for a moment. All the %ve setupsE2B, 12B, B2B, *'*, B!"F that I use drills down to only two setups *'* and B!", once the bias and the price level to operate on, is chosen. I have already e(plained how I form a bias in my previous articles. )ow the ne(t thing is to pick a level to operate on. DF In *'*, B!" and B2B setups, the level is the H*" '? or the ange '?. 'o it doesn’t take much eort to point them on the chart if you are good at structuring the market. ;ust go through the %rst three articles in the Beginner section to know how I structure the market if you are new to my trading style. @F "or 2Bs and 12Bs, the virgin level Ethe level that is untestedF that caused a supply?demand imbalance in the recent past is where will focus on. /ou might have already know how I do that from my recent posts in the "B page. Here are they.
H*" '?Efrom H*"F
5irgin 9inor '?G Efrom -*"F
*rap level in the recent impulse move that trapped traders against my biasEfrom -*"F
Intermediate 'H or '- while looking for a 12B.
*he above four types of levels are arranged as per the priority. 'uppose if the trend is up and there is a H*" '? which is above a 5irgin minor '?, I look for a possible entry at the H*" '? as it is at the top of my priority list. 9ake a note that I mentioned ‘possible entry’ and market has to con%rm e(haustion at that level for me to place my entry order. If there are no signs of e(haustion at the level I am looking at, I ll pass on that level and look for an entry at another level. !nce the bias and the level is chosen, I will wait until market reaches that level. In other words, I will wait for a counter bias move to reach that level and react when it shows the sings of e(haustion at that level.
#F As I am fading the move against the bias, at the level I have chosen, my entry can be *'* or B!" of that level. I will make a decision whether it is going to be a *'* or a B!", by looking at the momentum of the move I am fading Ecounter bias moveF. !nce that decision is made, I will look for one of the price interactions Eby looking at -*"F I have e(plained for *'* and B!" to place a limit entry order. -ook at the following image that I have shared yesterday in "B page.
*he setup there was a 2B and the entry was made at the red circle I have marked in the **" chart. According to my feel for the orderow, I anticipated that it is going to be a *'* of the level I have chosen Ea bull trap levelF, that coincided with the %rst diagram I have given in the ideal price interaction article for *'* setups. EB!" of 'H?'- *'* of the levelF. &aited for the e(haustion and timed the entry near the level. )ow look at the trade taken by one of my friendsEthe %rst trade in the following imgaeF, 'tefan on the same day which I missed out of hesitation.
*he setup here is again a 2B. *he level he focused on was minor '? from -*". -ooking at the immediate re0ections from the new lows, he anticipated that it is going to be a B!" of that level rather than a *'*, waited until it breaks that level instead of placing a blind limit order at the levelEwould have stopped out before moving down if looked for a *'*F, and then placed an order at the con%rmation of B!". reat stu. *he interaction here falls under the %rst interaction I have given for B!" in the price interactions article, ie. Breakout followed by immediate re0ection and a test of the the level before moving in the direction of the bias. *his might look like some complicate procedure for you if you are new to this, but it’s not. /ou 0ust have to make a decision whether it’s going to be a *'* or B!", then wait until you are proved correct by the market while it is interacting with the level,and then time the entry. *rust me, your initial risk will be much lesser if you master this skill as you are entering at the edges of the structure, and you will get enough time to scratch for a small pro%t or at least breakeven if you are proven wrong by the market. -et me know if you don’t understand anything and I ll try to help as per my knowledge. Have a great weekend. :;agadeesh 1handra
2.'=: *ry this in a demo account or market replay or simulation before making it as a part of the strategy. It’s not advisable to directly try new stu during live as it costs a lot of money to learn. Also, this is not for beginners as working with limit orders makes them over trade and put their account at risk.
