Renaming Setups

 REVIEWING BEST SETUPS

The goal here is to look at my best all time trades and their Daily setups, see whats in common, and come up with new ways to label my setups.

Ive been labeling my daily setups as simple triangle breakout, or breakout + failure, or pullback + failure. There are a few other major variables I would rather label these by. 

Taking the tallies.

Ive got 31 trades to look at. 

Less than 1 month consolidation ////////

1 month consolidation ///////

2 month consolidation /////////

3 month consolidation ///

3+ month consolidation /////

Out of consolidation ///////////////////// 21

Run up to breakout ////////// 10

Value Area Top Edge /////////////////////// 23

Value Area Middle /////// 7

Very Thin Prominent VA ////// 6

No Significant VA /

Breakout ////////////////////////////////// All

Day of.. 

Anch Vwap from ATH Reclaim /////// 7

Anch Vwap from ATH Bounce

Above ATH Anch Vwap ////////////////////// 22

Above ALL Anch Vwap ////////////////////// 22

Anch Vwap Squeeze/Pinch /////////////// 15

Anch Vwap Reclaim //////// 8

Anch Vwap Bounce ///// 5

Into any Anch Vwap //////// 8

No Anch Vwap ///

Day After Major Anch V Reclaim ////////////////////// 22

Above 9/20/50MA //////////////////////////// 28

Any MA above ////// 6

Day of Reclaim all MA //// 4

Day After Reclaim all MA /////////////////////// 23

Very tight MA coil ////////////////////////// 26

9/20 MA break ////

50 MA break /////// 7

Volume Engulf day before ///////////// 13

Failed Breakdown before ////////////////////// 22

Trendline involved ////////////////////////////// 30

Not a big household/highly traded name ////// 6

INTRADAY

Triggered first 15 min of day ////////////////////////// 26

Triggered and never came back /////////////// 15

Ran straight up for at least 30min /////////// 11

Any Shakeouts /////////////// 15

Clearly, there are some clear themes here.

For starters, time/length of consolidation really didnt seem to matter much. I had just as many 1 Month or less trades as I did 2 months or more. The real factor was absolutely Anchored Vwaps, and MA consolidation. 

Of 31 Trades total that made up my biggest wins this year:

-68% Were right out of consolidation

-32% Were run up to Breakout levels having already made a move into them. 

-74% were right at top of Value Area edge

-71% were above all possible Anchored Vwaps

-48% were pinched in between Anchored Vwaps

-74% were a day after it recovered a major Anchored Vwap

-90% were above 9/20/50MA

-19% had any (9/20/50/100/200) MA above

-74% were a day after it had reclaimed and closed above all MAs

-84% had a very tight MA (9/20/50) coil

-35% were on day break of MA (9/20/50)

-42% had engulfing volume day before

-71% had a failed daily breakdown at least a week before hand

-97% had a daily trendline break involved

-19% were not 'big' name high vol traders

INTRADAY

-84% triggered in the first 15 minutes of the day.

    -(If I had better screenshots, id be willing to bet this could be the same for first 5 minutes of the day)

-48% triggered and never came back to retest level

-35% ran vertical for 30 minutes

-48% had some kind of shakeout before further moves

These are some astonishing numbers. 

So for starters what doesnt matter?

-Volume

    -This one is surprising to me. For years ive convinced myself it was everything. Perhaps volume of dailies isnt as important as volume intraday. Im not going to flat out say it doesnt matter because clearly volume shows interest, and interest is everything. Without interest, your stock/trade is not going to move. But it certainly doesnt seem to be the end all be all.

-Length of consolidation

    -The longer it is, the more traders are involved, but doesnt necessarily mean that it can increase likelihood of a big move. Almost a third of my trades were less than a month long in consolidation

-Moving Average Breakouts

    -Rarely in my screenshots did I see a trade that had a break of consolidation, into another MA to break through. 

And thats really it. These numbers are pretty clearly one sided

So what did matter most?

-Consolidation

    -Ranges. Time. Other traders being involved in the name. Either in trouble, or looking to add, or get in on momentum. 2/3 of best trades were coming out of those ranges.

-Value Area

    -Its such a pretty sight with volume profile on the right edge, seeing such a clear clean breakout setup with a super thick tight Value Area range just clearly saying there's about to be a big shift of balance. 3/4 of my best trades were at the top edge of the value area. 

-Anchored Vwap

    -Trading the best, strongest stocks are bound to pull in at some point. A great way to measure when its ready to run again is by the ATH anch vwap, or a similar big event Anch Vwap. 7/10 trades were above all Anch vwaps, and a day after it reclaimed them all. 

-MA Consolidation.

    -9/10 of my trades were above the 9/20 and 50 MA. 

    -3/4 were a day after it had reclaimed all 3 or a couple. Ties in with Anch Vwap reclaim.

    -85% had tight MA consolidation

    -Shows power, more balance, and at same time, imbalance. 

-Daily Failed break opposite direction.

    -Failure to move lower means more trapped shorts, and more likely to move higher. If we dont want lower, we must want higher. 

-Trendlines

    -Holy hell all but 1. Pretty strong indication there that my multiple breakouts variable tag matters. 

INTRADAY

    -85% trigger within first 15 minutes of the day. Ive recognized this lately too. It happens nearly right at the bell. You gotta get in or its gone.

After that, its a coin flip as to whether its going to run and not stop, give me a 2nd chance, or try and shake me out at all. 

So where does this leave me?

Its clear an A+ setup will have

    -Consolidation

    -Reclaim of Anch Vwap

    -Reclaim of MAs

    -Tightly bound MA coil

    -No MAs, or AnchVs above

    -Top of Value Area 

    -Trendline Break alongside Range Break

    -Failed breakdown opposite direction

Not just about trendline breakouts anymore, I needed a better way to label my setups.

Im gonna run into problems when I have only a few of these, so now im thinking back to labeling by tags. I dont know if I can come up with a name for these specifically.

Consolidation Breakout with reclaimed Anch vwap, coiled MAs, VA breakout and trendline break. 

CBACVT

Thats ridiculous.

Breakout, with AnchV, MA reclaim, VA and TL.

AVMAVATL

Hm maybe something here. I can consider each tag with 2 letters.

BOAVVAMATL

Would be, breakout trade, with AnchV reclaim, VA break, MA reclaim and TL

BOVATL

Simply BO with Value Area and TL break

PBAVVA

Pullback trade to Anch V and VA edge

It is important that I label my setups these way because I want to be only trading setups that have shown me my best edge. And these are the key variables in my best trades, so I need to be focused around labeling my trades with these variables in mind. 

Other tags such as News or Volume or huge level, weekly, MACD I will still keep track of and tag in my spreadsheet, but the setup and tags have to be separate.

a BOVATL can have News or not, but I dont want to define the daily setup with news in mind, because it is irrelevant. News is not a key factor in my best trades.

I think im getting closer

I already label my trades strictly by Breakout, or pullback. Now that I know my main key variables, I can create another separate tab next to it to tag in the other most important ones. 

The daily setup is either a breakout, or pullback

But what important tags that matter most does it have?

    -Consolidation, at least a week

    -VA edge

    -Above all Anch V

    -Day After Anch V reclaim

    -Above All MAs

    -MA tight Coil

    -Day After MA coil reclaim

    -Failed Daily Breakdown

    -Trendline Break

    -Volume

So kind of convenient, I have 10 major tags here

Its a breakout trade, but with what major tags?

Is it a 3/10 breakout? a 7/10? 10/10?

Its a pullback trade, but with what major tags? 

5/10? 9/10?

Its starting to click to me that you cant name a breakout setup along with the other tags because where does it end? I could also be looking at MACD or OBV. RSI, its endless. Price and volume have been the things that have made the most sense to me over the years, I need to follow up on that and not spend time on the other lesser variables. Because literally it does not end with the amount of indicators you could pay attention to. 

Perhaps im focusing too hard on trying to Name a setup. The way I think, the way I trade, the way Ive learned over the years, is that nothing here is black and white. Nothing is yes or no, all in or all out. Why should I try and label my daily setups the same way. They have variables, or they do not have them. 

Im thinking about ADF guy on twitter. I remember a post he said that a certain setup had a 90 something % ADF rating. So that means that

1. He had a setup

2. He had other variables he tracked that he gave a score on that setup on.

I know he trades the low floaters, but also swings and sells calls. 

This is kind of where im at right now. I have my setup (breakout or pullback), then I have my other variables that I give that setup a score on. So somewhere down the road, I will have stats on

Breakout, with 8/10 score has X profitability and whatnot.

Pullback, with 4/10 score has X stats and WR and whatnot.

So eventually Ill have enough data to say,

'Ok I got a good looking breakout here, and it meets 9/10 criteria, based on past data, theres a pretty good chance this ones going to be a big win.

Its not about naming the setup, or describing what it is. It again boils down to thinking in terms of probabilities. Even when it comes to tagging your setups. 

I think this is what I need to do 

From there I can keep plenty of other stats based around that.

Who knows. somewhere down the road im sure ill revisit these ideas once again and come up with something new to filter it down even more. But this feels good. It feels right. It doesnt feel complete, not sure anything in trading ever does, but this definitely feels right and a great improvement and way to better organize and label my trades.