Tips for Finding Great Trading Set-Ups

There's a phase most traders reach when they begin learning to trade and it becomes a struggle to get past this first phase. Let’s call it the Analyst Phase. It’s a great place to be however not where you want to stay!

Let me explain.

This is the stage in your development in becoming a trader where you can perform some great analysis. You can break down a chart really well, explain what's been happening in the markets, Understand fundamental analysis, what different levels are showing you on the chart and what may happen next in the markets. In other words your becoming a financial analyst. 

The problem with this phase is, that's where the process ends... as a piece of analysis work! People that are stuck in the Analyst Phase aren't using their analysis to complete their trading ideas and actually execute trades.

In other words, they're a great analyst & market commentator, but they're not a real trader yet.

If you're stuck in this phase ( Many traders get stuck here ), it's likely you're there because of one of these points or both of the points I'll be discussing. These two tips should help you to start opening your eyes to what you are doing and take the leap into the real market from analyst on the side-line to a real profitable trader.

1. Know what trade set ups to look for

Imagine a situation in your life outside of trading & the markets (yes, life outside of the markets does exist! ) where you are looking for something, you are trying to find something .

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Now, think how successful you would be at finding that thing if you actually had no idea what it was you were looking for. It would be like trying to find the pot of gold under the rainbow.

Occasionally you might find the thing just by stumbling upon it and realising that it was, in fact, what you were looking for in the first place. However, in most cases you're going to go through a process of searching and searching until you either go without finding anything or just give up on the search (finally admitting there is no pot of Gold at the end of the rainbow).

That sounds stupid & crazy, but this is what traders that are in the Analyst Phase do. They're looking for trading opportunities & analysing markets but without knowing exactly what a trading opportunity is to them. They don’t have a system! Many traders don't have a trading system and ends up setting themselves completely unachievable goals. To learn more about setting realistic goals read our previous article on goal setting for traders

Of course, the markets are dynamic and you're not going to get a completely identical situation for every trade set up, every trade is different, but there should be certain characteristics or criteria for what a trading opportunity a real profitable trading opportunity involves.

That should be beyond simply the confirmation points for the entry to go long or go short at a given level, but also the overall situation and movement of the market. How long would you expect to be holding a trade for ,What sort of outcome is ideal for your trading style ? Is it one move in the market, are you trading the structure of a new trend? Do you know what are your exit criteria ? When do you know when to move your stop loss to protect your capital ? Do you know where to set your stop loss?

By understanding what sort of move you are looking for in the market, you'll know what sort of signs you're looking for to show there's an opportunity for you to enter into a trade or to exit a current trade. Now your analysis becomes more meaningful and real as it will be leading to a real trade that you will execute and have specific points of interest in the markets.

If you are a VIP Member, we have many Analysts that they explain the exact reasoning for why they take a trade and why they exit. Also we have plenty of educational videos where we break down how trades are entered and exited. Explaining the process of building a trading system and analysing the market in depth .

2. Look for trades in the Right place

OK, so you now know what you're looking for in your trading system... great! So why are you looking in all the wrong places for set ups?

Imagine you're looking for the sink to wash your hands, you wouldn't search in the living room or in the attic just to be 'more comprehensive' would you? No, direct your search in a way that's efficient and is likely to lead to the result of becoming a profitable trader.

This is what we need to keep in mind with our trading. There is no point in having a clear idea of what a trade looks like for you and then doing irrelevant analysis on markets you haven’t studied enough that won't lead you to finding it. 

Remember, your time is valuable, use it wisely as the saying goes Time is money. This is especially true when markets move and you just stay watching not having a plan to profit from these moves.

Think of your analysis as a guiding process. You're going from having all the possible markets at the top of the funnel and you're going through a series of steps (your trading system) that takes you from that huge list of potential markets all the way down to finding the trading opportunity  that suits you and your system and executing it.

By taking this clear approach, you make every step in your analysis purposeful and meaningful . This will not only make you more efficient, but will also help you to reduce the confusion and so you can actually move from being an analyst of the markets to being a real trader.

It is very common for traders to do a huge amount of analysis and end up confusing themselves or just having a lot of unnecessary work there just for the sake of it and try reassure them of their analysis, rather than directing their efforts in a way that actually leads to them finding a trade set up.

Be more precise, be more purposeful in your actions and your analysis and enjoy the benefits of a more directed trading approach going from an analyst to a trader.

If you want to get start to learn more about trading styles, risk management and how to get start in the financial markets 

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3 Steps to Trading Successfully 

  1.  Join A1 Trading and focus on learning the reality of trading the financial markets.
  2. Start applying trading concepts learnt and focus on achieving consistency and discipled trading and learning the basics of risk management.
  3. Take your consistency and get funded through . Trade on live account with consistent profit.

Graphic Design: Alex Singeorzan

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