System SetUps

Our mission: Identify system based actionable Technical SetUps. The purpose of finding these setups is simple: Outline favorable entry points at key directional turns to deliver high returns. How to do this is much more complex and if it was easy everyone could do it. In fact, many traders struggle identifying favorable entry and exit opportunities. Where to enter, where to exit, how to manage risk with stops?

Our systems allows us to identify these setups across asset classes and requires sharp technical analysis skills and a keen understanding of market behavior, as well as a developed sense to read the tape. Markets are a complex and often counterintuitive environment challenging even the most seasoned participants.

To view recent examples please visit Technical SetUps.

Our task is to make technical analysis work by determining what markets find relevant at any given moment. And this is key: What is relevant changes and one must be highly alert to these changes and adapt accordingly. And hence technical analysis is as much art as science, combining an understanding of the key ingredients with an eye for structures, levels and signals that provide the basis for expected resistance and support and potential shifts in direction.

And this is in essence what specializes in on a daily basis. Over the years we have learned to employ and adapt a wide array of tools and signals that we analyze on a regular basis to help derive a favorable trade direction be it long or short.

Mella employs her unique KISS (keep it simple stupid) approach aiming to take the stress out of technical analysis:

“Many technicians overcomplicate charts using far too many tools. I’ve found over the years that the simple approach is best not only from a viewing charting perspective but also from a trader’s perspective. If you understand how a KISS approach works then this is much easier translated into your conviction trade process. My aim is to help show traders that they don’t need complex charting programs or training and that actually KISS is a very easy method to learn and follow. Patience is also a much needed critical psychological tool when identifying a trade set up. One must WAIT for the set up to approach its buy or sell zones and of course use highly disciplined risk management. These simple combined tools will give any trader a great edge in these ever challenging markets”.

Here’s a classic example of KISS employed during a highly volatile market environment with high uncertainty, a KISS SetUp for $SPX long (click image to enlarge):

The setup shows in advance the identified buy zone and expected direction and employs the method of scaling to book profits and reduce risk exposure as the setup unfolds leading up to the close of the setup (source: KISS SetUp: $SPX)

While Mella is focused on KISS setups Sven employs further technical methods in Live Alerts utilizing a variety of technical tools, in this case a long entry zone was identified for a technical retrace using fibonacci levels for a Technical SetUp: $SPX long (click image to enlarge):

This particular setup identified in advance a likely long entry opportunity with specific aim for the .618 fib zone as a retrace target and bounce zone (source: Technical SetUp: $SPX)

KISS and Technical SetUps also work on the short side of the equation. Here’s a KISS example for an index short, the $RUT, with the Sell Zone (SZ) identified and triggered and the setup closed (click image to enlarge):

(source: Technical SetUp: $RUT)

Closing setups is just as important as opening them, for 2 specific reasons:

One reason is to protect profit and know when the conditions no longer favor the setup’s original direction.

Here is a good example of identifying a KISS short setup for $AMZN and also knowing WHEN to close the setup (click image to enlarge):

(source: Technical SetUp: $AMZN)

The second reason to know when to close a setup is when it becomes invalid and does not trigger as setups are not a 100% guarantee, hence the use of stops is critical to define and limit risk.

The following setup for $UNG is a good example (click image to enlarge):

(source: Technical SetUp: $UNG)

Patience is another critical aspect of setups, if a setup is valid there’s no reason to close it until it becomes invalidated. Scaling out yes, but closing, not until it is deemed invalid.

For example $XLE was identified as a long setup into its buy zone (BZ), yet the subsequent chop took weeks of patience for the full setup to trigger (click image to enlarge):

(source: Technical SetUp: $XLE)

In hindsight these setup outputs look easy and straightforward, the reality is that in the moment of actual price action traders deal with high levels of uncertainty and this, in particular, is where Mella outlines levels of patience and keeping her members psychologically focused.

KISS and Technical setups not only give seasoned investors, traders and funds an edge in their own strategy, but also serves as a great educational tool for anyone interested in sharpening their analytical market skills.

To see other setups please visit: Technical SetUps.

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All content is provided as information only and should not be taken as investment or trading advice. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise. For further details please refer to the disclaimer.