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Coach's Playbook Posted by Team Topstep January 29, 2020

High Probability Trade Setups - The Coach's Playbook

Before we get started here, the sound came out a little grainy in the video. We found what the issue was and it has been addressed. Since we streamed it LIVE, we felt it best practice to give you the raw take. So, enjoy, and leave your feedback in the comments section!


Trade Your Way

Day trading is about going with the flow, picking out patterns, reacting to what the market is doing and trying to profit from it. Every trader is unique in their own way, and for the most part, they all approach the markets differently. Whether it be a trade setup, risk parameters, or simply what time of day they want to trade, no two traders are exactly alike. 

Today we are talking about trade setups. There’s no substitute for having a good arsenal of dependable setups at your disposal. Market conditions are constantly changing. Volatility can shift from low to high in the blink of an eye, and most of the time without warning. It’s important to have enough trade setups to keep you in the game no matter what the environment is. After all, the only way to make money in the markets is to be “IN” the market.

Setups Vary Based On Environment

Types of trade setups can range from technical analysis, to tape reading, to stop hunting and order flow. Having a good feel for the market you’re trading should have a large influence on the types of trades you’re putting on.

Fades and Breakouts are two of the oldest day trading setups we have. However, in recent years, new developments in how to read and understand order flow have rendered some of the more traditional setups somewhat obsolete. Staying on top of advancements in trading technology will only help to broaden your scope of market awareness and open you up to discover more modern trade setups. 

The Coach’s Setups

In this week’s Coach’s Playbook video, Jack, Dan and HOAG share the high probability trade setups they have relied on throughout their careers. Check out the links for each setup to learn more about them.

Dan – Settlement Price 

  • How markets react to settlement price.
  • What will get the market to return to settlement price?
  • Settlement price is a great accelerator or springboard for price action.

HOAG – Opening Range Trade

  • First minute of regular trading hours.
  • Tendency to remain the extreme of the daily range (high or low for the day).
  • Offers low risk opportunity with extended profit target.

Jack – Mortgage Convexity Hedging

  • Comes when yield is making fresh highs or lows.
  • Fixed income portfolios hedge interest rates by trading bond futures.
  • Trade will accelerate near new highs and lows.

Remember, there is no right or wrong answer when it comes to picking the right setup, and no trade is going to work every single time. The key is to be able to control risk and profit in all kinds of market conditions.

Trade Well!