Trading Set-ups
24 articles
Twenty-four named shapes, bullish and bearish, each with the price points that define it, where it completes, how often it follows through and what it looks like when it fails.
Foundations
Start here if the subject is new.The Trend Pullback Set-Up
The plainest continuation shape there is: an established uptrend, a dip into a rising reference that has already held twice, and a resumption from it.
The Rally Fade Set-Up
The bearish mirror of the trend pullback: a downtrend, a rally into a falling reference that has already capped it twice, and a resumption from there.
The Flat Base Set-Up
A ceiling price has been turned back from several times, a range that tightens underneath it, and the session that finally closes above it.
The Range Break Set-Up
A rectangle with both sides working — a floor and a ceiling each tested more than once — and the session that finally closes outside one of them.
The Rounding Bottom Set-Up
A decline that slows, flattens, and turns without ever making a dramatic low, over months rather than weeks — and the old high that ends it.
Intermediate
Assumes the foundations above.The Bull Flag Set-Up
A sharp advance, then a shallow drift against it, and a ceiling on that drift which is the one price the whole set-up is read from.
The Bear Flag Set-Up
A sharp decline, then a shallow drift back up against it, and a floor under that drift which is the one price the whole set-up is read from.
The Bull Pennant Set-Up
The same pause as a bull flag drawn as a triangle rather than a channel: the highs step down, the lows step up, and the range squeezes toward nothing.
The Bear Pennant Set-Up
A hard decline followed by a coil rather than a bounce: highs stepping down, lows stepping up, and a range that runs out of room.
The Gap-and-Go Set-Up
A stock opens well above the range it has been trading in and never trades back into it, with the first half-hour's range becoming the reference everything afterwards is read against.
The Gap-Down Continuation Set-Up
A stock opens well below its range on a repricing it cannot recover from, and the first half-hour's low becomes the reference the rest of the session is read against.
The Momentum Stair-Step Set-Up
An advance that moves in stages: a short run, a tight shelf that holds above the last one, another run, and a series of shelves that never gives one back.
The Ascending Triangle Set-Up
A flat ceiling with a rising floor underneath it: buyers arriving earlier at every dip while one price keeps capping the rallies.
The Descending Triangle Set-Up
A flat floor with a falling ceiling above it: sellers accepting less at every rally while one price keeps absorbing the declines.
The Cup and Handle Set-Up
A rounded decline and recovery back to a prior high, then a small drift below it, and a test of the level the whole structure is organised around.
The Double Bottom Set-Up
Two lows at roughly the same price with a rally between them, and the high of that rally as the level the reversal is confirmed at.
The Double Top Set-Up
Two highs at roughly the same price with a dip between them, and the low of that dip as the level the reversal is confirmed at.
The Rounding Top Set-Up
An advance that loses speed, flattens into a dome, and turns down over months — with the price the advance came from as the level that ends it.
The Three Rising Valleys Set-Up
Three successive lows, each higher than the last, under a ceiling formed by the rallies between them — a base that announces itself before the level goes.
Advanced
Detail, edge cases and methodology.The Inverted Cup and Handle Set-Up
A rounded top and decline back to a prior low, then a small drift above it, and a test of the level the structure is organised around.
The Volatility Squeeze Set-Up
A market whose range has contracted to the narrowest it has been in months, which says a large move is coming without saying anything at all about its direction.
The Inverse Head and Shoulders Set-Up
Three lows with the middle one deepest, two rallies between them forming a neckline, and the break of that neckline as the confirmation.
The Head and Shoulders Top Set-Up
Three highs with the middle one tallest, two dips between them forming a neckline, and the break of that neckline as the confirmation.
The Diamond Top Set-Up
A top that first broadens into wider and wider swings and then contracts back into a coil, leaving a diamond outline and a narrowing lower boundary that ends it.