Trading Setup

[00:00:06.05] - Speaker 1
Okay, so the next point is about speaking about setups. So let us remind ourselves. So the. The princip about timing, location and setup is there is. Is. Is always a reminding system so that we can say clearly what is have. Did I have now the right time to go into the market? Yes. No. No. Then don't go into the market. If you have now the right time to go into the market. Yes. Okay. This is the. This is the right location. No. Okay. Don't do it. And now we speak about the setup. And the setup. I can only say for myself, every trader is completely individually, everyone have a different trading style. And you must define for yourself what is your A plus setup. And this. This is why I'm so happy that I have Dean and Sean here. And let's begin with Sean. Sean, do you. Can you. Can you say the people. When we were speaking about setups, when we was talking one to one, what I was teaching you about the setups and how you was defined as for yourself.

[00:01:32.06] - Speaker 2
But I mentioned before, I look for the extremes. I'm looking for rejections, whether it be a rejection to the upside or rejection to the downside. So the setup is always going to be off of a high reaction zone, like call resistance or a GEX level, and seeing if it's rejecting or. Or continue or following through, as you mentioned before. So it's always about rejections and extremes. And as you can see on the chart that you're showing, I mean, it's. It's clear as day after. Like you always say, it's clear as day afterwards. So the setup has to be this. I've seen the setup before. Every setup you see is. It's been there before. So whether it's breaking a resistance zone or rejecting the resistance zone is key for me.

[00:02:24.29] - Speaker 1
Yeah, that's correct. That's correct. And you, Dean, how you define a setup, how I was teaching you setup and how you was defined this for you.

[00:02:38.12] - Speaker 3
Yeah. So it's pretty much like Sean says, you know, looking for the extremes, finding those reaction zones. And then once we see the setup, always ask, we go through what I call the TLS is always in my mind. Time and location. Setup. So timing. Yep. Setup, location. Yep. Setup is there. Boom. I'm going to jump into a trade. So I'm always looking for the setups where I see a strong rejection off a reaction zone. Where you see the candle come down.

[00:03:12.26] - Speaker 2
Boom.

[00:03:13.05] - Speaker 3
You get that hard wick rejection, Tom. And then I'll wait for a confirmation candle to let me know that, yes, this the Setup is there. The next candles formed, I jump in and I follow the trade up. If I don't see that hard rejection off of one of those reaction zones, then I'm going to wait because the setup might not be there yet. And so I'm just going to be a little bit more patient, wait for the timing and say, hey, this could be a fake out. Let me wait and see, you know, what's going to happen at this particular location. Because the setup is there where it's coming down. It's in the reaction zone. It's there. It's not in consolidation. It's definitely or it's coming out of consolidation for me. I think the biggest setup for me is when I'm watching a trade setup where I see a high area of consolidation and I'm just waiting. And especially if it's in a reaction zone, that to me, I sit up in my chair and I, you know, start really following price action intently because typically with CL we see a, you know, some consolidation going along where it's just like, okay, fake out, fake out, fake out.

[00:04:34.21] - Speaker 3
And then next thing you know, boom, you'll get, you'll get the reaction. And then. So, yep, I mean, it's clear as day. So, you know, my last trade of the day was pretty much coming out of the consolidation zone at the. At. At around 10:30ish, right around there where it sort of consolidated and then it came into a reaction zone. Setup was there. I jumped into the trade and just followed the whole thing down, which was, which was a lovely trade for the day. So setup is key. Have to be patient. Have to wait for that timing location where it's coming out of a high reaction zone and then you jump in small position. And then I add in to go all the way down.

[00:05:29.17] - Speaker 1
Yes. And I say also to you and, and to Sean, why we have the principe about the three questions about timing, location and setup. Do you remember, do you remind yourself why I was talking to you about this?

[00:05:51.07] - Speaker 2
Yeah. You have to have a process brightness.

[00:05:56.14] - Speaker 1
Yes.

[00:05:58.02] - Speaker 2
You focus on the process, you get to the results faster. Most people are focusing on the results and that's why the process is so slow. So you follow the process, you follow the key information and you, you plug it in and it's, it's like plug and play. You don't have to. I used to spend hours analyzing and analyzing, analyzing to analysis, to paralysis. This is giving me the freedom to actually make trades and be confident in the trades. Everything with the setup, the timing, the location builds your Confidence, it builds a process. And if you follow the process, you're going to get the results. You make it very, very simple. It's not easy. It's simple.

[00:06:44.19] - Speaker 1
Yes. And also it's, it's the risk manager in your mind. So if you, if you follow this concept and you ask you every freaking trade, is this the right time, is this the right location? Is this the right setup? And you can say three times, yes, boom, let's go into the trade. If you say only one time, no, then don't go into the trade.

[00:07:13.06] - Speaker 3
Right?

[00:07:13.13] - Speaker 1
And, and also if you journal your trades and you review your trades, then ask yourself in the review, was this the right time? Was this the right location? Was this the right setup? Why I was taking a loss? Did I miss something? And then write down what you missed so that you make less mistakes with it. But with the three simple questions, I will promise you, you can improve very strong.

[00:07:44.10] - Speaker 3
100%. And Pat, also with the setup, also look for that second confirmation, right? Because without that second confirmation, everything could be perfect. But if I don't have that second confirmation, I take my hand off the mouse and I don't set it up. So along with that, because, you know, Sean and I today, if you heard our call today, I don't like the time, I don't like the setup, I don't like this. And then when we saw it, it's like, oh, no. The second confirmation that we use wasn't signaling to us that it was time for us to jump into the trade. So you, you preach to us all the time, get that second confirmation, second or third confirmation. So, you know, by mapping everything out and getting everything in place beforehand with all the time, now that we're in the, you know, we have that, we answered the questions, you know, timing, location, setup, everything is just the, the trading has just become so much easier because there, the, the mental state, the emotional state, everything that most traders, all of us deal with, is, is basically much calmer because we have the answers before us and we can pull the trigger with high confidence and, you know, make, make a very good trade.

[00:09:08.15] - Speaker 1
Yeah. And the second confirmation, I can always repeat myself. Every trader as individual. Someone likes the order flow. Someone likes the weeks. Someone likes the golden cross. Fun from some SMAs. The other one likes more MACD. The other one likes more SI. There's no right. There's no wrong. The only thing is how you can prove if you be a good trader is are you consistently profitable? And are you consistently profitable and making less mistake than before? And if you, if you see some. Some improvements in your system, then you'll be right. And I can say again, ask the three questions, any freaking trade. What you take. Is this the right time to go into the market? Is this the right location? And then, boom, is this the right set up with a second confirmation? And if you get three S's, man, take it. If you get only one single, no, don't do it. And I think, Fabio, what do you think about the concept? I know we. We know us. We know us a few times. And I was saying all the time about timing, setup, and location.

[00:10:34.02] - Speaker 4
Yeah. And I think, I mean, the most important thing is that all you need is one good trade or a few good trades. Right? Because. Yes, for example, you trade futures, so the movement can be pretty big. And it's kind of like you always want to manage the risk. So you don't want to like over trade just because, for example, today we had a session where I have an hour a day, I need to do my trade. Right. That doesn't work because you feel the pressure of having to do it in what you are showing is really don't do it unless you actually have the three confirmation set of location. Right. So I think it's very important because all you need is really one good trade for the day, and then that could be it for you. So I think it's very relevant. And the way you simplify it, I think is very. It's very important.

[00:11:27.29] - Speaker 1
Yeah. And I came from the hedge fund business, and on a hedge fund world, there's. I don't know, is this in heightened wool? I don't know if this is a hide and wool, but if you have a win rate from 90%, 80%, 70%, or. Yeah, over 70%, they will say to you, you're making a wrong job. Because as Fabio was saying, your job as a trader is always to manage your risk. And in the hedge fund world, it's so important to make your losses very small. So cut your loses very far. Sometimes you have only a win rate for 30%, because if they be wrong, boom, they're getting out of the trade. But Bobby was always saying you need only. Only few times, but sometimes a very huge trade. And this is exactly the key from the institutional world, cutting the losers very, very fast. Let the lose is not going big, let's say only very, very tiny. And then once time in the month, every two weeks, you get the move where you really like, and then you ride the wave and making X amount of profits and all the small losses what you have before they are going and you end up the month or the quarter in the best case, with a huge profit and the investors will love you.

[00:13:07.29] - Speaker 4
And I think that's kind of also like why we developed Mentor Queue, because, you know, there's a lot of like hidden information in the option market that sometimes is only accessible by big institutions that have like tons of PhD people that are just studying the market, like building a data set that they can use in, in their strategies. So like being able to access this data on your chart, very simple and easy, will give you an extra level of confidence. Right. So the goal is really not to make you all the successful trade, but to help you actually manage the risk. Because if you take away the bad trades that you do, then suddenly the good ones are going to become more relevant and then you're going to have a better profit and risk reward ratio too.

[00:13:58.19] - Speaker 1
Yeah. And always remind yourself what you have if you be on Mentor Q. So first you have the gamma levels, of course. Second, you have the blind spots. The blind spots are something what not everyone have, but this is a nice tool. And if we take on the indicator again and take out the drawings, what was by the way, from the 6am Morning club, you see here, the blind spots. Boom. It's nice, nice, nice, nice. So it's respected from the market, we have the blind spots. So and the blind spots are helping us to find good, good areas with high correlation. So and, and for this reason you get now as a retail trader, some tool, what maybe the institutional use, but they call it different. Maybe let's talk about, they call it dark pool. And all the people in the, in the freaking worlds are going crazy. What is the dark blue? I need the dark pool. Hey man, relax. You have two blind spots. You don't need the dark ones. You have blind spots. It's crazy. Look how the blind spots are rocking. You don't need it, trust me. And then the last part.

[00:15:18.13] - Speaker 1
And also we have the swing trading models. We have the five day, we have the 20 day, and they're giving us really good information. We have the lower band, we have the risk trigger and we have the upper band. They're giving us really good information. But Fabio, let's say only two minutes about something about this, how they can help us. Maybe if you be a swing trader or a day trader, they're giving us also information, they're giving us price levels and we should learn how to use it. Correct? Yeah.

[00:15:53.23] - Speaker 4
And tomorrow we're going to go into details. So we, we have Another live session on it. But essentially, like besides the levels, we have advanced models that can also support your theory. So we have the skew, we have the swing trading model, right? So the goal is really to confirm the direction of the, of the trend. One thing, understand what the market is doing. So the option market is really a sentiment indicator on how players are positioning their bats, right? So if, if people are started to buying a lot of puts on Nvidia, that means that somebody knows something could happen or somebody is worried about a potential downturn. So they're like hedging and they're buying puts, right? So knowing that information in a simple chart can allow you to understand, okay, like I don't have access to the option data, I don't know how to read the option data. But the skew is telling me that the puts are becoming more expensive and therefore there's a lot of people buying puts. So that can give you a very quick and easy signal that can tell you, okay, maybe if I'm going long this stock, maybe I'm not in the right direction.

[00:17:04.04] - Speaker 4
So maybe I want to reassess my position and maybe I want to use the levels, maybe the swing trading levels, the 20 day levels to then see, okay, what is my risk, what is my reward? And again, timing, setup, location, you know, same principle.

[00:17:21.01] - Speaker 1
Yeah, I hope this was a really good lesson for you. This will be an online course, so, so we will cut this in small lessons so that you can go and choose every, every step what is important about the corporate, see, timing, location and setup. And I, I have to say something, I have to shut out something and I like it so much. Thank you for your support, Sean. And thank you for your support, Dean, that you was showing up, that you was sharing also your insights. Not with me, with the community. And yeah, I highly appreciate this. Thank you. Thank you my friends.

[00:18:03.11] - Speaker 3
No, I, Patrick, you know, every time, every time we have a session, you know what I say because you know, this, this has really transformed my trading. Like I said, this has really been something that has helped me tremendously. The levels, the mentor Q levels, the Gamma levels, the blind spots have really just made trading enjoyable and fun again. And so I, I thank you and I, and I thank you Fabio, for starting the mentor Q levels because they, they're just spot on. Absolutely wonderful.

[00:18:41.11] - Speaker 4
Thank you, Dean. Really appreciate the feedback.

[00:18:44.14] - Speaker 1
Yep.

[00:18:45.03] - Speaker 2
You know, gentlemen, all I can say is you've made it simple and that makes it fun. It's just amazing how easy it is once you explain it. And it's really Like Dean says, it's changed my perspective on everything. And I want to thank you both, first and foremost, Fabio, for getting mental Q up and running and, and then introducing us to Patrick, which is tremendous. He's a tremendous asset. And I look to. I look to him for lots of advice on trading, and he's always spot on, always points me in the right direction. So thank you both very much.

[00:19:19.26] - Speaker 4
Yeah, thank you, Sean. And, and I think what you said is actually right, because the biggest mistake that trader make is that sometimes they make it too complicated or they have too many indicators in one single chart. Right. So if you have too much, you can't really focus on what's relevant. So, like, what we try to do here is really, like, simplified. It can be more simple than lines on a chart, but the lines on the chart actually have a very important meaning, which is really everything that goes into the option market. So I think the way Patrick simplifies this concept, I think is very key. And I think he's been really great at helping us, like, you know, show this principle, which is really like, you don't need too many tools, you need the good ones, and you need to simplify it and just wait for it. You know, don't. Don't go, you know, wait for the market to come to you. Don't go to chase the market, because that's another mistake that you can make.

[00:20:20.03] - Speaker 1
Yeah. And only the people who know me most of the time, where I hang around a little bit longer, they know exactly. I have only a little, tiny, powerful laptop, I call it ATM machine. And, and I have only one desk, so one monitor. So. And that's it. So why I have only one monitor? People ask me, hey, Petty, you are crazy. How, how you can make so much money and you have only one monitor. And, and one of the biggest lesson, what I was learning in the beginning of my trading career is put out everything what can make noises. Put out everything from your shot, put out everything from your desk and ask yourself, do, do you really need this information? Let's. Let's think about if you have three monitors, four monitors, five monitors, six monitor, and you're looking from one monitor to other monitor, many eyes going from right to left, from left to right, from bottom to the top, but you're not focusing on the shot where the price action is. And then you miss maybe a one good trade. And this is something what I was learning. I will not miss the price action.

[00:21:41.16] - Speaker 1
I will not miss the one good trade. I will focus only on my chart. And this is why I came on the idea about the blind spots to don't have also not too many levels on the chart to make it as simple as possible at clean as possible. And I think this is only this is something what is also key. Keep it simple, keep it clean and reduce all the crazy noises around you.