The Setup Grade is a letter rating from A to D that summarizes the overall quality of the current trading setup. It combines multiple factors including market state, risk flags, trend strength, and volatility into a single easy-to-understand indicator.
What Each Grade Means
Grades represent the probability of a successful trade based on current market conditions:
- Grade A (Excellent): Strong trend, low risk, favorable conditions. These setups have the highest probability of success.
- Grade B (Good): Decent setup with some minor concerns. Generally tradeable with proper risk management.
- Grade C (Caution): Mixed signals or moderate risk flags. Consider reduced position size or waiting for better conditions.
- Grade D (Poor): High risk, choppy conditions, or multiple warning flags. Best to avoid or use minimal size.
How Grades Are Calculated
The grade is calculated by combining several factors:
- Market State: Trending markets score higher than choppy ones
- Risk Flags: Each active risk flag reduces the grade
- Trend Strength: Stronger directional moves improve the grade
- Volatility: Extreme volatility can lower the grade
- Confluence: Multiple timeframe alignment improves scores
Using Grades in Your Trading
Here's how to incorporate grades into your trading decisions:
- A/B Grades: Consider taking the trade with normal or increased position size
- C Grade: Trade with caution, reduce size, or wait for improvement
- D Grade: Avoid trading or use minimal size for learning purposes
- Use grades as one factor among many—they're decision support, not trading signals
💡 Pro Tips
- •A grade isn't a guarantee—always use proper risk management
- •Grades can change quickly as market conditions shift
- •Higher grades on higher timeframes are generally more reliable
- •Combine grades with your own analysis for best results
