Do More with Less: Focus on a Single Trading Setup w/ John471

If you have listened to many Group Mentoring Sessions, Ask Me Anything Sessions, or perhaps some of the public webinars, you may have heard the advice from FT, other Mavens, or myself to focus on a single trading setup for certain traders. This advice or protocol can be useful in certain situations, and today I want to talk about those situations and the potential benefits and drawbacks to focusing on a single setup.

First, what situations may a trader find themselves in where it may be advantageous to focus on a single trading setup? Overall, a problem I see with many new or journeyman traders is the temptation or inclination to do too much, and especially to over-optimize their system or edge to every market environment or situation. I believe this is inherently flawed. 

This may compel a trader to set unrealistic expectations to be constantly trading and profitable, and that is just not how it works.   

Trading well is about filtering the randomness of current market action into categories of action that you have pre-planned for. In focusing on only one setup, this is much more centralized and attainable. The trader will begin to understand that most of the time they will be waiting, and getting used to this is very valuable. 

When seeking out just one setup, a trader is less inclined to “make something out of nothing” in terms of market action. Traders have one signal, it either appears or it doesn’t. The number of potential errors is smaller, and therefore easier to deal with, identify, and correct. This also serves to make the full process of trading seem more manageable and repeatable. 

A key benefit for me personally was learning that even the best setups only work sometimes. To take advantage of those times, you must accept that some attempts will end in failure. You simply cannot have one without the other. Focusing on a single trading setup and getting those same trials repeatedly emphasizes this. Seeing the conditions and executing becomes normal, and it also becomes normal to just realize some of them don’t work. Then, the real jewel of understanding that emerges is that the stops are not something to avoid; they are the cost of admission

A final, but key benefit if you focus on a single trading setup is simply that you really clarify what that setup is, and you know it inside and out. I have come to realize that many traders, even fairly experienced traders do not do a great job at defining their setups. This can mute progress even for those with a lot of general knowledge. All that general trading knowledge does you no good if in the heat of the moment you are not sure if what you’re looking at is “a setup”. 

So, what are some drawbacks to focusing on one setup? To be honest, the key drawback is boredom. Traders feel they aren’t doing enough and become impatient for faster progress. This mindset should be addressed by anyone planning to trade. If you are not already profitable or consistent, then what is the rush? Things should happen slower and more deliberately, otherwise you’re just losing money more quickly.  

It is important to recognize, however, that if this protocol is followed correctly, you will inevitably have many sessions where you do not execute at all, and this can be difficult to handle for anyone. In my opinion, you must sit through this until you feel confident that your executions on this one singular setup are consistent and show its edge. When this point is reached, the next step may be adding a second setup, or potentially adding a second product with only one setup. 

Overall, I feel that if you focus on a single trading setup, it can be an extremely valuable protocol for new traders looking to build a system or edge, but also for more experienced traders that are looking to reground themselves with the basics of what they do well. It can also be beneficial for those with discipline or error issues that need clear guardrails to their risk taking.

If you feel you may be in one of those categories, I urge you to consider this approach. If there are further questions, feel free to ask in chat and tag me. 

– @John471, CT Maven


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