The Trade Setup Framework
Turning Raw Ideas into Real Trades
Every trader has those moments of intuition – “This looks weak” or “That could break higher.” The difference between a professional and an impulsive trader lies in what happens next. A pro turns instinct into structure. This is the essence of the Trade Setup Framework: transforming gut feel into a repeatable, rule-based process.
From Instinct to Structure
It starts with a simple flow:
Thesis: Your initial thought or bias — “Feels like it’s going higher.”
Hypothesis: What needs to happen to prove that idea — “If X occurs, Y is likely.”
Setup: The trade plan — entry, stop, and target defined in advance.
Without these steps, your trade isn’t structured — it’s just a guess with a stop-loss attached.
The Four Building Blocks
Every solid setup rests on four pillars:
Context: The backdrop — volatility, catalyst, time of day, market rhythm. Context tells you when to play and when to stay flat.
Filter: The preconditions that must occur before entry — for example, holding above a key level or rejecting a fake breakout.
Trigger: The specific moment that validates the setup — a break, a hold, or a confirmed reversal.
Management: How you size, stop, and exit the trade. This includes scaling in/out and adapting targets to market terrain.
This framework stops you from reacting on impulse and gives you the clarity to execute with intent.
Final Thoughts
Your instincts are valuable — they’re often built on years of pattern recognition. But instinct without structure is noise.
By applying Context → Filter → Trigger → Management, you create a repeatable decision-making loop that brings confidence, consistency, and control to your trading.
Clarity builds conviction — and conviction builds better trades.