Setup Grading

Setup grading helps you decide how much confidence and size a trade deserves. An A setup has strong context, clean location, clear trigger, defined invalidation, and enough reward. A B setup may have most pieces but one weakness. A C setup is often a forced trade.

Grades should be written before you need them. Define the criteria for each strategy in your playbook. If you grade trades only after seeing the result, the grade becomes emotional and loses value.

Use grades to control risk. A-grade trades may qualify for normal size. B trades may use reduced size. C trades should often be skipped. This keeps your capital focused on the conditions that actually match your edge.