"Only take A+ setups." You hear it in every trading video. It sounds wise. Nobody tells you what an A+ setup is, or how you would know.
Here is a way to make the grade mean something.
What does A+ mean?
It is a school grade used for trades. An A+ setup is one where every confluence on your list is present and clear. Nothing is borderline. Nothing is forced. If you showed it to another trader who uses your rules, they would agree right away.
A B setup has most of them, but one is weaker or unclear. A C setup is missing something you normally want.
The grade describes how well the trade matched your plan before you entered. It says nothing about whether the trade won.
Why do people grade trades?
Because not all trades that follow your rules look equally clean. Grading lets you test an idea that most traders believe: that the cleanest trades do best.
If that is true for you, you can take fewer, better trades, or risk a bit more on the cleanest ones. If it is false, you learn that your sense of "clean" adds nothing, and you can stop trusting it.
How do you grade honestly?
Write down what A+ means for you. List what has to be there. For example, the bigger chart moves your way and price is at a level you marked earlier. Your entry signal is fully formed, and the target is at least twice your risk. All present and clear means A+. One weak item means B. One missing means C.
Grade before the result. Give the grade at entry, or right after, before you know how the trade ends. This is the part that matters most.
If you grade after the trade, the result leaks in. A winner starts to look cleaner than it was. A loser starts to look messy. Then of course your A+ trades show great results: you gave the A+ to the winners. How many trades you need before you can trust a setup mentions this trap.
Use the same criteria every time. If the meaning of A+ shifts with your mood, the grades cannot be compared.
How do you check whether your grades mean anything?
After a few dozen graded trades, put them into piles by grade. Compare the average result per trade in each pile, ideally in R. R is your result in units of risk. A win of twice what you risked is two R.
Say your A+ pile clearly did better than your B and C piles, over a decent number of trades. Then your grading is picking up something real. If the piles look the same, the grade is telling you nothing yet. Maybe the criteria need to change. Maybe the thing you call "clean" does not matter for your setup.
Watch the size of each pile. If you have forty B trades and six A+ trades, the A+ pile is too small to judge. Keep logging.
What does it look like in a real journal?
Tom is the trader in EdgeFlow's demo. His example journal averages +0.02R per trade, around break-even. The demo then picks the combination of his confluences that went together on his best trades. The 63 trades with that combination average +0.53R.
That combination is Tom's A+ setup, found by counting instead of by feel. This is example data, and it describes Tom only.
Should you only take A+ setups?
Only if your trades say so. Two reasons.
They may be rare. If A+ setups come along twice a month, trading only those means very few trades, and a long wait before you learn anything.
B setups may also work. Your journal may show that B trades do almost as well. Then skipping them means leaving money on the table.
Let the comparison decide. Some traders find their A+ trades are far better and drop the rest. Some find little difference and keep taking the B trades at the same size. Do more confluences mean a higher win rate? looks at a similar question: whether more items on your list mean better trades.
Questions people also ask
What makes a setup A+?
Every item on your own written list is present and clear, with nothing forced. The exact items depend on how you trade.
Should I risk more on A+ setups?
Only if your own record shows they do clearly better over enough trades. Until then, the same risk keeps your results easy to compare.
Is grading trades after they close useful?
For learning, a note afterwards is fine. For testing whether your grade predicts anything, the grade has to be given before the result is known.
How many grades should I use?
Three is plenty: A+, B and C. More grades split your trades into piles that are too small to compare.
Read next:
In EdgeFlow you tick the confluences you saw on each trade before entering. It then shows how trades with each combination did, with the number of trades behind each. If your journal ends near zero and you cannot say which trades carry it, read stuck at break-even.