How to read your signal
A simple guide to understanding what SetupVerdict tells you — even if you're new to trading.
Step 1
Look at the Verdict first
The big word in the center is the most important thing on the screen. Everything else explains why. Verdicts are calculated on the last closed candle, so they only change when a new candle closes.
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LONG
Conditions are aligned for a buy. The engine sees a bullish trend with momentum and a good entry point. You can consider opening a long position.
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SHORT
A bearish setup: downtrend, momentum and location all line up. On Binance Spot you cannot open a short — there it means “don’t buy now” (or consider reducing a coin you already hold). Acting on it as a trade needs margin or futures, which adds funding costs and liquidation risk; not recommended for beginners.
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EARLY LONG / EARLY SHORT
Trend, location, strength and risk all pass, but momentum is split — it is not confirming yet. Higher risk: use a smaller size, or wait for a LONG/SHORT.
⏳
WAIT
A direction exists but this is not a safe entry: price is too far from VWAP, the next support/resistance is too close for a 1.5:1 trade, or momentum points the other way. Levels shown are reference only.
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NO TRADE
The long-term trend and Supertrend disagree, or ADX is below 20 (choppy market). No levels are shown. Stay on the sidelines.
Step 2
Check the Setup Score
The setup score (0–100) shows how many conditions line up. It is not a probability of winning — a score of 80 does not mean an 80% chance of profit. It helps you compare setups. Also keep in mind that the 10 indicators are not 10 independent votes — several of them follow the same trend. That is why the engine groups them into 5 questions, and why a failed check always wins over a high score.
| Score |
Grade |
Verdict |
What to do |
| 0 – 30 |
C |
NO TRADE |
Do nothing. Market is choppy, no reliable signal. |
| 31 – 55 |
B |
WAIT |
Be patient. Direction exists but entry timing is off. Wait for better conditions. |
| 56 – 75 |
B |
EARLY LONG / SHORT |
Acceptable setup. Consider a smaller position size. |
| 76 – 99 |
A / A+ |
LONG / SHORT |
Strong setup. All checks pass plus extras (good location, strong trend, 2:1 or better). Still not a guarantee. |
Step 3
Use the Entry, Stop Loss and Take Profit
These three numbers tell you where to enter, where to exit if you're wrong (Stop Loss), and where to exit if you're right (Take Profit).
Illustrative example — DOGEUSDT 4H
SHORT setup · Setup score 78 · Grade A
Entry
0.07004 — the short entry (margin/futures only; on Spot: don’t buy)
Stop Loss
0.07179 — if price goes UP to here, you exit and accept the loss
Take Profit
0.06654 — if price goes DOWN to here, you exit and take the profit
R:R Ratio
2.00:1 — the planned reward is twice the planned risk (before fees). It says nothing about the chance of winning.
Same chart, different moment: if price had already fallen more than 2.2× ATR below VWAP, the verdict would be WAIT instead of SHORT — the engine waits for a pullback toward VWAP rather than selling right before a bounce. On WAIT, levels are labelled "Ref." because they are not an active setup.
Step 4
Understand the 5 layers
The engine checks 5 questions in a fixed order. Direction or Trend Strength fails → NO TRADE. Location, Risk, or momentum against the trend → WAIT. Momentum only split → EARLY. Everything passes → LONG / SHORT. A high score can never override a failed check.
1
Direction
Which way is the market moving?
Looks at the big picture trend. Bullish = market trending up. Bearish = market trending down. Neutral = no clear direction → NO TRADE.
EMA 50/200Supertrend
2
Momentum
Who has the advantage right now?
Buyers or sellers dominating short-term? Majority of 3 indicators. Against the trend → WAIT. Split → EARLY. With the trend → LONG / SHORT.
EMA 9/21RSIMACD
3
Location
Is this a good entry point?
Is price near fair value or has it moved too far already? VWAP resets weekly on 4H and monthly on 1D. More than 2.2× ATR from VWAP → WAIT, regardless of direction.
VWAPBollinger Bands
4
Trend Strength
Is the move strong enough to trade?
ADX measures trend power, not direction. Below 20 = choppy market → NO TRADE. Above 25 = strong trend.
ADX
5
Risk
Is the reward worth the risk?
Stop Loss goes just beyond the recent swing (between 0.5× and 3× ATR). The nearest pivot level — from the previous week (4H) or month (1D) — must leave at least 1.5× the risk, otherwise → WAIT. Take Profit sits at that level, capped at 3:1. If the Stop Loss would be closer than 1% to the entry, the engine says WAIT — fees would eat too much of the trade.
ATRPivot Points
Timeframes
Which timeframe should I use?
The timeframe changes how long you hold a position and how often you get signals. Shorter = faster, noisier, and fees take a bigger share of each trade. Longer = slower, fewer signals, less noise.
Why no 1 hour?
Removed on purpose
On 1H the Stop Loss is usually very close to the entry, so the trading fees (about 0.2% for a round trip) eat a large part of every trade. For Bitcoin, the fees take about half of your risk on 1H, about a fifth on 4H and about 5% on 1D. In our tests on real Binance data, 1H setups lost money after fees with every rule variant — so SetupVerdict analyzes 4H and 1D only.
See the numbers.
4 hours
Default
Hold positions for several days. Fewer setups, larger moves, less noise.
1 day
Long term
Hold positions for weeks. Very few signals. Best for investors who check the market once a day and want to catch major trends.
Golden Rules
Always remember
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Always use the Stop Loss. Never enter a trade without knowing where you exit if you're wrong. The Stop Loss is calculated for you — use it.
📏
Never risk more than you can afford to lose. A common rule: the loss if your Stop Loss is hit should be no more than 1–2% of your total capital. Fees and slippage can make real losses larger.
⏳
WAIT is not a failure. The best traders do nothing most of the time. Waiting for the right setup is a skill, not a weakness.
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Check multiple timeframes. If 4H says LONG and 1D says WAIT, be cautious. The strongest signals appear when multiple timeframes agree.
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SetupVerdict is a tool, not a guarantee. Use it as one input in your decision. Always do your own research before trading.
Ready to analyze?
Open the tool and apply what you've learned. Start with 4H on BTC/USDT — or let the Pro scanner find the pairs with a setup.
Want to go deeper? Read the free lessons on risk, position sizing and trading psychology in The Edge Lab →
⚠ SetupVerdict is an educational technical-analysis tool. Nothing on this platform is financial advice or a guarantee of any result. Examples are illustrative. Always do your own research and never risk more than you can afford to lose.