At SMB we distinguish from good, very good, and great set ups.  Or we make A, B, and C trades.  We use this to determine how much risk we are willing to take on a trade.  An A trade receives risk the equivalent of 33 percent of our intraday stop loss, a B trade less, a C trade even less.

Today Rosie, one of our developing traders, bought LMT above an important technical resistance level, 80.  She started a position equivalent to a B trade.  She was waiting for more confirmation above 80.30 on the tape for this set up to be an A trade for her.  LMT had not traded above 80 for 6 months.  This was a level she was watching for quite some time. But the volume was thin, she did not see a big buy order enter the market.  So she just held her B trade.

The market started an uptrend after 10AM.  SPY resistance was not till 115, or much higher levels.  So we had a very strong intraday market without resistance till 115.

Rosie grabbed me after an end-of-the-day SMB meeting and asked me whether she should have traded this set up with more size.  Can an important technical level trigger an A trade for you?  Or do you need confirmation above this important level to make this an A trade?  What would you have done with LMT above 80?  Full size for an A trade?  Or would you have waited for confirmation on the tape, or with price above 80.30?

Best of luck with your trading.