Concepts trait

Setup odds: what happened the last time

How Breakaway computes setup odds from each stock's own five-year history, and how to use them without fooling yourself.

What it is

Every card shows a line like "7+ has been up 10 days later 68% of 88, avg +3.4%". Here is what it means. The last 88 times this stock's score first reached 7 or more, it was higher ten trading days later 68 percent of the time. The average gain was 3.4 percent. That is the stock's own track record for the setup in front of you.

How it is computed

The scanner rebuilds each stock's daily score across five years of history. It marks every day the score first crossed a level, from 7 up to 11. For each level it records how often the stock was higher 5, 10 and 20 trading days later. It also records the average and median return, and the best and worst point along the way. The ticker page shows the full table and the most recent cases. The whole thing is rebuilt every night.

How to use it

The odds are past behavior, and past behavior is not a prediction. They say what this stock did the last several times it reached this level. They say nothing about what it does this time. A setup that was up six times in ten can still fail on the seventh, and a small sample can be luck. Compare the odds with the column on the ticker page for all stocks. That column shows how often any stock was up over the same period. A setup only means something when it beats that. Fewer than a dozen past cases is a story rather than evidence, and the page says so.

The best use is choosing between two setups that look alike on the chart. Prefer the one whose own history says it followed through. That is a way of ranking two candidates. It is not a recommendation to trade either one.

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