Frequently Asked Questions
What is the Five Star Setup?
The Five Star setup is a technically based, directional trading system. It combines simple technical analysis, along with more complex forms of analysis that come from Fibonacci, along with momentum breakouts. She also adds a fundamental/macro view, that’ll elevate a typical Four Star setup to a Five Star. It’s a combination of high probability setups in one, that thus creates the master setup.
How did Danielle come up with the Five Star Setup?
When Danielle was studying from each of her mentors, she noticed that each one had their own favorite setups. Examples of these can be seen in Carolyn Boroden’s ‘Royal Setup,’ and John Carter’s ‘Stack Trade’ and ‘Triple Squeeze.’ She took five different pieces from each of her mentor’s favorite strategies, mixed them up, and then paired them together to look for the master setup.
Why does this work?
Trading is all about recognizing high probability moments in time and executing against those patterns. While no setup is 100%, as traders, we always work to put the odds in our favor. A tried and tested strategy, Danielle has determined that going with the tide is the best way to make consistent profits in the options market. This setup is all about going with the tide.
How does Danielle identify Five Star Setups?
Danielle starts with a top-down analysis process, beginning with indexes and sectors, which leads her to select her favorite ‘baskets’ in which to trade. After she picks her favorite baskets, she then selects specific stocks within those baskets. This research process ends when she decides which tickers to trade. Though she typically chooses those in the options market, she trades options on ETFs, ETFs and stocks as well).
How do I find a new Five Star Chart?
Danielle generally comes across a new Five Star Chart while completely her overall market and sector analysis. Traders looking for new ones should check the rules of the Five Star Setup, to see if the chart qualifies. When she finds a new one, she keeps it on her rotating list, waiting for a setup to occur.
How do I trade a Five Star Setup?
Trading ideas for this setup and others are shared in Simpler Foundation, the Simpler Options trading room, as well as in classes that she teaches. She generally trades them with long calls, debit spreads, put credit spreads, or butterflies. She also uses buy and hold stock strategies.
How do I know if a setup no longer fits the Five Star Chart criteria?
If it breaks the 50 SMA on the daily chart, Danielle takes it off the list.
How can I learn the Five Star Setup?
Learning the Five Star Setup is all about learning patterns, recognizing the importance of sector weighting, and trends. This is the core of everything Danielle does. You’ll find mentions of this setup, and likely specific trades she is in, in this E-Letter.
She talks about these trades in the Simpler Options trading room, publicizing trades both there and in her membership, Simpler Foundation. She also teaches her analysis method to students in her classes that come up a few times per year.
Who are Danielle’s Mentors?
Danielle started her trading career after a career in teaching and has been trained as a retail trader. Her father is the one who changed her life by getting her interested in trading options at the ripe age of 24.
He introduced her to Simpler Options, where she began studying the work of John Carter and Henry Gambell. Soon after, she discovered Fibonacci through Carolyn Boroden. She then started implementing macro and futures strategies she learned from Neil Yeagar and Raghee Horner. Danielle absolutely loves David Starr’s work as well as his trading tools he’s created, such as the Voodoo Lines and Ready, Aim Fire.
Outside of Simpler, Danielle especially admires the work of Marc Chaikin of Chaikin Analytics, Ophir Gottlieb from CML Viz, and Jim Cramer.
Who is Danielle Shay?
Danielle Shay is a market analyst, expert commentator, and trader. She’s the Director of Options at Simpler Trading. She’s a strict technical analyst, with a strong emphasis in Fibonacci Analysis. Her primary focus is on trend-following, directional strategies via options trading, though she covers stocks and ETFs as well. She focuses on short-term setups, with a directional bias.
Danielle is a contributor in John Carter’s 3rd Edition of Mastering the Trade, and has been seen on Fox News, Real Vision TV, RT America, Benzinga, StockCharts.com and more.
Want to walk the path to trading success together? Join Danielle’s “Five Star Trader” E-Letter for market insights, tips, tricks, and special bonuses.Sign Up Now
December 11, 2019
"Fast Money" on CNBC
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