Trade Setup Grader: Score a Setup Before Entry

What a trade setup grader is for

The decision to take a trade is made in the worst possible conditions: quickly, with money at stake, on a chart you have already spent twenty minutes convincing yourself about. A grader is a defence against that. It asks the same questions in the same order every time and writes down an answer you can review later, which is the difference between a process you can improve and a run of outcomes you can only regret.

It is not a prediction. Nothing in the rules below knows whether the trade will work. The grade describes how complete and how disciplined the plan is, and a well-built plan can still lose.

The rules table

Five rules, 10 points. Every point on your result comes from this table, so you can reproduce the grade with a pen.

Rule	Points	How they are earned	Why it is in the table
Reward to risk (R multiple)	3	3 points at 2R or more, 2 points from 1.5R, 1 point from 1R, 0 below 1R.Scoring zero here caps the grade at C.	R is the target distance divided by the invalidation distance. Below 1R you need to be right more than half the time just to stand still.
Structural invalidation	2	2 points when the invalidation sits at a structural level, 0 when it is an arbitrary distance.Scoring zero here caps the grade at C.	A level chosen because it is convenient tells you nothing when price reaches it. A structural level ends the idea.
Higher timeframe alignment	2	2 points with the higher timeframe trend, 0 against it.	Counter-trend setups can work, but they carry a lower base rate, so they should not score the same as a continuation.
Scheduled event risk	1	1 point when no scheduled release lands before the target, 0 when one does.	A data release can move price through both your invalidation and your target regardless of the chart read.
Size derived from the stop	2	2 points when position size came from the invalidation distance, 0 when the size was chosen first.Scoring zero here caps the grade at B.	Choosing size first and fitting the stop around it is how a planned loss becomes an unplanned one.

Score bands

A: 9 points or more. Every rule is satisfied or close to it. The plan is complete and sized.
B: 7 points or more. Sound, with one weak rule. Worth noting which one before you commit.
C: 5 points or more. Two or more rules are weak. The plan has a gap you can name.
D: 0 points or more. The plan is mostly missing. Nothing here is sized or invalidated properly.

The caps matter more than the bands. A setup can collect eight points and still grade C, because an invalidation that was picked as a round distance rather than read off the chart makes the other numbers meaningless. Likewise, a size chosen before the stop caps the grade at B no matter how good the ratio looks.

How to use this grader

Choose direction. Select long or short so the tool checks your invalidation and target are on the correct sides of the entry.
Enter your three prices. Entry, the invalidation price where the idea is wrong, and the target you are actually trading to.
Add your account size and risk percent. Optional. They turn the R multiple into a currency risk and a position size in units.
Answer the four checklist questions. Whether the invalidation is structural, whether the setup runs with the higher timeframe, whether a scheduled event lands before the target, and whether the size came from the stop distance.
Read the grade and the reasons. The tool shows the letter, the points, and a line per rule explaining what each one awarded and why.

A worked example

Long at $100, invalidation at $95 under the last higher low, target $115 at the previous swing high, on a $10,000 account risking 1%:

Risk per unit = $100 − $95 = $5, reward per unit = $115 − $100 = $15
R multiple = $15 ÷ $5 = 3R, which earns the full 3 points
Risk on the trade = $10,000 × 1% = $100, position size = $100 ÷ $5 = 20 units
Structural invalidation, with the higher timeframe, no event due, size from the stop: 7 more points
Total 10 / 10, no caps triggered: grade A

Now move the invalidation to $98 because the tighter stop makes the ratio look better. R rises to 5, but the level is no longer structural, the cap applies, and the grade falls to C. That is the whole point of the table: it prices the shortcut that a bare risk/reward number rewards.

What the grade cannot see

It scores what you typed and nothing else. It does not know whether the target is a level price has reached before or a round number you would like, how much open risk you already carry, that this would be your fifth trade of the morning, or whether the higher timeframe you did not check disagrees. Two of the checklist answers are honesty questions, and a grader that you answer generously is a grader that tells you what you wanted to hear.

It also ignores costs. Spread, commission and slippage all come out of the reward side and hurt most on tight stops, so a marginal 1.1R setup is thinner in practice than it looks on screen.

Frequently asked questions

What is a trade setup grader?

A trade setup grader is a checklist that turns a setup into a score. You enter your entry, invalidation and target prices, answer a short list of yes or no questions about how the plan was built, and the tool applies a fixed rules table to produce a letter grade from A to D. The value is consistency: the same setup always gets the same grade, whatever mood you are in.

How is the grade calculated?

Five rules award 10 points in total: reward to risk (3), a structural invalidation (2), higher timeframe alignment (2), no scheduled event before the target (1), and a position size derived from the stop (2). Nine points or more is an A, seven is a B, five is a C, below five is a D. Three of the rules also cap the grade when they score zero, so a setup cannot reach an A on volume of points alone.

What is a good R multiple for a trade setup?

R is the distance from entry to target divided by the distance from entry to invalidation. At 2R you need to be right about a third of the time to break even before costs, at 1R you need more than half. The grader awards full points from 2R and no points below 1R, but the honest test is whether price has actually reached that target level before.

Why does the invalidation level matter so much to the grade?

Because every other number depends on it. Risk per unit is the entry to invalidation distance, position size is your risk budget divided by that distance, and the R multiple is measured against it. An invalidation picked because it was a convenient distance away makes all three numbers arbitrary, which is why that rule caps the grade at C when it fails.

Is this trade setup grader free?

Yes. It is a free tool, it runs entirely in your browser, there is no signup, and nothing you type is sent to a server. There is no AI model behind it either: the grade comes from the published rules table on this page, so you can reproduce it by hand.

Related tools and guides

How to grade a trade setup: the six criteria this tool is built from, with the reasoning behind each one.
Invalidation level explained: how to set the level the whole grade depends on, from structure, volatility or time.
Risk/reward calculator: the ratio and the breakeven win rate on their own, without the checklist.
Position size calculator: the exact number of units for a given risk budget and stop distance.
The risk per trade rule: how to set the percentage the position size is derived from.

Educational only. Not financial advice. NFA. Bullynx is not a registered investment adviser or broker-dealer. Trading and investing involve significant risk of loss. Read the full risk disclosure.