Dissecting a Failed Setup

Some trade setups play out beautifully. Many others never trigger an entry or simply do not work -- but, fortunately, triggers often filter out setups that will never succeed. Typically, when you are stopped out of a setup, the risk isn't ridiculous compared with the potential reward -- barring a disaster, of course. (Note: I do not recommend keeping setups over earnings, unless they are part of a super-low-risk options strategy.)

CF Industries (CF) -- Daily Source: Dynamic Trader View Chart »

As an example, here is an old setup that failed, along with its possible risks and rewards.  This was a time and price setup in CF Industries (CF), using the $211.78-to-$214.33 area and a group of time cycles that were due between Feb. 14 and Feb. 21. If the price had held above this price zone, the upside target would have been the $238.59 area, or the 1.272 extension of CF's swing into that area. ...368 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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