Grading trading setups involves evaluating various factors such as breakout levels, news, volume, past performance with similar trades, and the overall behavior of the stock (smooth runner vs. choppy). By absorbing as much information as possible, you can mentally assign a grade to the setup, like A+, B-, or C. Higher-grade setups are more likely to succeed and warrant larger position sizes, while lower-grade setups might not be worth the risk. Over time and with experience, you'll be able to identify which setups are worth taking.
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