The above daily chart shows the Russel 2000 stock index. The first blue arrow indicates what appears to be a valid sell signal, but over the next 5 sessions the market fails to produce any downside and it simply trades in a range. The trader utilizing a time limit of 5 days would label this as a failed sell signal, and they would close their short trade on the fifth day, possibly without incurring any loss at all. The second blue arrow indicates how the market reversed at the 200 day moving average, a trader going long would once again count days, and give the market five days to start rising or else close the long trade. The market in this case has been rallying, so the trader would keep the long trade open.
