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Risktoreward

Xauusd Long Confirmations: Entry point Here because... A: Confluence 1. Imbalance 2. Manipulation 3. Four Hour Previous Market Structure 4. Fibonacci Golden Pocket (last Higher Low Before Break of Previous 4hr Market Structure) B.Structure 5.Higher Lows Forming 6. 2 weeks of Continuous Bullish Structure 1 to 4 risk to Reward tp 1 its all about The Risk to Reward If this trade clears at 1% risk, you'll make 4% Profit , Once Trade Goes to 1;1 Risk Stop loss at Break Even you can even decide to take Partials and let the rest Ride 1 to 18 Overall Tp What does that mean? If you Risk... $10 You Can make up to $180 No reason to Gamble 1% can make you 18% 2% can make you 36% 3% can make you 54% All on a single Trade Besides cryptocurrency youll never see a return that Great With investing Cfds / Margin Trading is the way to go If you dont have a trade plan Dont trade!!! Always know your potential Risk and How much You want to make Minimum For every trade Before you get in and Do Not Over leverage risk 1-3% Max per Trade This is what Separates The investor from the Gambler Simple but not easy
FOREXCOM:XAUUSDLong
by carluccifamily
1
A Rising Wedge on the Verge Gold, the most volatile species in the Forex market. It's clearly known that gold is in the bull run for a few days and of course it would reach better highs. However, if you look closely, there is a beautiful rising wedge forming in the lower time frame - check out 15 mins TF and a rejection candle from the supply zone, best chances that it will go down from here but be cautious - it could either go for a quick 30 pips move or another 100 pips move down to cover the previous price inefficiency. Try to put your stop loss to entry once 1.25 RR is achieved and let it roll by closing half of your position at 1.5 RR. No more than 0.5% risk on this one. Apply strict risk management rule. Have a good trading week everyone!
OANDA:XAUUSDShort
by VeerForex12
1
EURUSD Long Opportunity, 1:13 AvailableGoood morning ladies & gents. After taking out an area of buy-side liquidity, EURUSD fell into a multi-day consolidative range - today it broke to the upside. Now, EURUSD remains bullish. I'm looking for a pullback to this area (1.22305) where I'll be looking to take a long position with my take profit at the monthly swing high. Commitment of Traders data report states that EURO is extremely bullish & dollar is extremely bearish; hence, supporting a EURUSD long bias. I'll be looking to scale out at multiple points in this trade. I wish you all a profitable week ahead. - AmplaFX
Long
by Jiraiya_eth
Winrates required to breakeven relative to stop & target sizesTaking AUDUSD as an example here, the spread is not the smallest relative to ATR nor the largest. The formula to get a breakeven winrate is 1/(1+reward/risk). Because we want winrate*reward = loserate*risk <=> winrate*reward = (1-winrate)*risk <=> winrate*reward + winrate*risk = risk (never 0) <=> winrate = 1/(1+reward/risk) For example with a 20 pip stop, base risk to reward of 1 to 5, and 2 point spread, reward or winners = 98 pips, risk or losers = 22 pips. So the reward/risk = 98/22 = 4.4545454545... So the breakeven winrate will be 1/5.4545454545 = 18.33% That is just the breakeven winrate. Profitability will of course depend on: - Frequency: How many trades you are able to take - Winrate: How much higher than the breakeven winrate it is - Position size: Profitability does not go up the higher it goes If a strategy or trader only gets a couple of trades a year and his winrate is barely above breakeven, he will not be very profitable, and it will be very easy to lose all profits. And as the stops & targets in pips go down, the hit rates needed to actually make money go up exponentially up to a point where the trader needs to own a crystal ball and be able to predict the future. Take costs into consideration with any strategy and before placing any trade. And 1 other thing to keep in mind is spreads can also fluctuate, depending on the broker, at certain hours they can go up 3 fold, sometimes more, it can really hurt. A cool thing you may notice is with a stop of 20 pips, the spread/stop = 10% and also the winrate to breakeven is increased by 10% for both risk to rewards. Same thing with the 5 pips stop. And so on. The required winrate to breakeven increases by 100*(spread/stop)%. Easy to quickly calculate when you are considering trades.
Education
by MrRenev
GBPAUD LongJust sharing a position I have just taken on GBPAUD long. Price has broken out of the descending triangle and has managed to hold momentum outside of this pattern. It has had a lot of volume behind it so there WILL be a retracement in price - Not to worry though. GBP is strong across a lot of currencies, and AUD weaker across the pairs I follow. Also there is no AUD or GBP news due today. This gives me lots of reasons to believe that this is a good trade. Stop loss is just under the large daily breakout bar giving us plenty of room for adjustments. TP is at the top of the triangle. This is a 3 to 1 reward to risk trade. Happy to take the risk with all these things in my favour. If price shits itself and drops back into the triangle, then I only loose 1% and I'm hardly going to care.
Long
by MSI_JAL26
How To Use Risk To Reward And Execute A TradeWelcome Traders! In today's trading episode, you will learn how to use the position size and price range tool to help you determine your trade risk to reward. I will also show you how to transfer this over to a market order using the TradingView Paper Trading account feature. Furthermore, you will learn why some of your trades do not get taken out at the exact stop loss and take profit levels on your chart. Take time to practice what you learned in today's video. Until next time, have fun, and trade confident :)
by tradeconfident
54
GBPUSD BUY (Signal #9)1. Tested resistance 2. Tested resistance 3. Confirmation - bullish candles getting smaller It couldn't get simpler than this; very clear and significant level. Great R:R. This is price action trading 101. Although the trade is very clear, SL will be used incase something unexpected happens. SL is great, it helps us protect our capital! Entry Price: 123.787 Take profit: 124.000 (20) Stop loss: 123.590 (20) The risk to reward ratio is not perfect. So we are risking very little on this trade. Entry Price: 1.32230 Take profit: 1.32500 (50) Stop loss: 1.32700 (25)
Short
by ForexParadigm
LTCUSD short ideaHey everyone. I hope this finds you well. I apologize for my abscence recently, but I hope you have been able to pull a profit without me. Anyway, he is the trade setup. Although btc is incredibly bullish, LTC seems to be lagging just a tad. From my wave count you can see what looks to be a nice 5 wave move, where must fib targets were hit spot on, or just a little off. From my chart, you can see that a 5 wave move down has been made, along with the 3 wave move to the upside for wave B. This means that we have only one option, a 5 wave move down for wave C. The target for the wave c will be the 55 dollar range, which is the 0.382 retracement of the whole wave. This might play out to be a complex correction, so a wave W of a W,X,Y, but we'll figure this out later. The stop loss will be the 62.593 area, which is just 2%. All in all, this has a 5.0 risk to reward ratio which is fantastic. I hope everyone can get into this trade in time. Have a nice day!
BITFINEX:LTCUSDShort
by Mika_k
GBP HKD Short term trade opportunityHi everyone, I am way too tired to make a full blog post, but I see some opportunities in this pair. Right now I think it is going down, but I can see that in the longterm it is heading back up, and I will make the full post once I feel well enough to give you all an accurate reading, but for now take this small setup. Macd on the 15 minute has crossed and appears to be moving towards the negative. 15 minute RSI is bearishly diverging. Target 1: 10.11016 Stop loss:10.14427 TLDR, we have finished a wave one of a greater move upwards, and I am expecting a deep wave 2 retracement. Around the golden pocket, which is 0.618-0.65, but maybe even to the 0.8. 0.8 is too aggressive for myself, but aim for it if you want. Another target is the base channel of the larger cycle, but I'll talk about it when I make a full post. Anyway, I'll hopefully talk to you guys sometime tomorrow.
Short
by Mika_k
AUD/CHF quick trade opportunityHey everyone, just here for a quick trade opportunity on AUD/CHF. This is a really short and quick analysis, so act fast. Elliottwave analysis: It appears that we are stuck in some sort of triangle. we have just finished our wave C and are about to start the wave D to the upper boundary. For the target, I will be using the upper boundary line, and for the stop loss I will be using the lower boundary line. RSI analysis: The bullish divergence on the 1 hour RSI is telling me that we have most likely hit the bottom for the wave C and we are headed up to make the wave D. MACD analysis: The MACD analysis for the one hour is also telling me a similar story as the one hour RSI. we are seeing bullish divergence, and in addition to this, we have literally JUST seen a cross and are headed towards the positive side. Something interesting I have found, is that on the one hour macd, we have formed a triangle. I don't know the significance of this, besides the fact that if we break out of the upper boundaries, we are headed pretty far up. All in all, I would consider taking this trade. It presents a 4.4:1 risk to reward. The trade setup is as follows: Target 1: 0.6655 Stoploss: 0.64956 I might consider getting out once I have secured a 2% profit, but I will let you guys know. I am not a fan of holding positions for very long, but for now this is my trading plan.
Long
by Mika_k
1
RISK TO REWARD 📚 An Educational Write-up on How to Find ThisIntroduction: This illustration explains the minimum Risk-To-Reward ratio needed based on your average win-rate while using a fixed % risk amount. "Risk-To-Reward ratio": The ratio of what you stand to lose compared to win. "Fixed % Risk": A static % amount of your total account balance at risk per trade. "Fixed Dollar Risk": A static $ amount at risk per trade. Regardless of account size fluctuations. "Win-rate": The % out of all trades that are winners. Steps: 1. Before being able to determine what Risk-To-Reward is acceptable to use, you will need to create a baseline measurement of your strategy's performance. 2. To create this baseline, you will need to backtest your strategy and obtain its current average win-rate. 3. This can be done using your pre-determined entry logic with a fixed stop-loss/take-profit offset amount. (Adjusting your entry logic prior to finishing a round of backtesting may produce skewed results. Do not "cherry-pick" trades as that will lead to false results.) 4. Based on the resulting average win-rate you can then find the minimum Risk-To-Reward ratio you should be using. 5. Backtest again using the more optimal Risk-To-Reward ratio and repeat this step until the most optimal backtest results are obtained. Here is the formula for determining your Average win-rate after you have tallied the wins/losses of your backtest: #W = Number of winning trades #L = Number of losing trades (#W / (#W + #L)) * 100 = your average win rate % ----- Introduction to Fixed Dollar Risk: We have found it common for people to use the logic of fixed dollar risk amounts when calculating win-rates needed to break even, but then to use a fixed % risk in practice. This simple-to-make mistake can lead to account erosion over time due to the way compounding works. The fixed dollar approach uses relatively simple math for breaking even as shown below. Example: 3 losing trades followed by 1 winning trade using 1:3 risk-to-reward achieves breakeven (ignoring trading fees and slippage) This risk-to-reward ratio itself implies the win-rate needed (lose $100 three times, win $300 once, you break even). The fixed dollar amount risk doesn't deal with compounding. As such, its logic cannot be used for fixed %. ----- Using Fixed Percentage Risk: Fixed % uses a more complicated and less apparent method for calculating how to break even. As shown in our illustration, if you take three losses in a row you won’t break even after your next win. Fixed % is always dealing with the same % of your current balance. So as your balance decreases, the total dollar amount risked is less, and the total dollar amount gained with each win is reduced. Thus, strings of losses require additional wins compared to the fixed dollar approach. The fixed % method ensures against account erosion by showing the minimum win-rate needed to use each risk-to-reward ratio. MATH NOTE: We used a simplified method for finding the minimum win-rate to make this useful and generally applicable. Our method is based on a given risk-to-reward ratio and assumes the max number of losses in a row to produce a minimum win-rate, it does not factor in all different possible loss strings and their probability. ----- WHY USE FIXED % !?: The question one will have at this point is, "Why to use fixed % if it is so F'ing complicated!?" The answer to that is simple. Despite being more complicated, fixed % is actually objectively better by almost every other measure. With fixed % you generally perform better than fixed dollar during strings of losses and wins. As with fixed %, you lose less as you go down (because you only ever lose 1% of your balance), and you gain more as you go up (because of your winnings compounding). Not only that, but you also perform better even when losses and wins are more scattered, as you can see on the chart below. ----- Conclusion: Fixed % is more complicated than fixed dollar... to say the least. However , it is none-the-less superior in most instances. Use the logic above while using fixed % risk, since if you use fixed dollar logic but use fixed % in practice you will underperform your theoretical results. If there are any major flaws in our logic/approach please let us know in the comments as of course, we are looking to provide as accurate instructional writeups as possible!
Editors' picks
BITSTAMP:BTCUSDEducation
by AlphaBotSystem
65
USDCAD +++ Waiting for a higher Price to SELL +++ Hi Traders! The market is in a Downtrend. As you can see the market is making lower lows. It even broke out from the important and strong Support of 1.38700. The Oscillator RSI shows the Value 10.3. For the most of the traders a Value under 30 is oversold. That's when the Trend-direction-traders cut their winners and the Trend-reversal-traders get in. The result is a Pullback. So, our idea is to enter the Trend-Continuation after the Pullback. A good sell opportunity is the bounce with the 20MA. We recommend to trade the trade with a good risk-to-reward ratio. Thanks and successful Trading :)!
Short
by swissmoneymakers