OK.
So when we talk about risk reward it has to do we need your comfort.
How much money you want to allocate into the specific trade the position size and the kind of training
you're doing right here.
Mainly we're talking about day trading day trading currencies.
So this will will we will be referring to but other all the correct risk reward ratio when trading is
one to four.
What that means is you want to risk a dollar to make four dollars three four five dollars at least three
four dollars.
So if you are in this particular currency you can dollar.
So we have seen the price seems to have found the base.
Now we're looking at the chart simply because it's easier to say this is something you want to be doing
and you want to analyze different charts on you.
You start on the daily chart to see the pattern.
And then you go into the Howard chart to see if you see if you find some consolidation happening some
reversals in this case.
We are seeing a reversal here and here.
So this is a double bottom means prices are ready to bounce up and indeed OK.
So we are looking at this area of course.
And the downtrend in the breakout right through here.
See this black line right here.
Price bounce down a supporter a 56 and run in reverse move to the moving averages pushed through the
resistance this was accuses this trend line.
I don't have the wall chart but going back was many days many days of a pullback and then a breakout
bounce and the breakout.
So the breakout here is where you want to consider internet trade specially since the 50 simple moving
average it's all in prices prices coming through with volume.
This is one of the Barnum's of his that you want to go inside the one minute chart to see the volume
they were talking about.
This just makes it easier to see the pattern of consolidation and the areas you want to enter exit and
calculate the risk reward.
So you enter the breakout and you exit somewhere at the resistance so there is resistance up here you
see this area right here.
OK.
So there's the resistance of the zipless to X and then play Price consolidate.
So let's say you missed these run you wait for the consolidation we see Price forming these benoît in
rekindling.
So we have seen these pennon.
And this is a place to enter after the break out game.
So now you are waiting for Price to break out of the pen and here it comes.
This is the hour where the break out of course with falling this is the key piece brain information
prosthetics out of the top of the channel of a dependent.
And here's the is the Kindle so you can enter any time during these kind of formation volume coming
in.
So when you go inside the one in your chart you see the volume bar popping out of the break out.
And then you go back into the hour which are 16 that means 60 minutes that's hourly.
So they are shop here is a break out.
So you should expect the follow through movement and then what is the risk reward.
So it was obviously worth 1 2 for racial.
OK.
So if you're entering at these level
for simplicity let's call it 67 and right.
So you entered a six to seven hundred and you want at least one to make four.
So again for simplicity you win at least $100 to make $400 a game.
So if you are entering a 67 and then you wouldn't want price to come down further than $100.
So if you have the 68 dollars worth of a coin I'm just keeping things as simple as possible even numbers
where you bought it 67 and right when either one coin and you don't want to risk more than $100 so it's
want racial you want or this $100 to make for it.
So if you enter a 67 and then you want to place their stop loss somewhere around 66 under or you don't
want to make that a random choice.
You want that Stop-Loss to coincide with the a support area below the support area.
So you want to find the support area.
So look at the chart and find the support there in this case.
It's the top of the spending.
Right through here at the top of the pennant.
So that support price you don't want to come back down and go below it.
OK.
So if you go late that area comes around 66 under.
Look at the error when you enter and look how far down is this support.
So if your support is one point lower your reward needs to be four points higher.
Now where you're taking the risk of one and two make four.
In this case you 100 to make 400.
So if you're risking 100 You entered a 67.
Stop-Loss is 66.
Tiger is 71 and
if you support is in this case $100 or the ratio 1 to 4 if your support is one point lower
and your reward is four points higher.
That's a good risk reward ratio.
If you are support or press could pull back and get stopped up it's one in your reward is 1.
Don't do it.
That's not a good risky operation.
Don't risk one to make one or two to make one risk one to make four five ten.