Knowing the right moment to set the risk reward ratio or
Sometimes the market shows daily price movement is very high. Though rare, we can take advantage of the moment to set the risk/reward ratio to the maximum possible. Knowledge analysis of price movements is required in order to find out the right time to maximize profits, especially at a time when market conditions are trending.
This can be done by observing the formation of bar and setup price action at the level of the key (the resistance or support).
1. in the event of a strong breakout patterns
While the market has been completed consolidation usually reached a deal to break. If the formation of the bar while convincing break, usually a breakout happens to be very strong. Note sometimes happen false breakout first before really break with the powerful. The following examples of anticipation of the occurrence of a strong breakout:
Sometimes the market shows daily price movement is very high. Though rare, we can take advantage of the moment to set the risk/reward ratio to the maximum possible. Knowledge analysis of price movements is required in order to find out the right time to maximize profits, especially at a time when market conditions are trending.
This can be done by observing the formation of bar and setup price action at the level of the key (the resistance or support).
1. in the event of a strong breakout patterns
While the market has been completed consolidation usually reached a deal to break. If the formation of the bar while convincing break, usually a breakout happens to be very strong. Note sometimes happen false breakout first before really break with the powerful. The following examples of anticipation of the occurrence of a strong breakout:
In the picture above looks strong hints of impending breakout after prices broke through resistance. Note the formation of bar and candlestick "tail-tail" him before the inside bar, which shows strong momentum before the prices really penetrate the resistance. PIN bar formed and experiencing rejection (rejection) on the level (now support) confirms the will of a strong uptrend. In this case the risk/reward ratio can be enlarged up to the next resistance level.
2. the signal that shows the trend of the forwarding
When the conditions of price movements are trending, it signals that suggests forwarding trend (trend continuation signals) have a high probability of truth. In the example below the pin bar and inside the bar, formed by the moving average lines indicate impending forwarding a strong trend. At the levels of the risk/reward ratio can be enlarged.
3. Price action that occurs at the level of the key
Setup price action that occurs at the level of the key (support or resistance) is a strong signal that indicates a strong trend of impending. If it occurs on the market condition is trending as examples of XAU/USD daily here, then it is likely to happen is a huge trend of forwarding.
Fakey bar formation (false bar) that occur on a line moving average downtrend and confirmed with rejection at the resistance level indicates a very strong downtrend sentiment after the consolidation. In this case, risk/reward ratio can be made up until the next support level.
To maximize the risk/reward ratio it takes practice and patience because it is usually fairly accurate results occur in the daily time frame.
Posted by Unknown on Monday, February 2, 2015 - Rating: 4.5
Title : Tips on using Money Management (3)
Description : Knowing the right moment to set the risk reward ratio or Sometimes the market shows daily price movement is very high. Though rare, we can ...
Description : Knowing the right moment to set the risk reward ratio or Sometimes the market shows daily price movement is very high. Though rare, we can ...
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