Risk to Reward: Examples.

The following charts gives some examples of the importance of considering the Risk to Reward ratio when trading.

NB: I will update this page as examples present.

Monday June 5th: GBP/AUD: A new TC signal triggered with a trend line breakout BUT the size of the Stop required was too large to consider this a reasonable trade and so this was a TC signal that was best to leave.

GA15

Tuesday June 6th: AUD/JPY this example was on an RBA update day but I have posted this as an example based on the maths of the set up. The 4hr chart showed price action consolidating within a triangle pattern as below:

AJ4

There was a new TC signal on the 15 min chart during the Asian session though and the Stop required for this trade was just 15 pips. There was sufficient room for this trade to move to offer a decent Risk to Reward profile and the trade did move the 60 pips down to test this trend line before finding some support. This was a 4R trade.

AJ15min