By David Ruscelli
RISK REWARD AND TECHNICAL ANALISYS
I am liking this congestion in favor of the main trend very much, there is the support at 1,5060 I will put it in a pending short sale, in this case the risk reward is a respectable one, since the following support is found at 1,4900. There are 160 pips gain against 120 pips loss by positioning the stop loss over the maximum offered by the shadow of the candlestick of Friday. Risk reward is the differential between possible loss and possible gain, it can be found by looking at the ratios of pips in the distance between the entry to market and stop loss and the ratio between the pips in the distance between entry to market and take profit, which is usually connected on the following important support or resistance. Risk reward is an important technical analysis concept; we will look at it more in depth within the FOREX GUIDE in the weeks to come.
I would like to remind you that I am a qualified trainer of mathematical trading as well, a simpler method than classic trading, which is within everyone’s reach. For additional information regarding mathematical trading I recommend visiting our section regarding non-directional trading.
As we all know, today was a negative day for the European stock market, due to the bank levy which the Parliament of Cyprus refused to authorize. We have witnessed the Euro slide below 1,2900 against the Dollar even in forex, additional slides are possible, we see in the chart that our next support coming up for possible trades short is 1,2650. At this point we have a good risk reward.
Tomorrow we will have FOMC, the Federal Open Market Committee, meeting of government officials discussing monetary policies in the USA.
Thank you and Goodnight!