Trading Risk Management – Risk Reward in Trading Forex Commodities and Cryptocurrency
Getting into a trade is easy but getting into one with a poor risk/reward ratio is just asking for trouble. Always keep the amount of risk in the trade and its potential upside at the forefront of your mind; if you can hang onto some of these trades and run them multiple times then your account is going to grow and grow. Let’s also take a little look at some stocks to watch like 888, CMC and William Hill.
How much risk per trade
It’s already had the gap. I’ll be looking to bank some profits at two six, two here. Not looking to get in the risk reward is really poor. So if that’s my entry, the top of that block there, and that’s my stop. Here’s my targets, which is not bad. Forex Risk reward got about two to one, just over two to one there. But if I’m looking for more upside, I want to be buying it a little bit further down here, get good value looking maybe for some other color, yellow candlesticks, but you can see buying it up here is a difficult one. I’m not really interested. The risk reward is pretty poor. And if you look at it on the weekly timeframe and I trade a lot of these stocks on the weekly charts, uh, when it comes to trade in the London stock exchange companies, um, you know, we get some nice continuations, nice higher highs and higher lows here, but here absolutely too high.
I’m not interested. It’s I look at some others here because this sector has been really strong. Indeed. It’s like you look at CMC markets. Um, you can see this is at a, a really nice move higher as well. Uh, you’re talking one 50 all the way up and it sort of started to the storyteller is a great indication where the momentum is starting to be lost nice pro trend system by to get you in. And now momentum is being lost here. We just could have a little bit of a pullback. Now. It really does depend on your time horizon, how long you want to be holding these markets. But you’ve got to be thinking in terms of risk reward and you can see there’s the risk. There’s the entry here. There’s the, the risk and here is first profit target. And then you’re looking to get out when it turns, when it turns red.
And at the moment we don’t have a red, but we certainly have a loss of momentum down here. So I would, you know, if I was in this, I would certainly be looking to bank some of these profits and get out of this market. And you know, you’re only a commission or spread away from getting back in. Now let’s take a little look at William Hill shares because there had been very much in the news. And if I looked at this chart pattern, there’s a nice move up pro trend system by red to get out green, to get back in. Now I could count this as a wave. One, two, this looks like a really strong way three here. So what I want to buy at the top of way, three on a wait for it to come down a little bit. And then I’m looking for new buyers here away for we’re looking for red PTs, red, red, red, and then a new green to get long that market.
Risk reward in trading
So when these markets explode higher, when the candle sticks, especially if you’re day trading, if they go fast very quickly, then you don’t buy it. The thing is you get the pullback in your buying up here, you get a pullback, you get spooked out. Your risk reward is, is not great. You want to be looking to buy it on the down here, nice risk reward and nice profit targets. All right. So thinking in risk reward is so important. Playtech, uh, you know, it’s something like this is on the weekly chart. We’re getting a little bit of a pullback. The upside is, you know, seven 50 up here, an eight 50 days. Um, we’re down here at three six one. Um, you know, these market, this type of price action is quite good. There’s no explosive move higher. You see, I don’t want to be in the trade. Um, when the Mar the moves already over, you know, if it explodes higher, I don’t want to be in it up here. I want to be in it beforehand. And that’s the key finding these little protein system buyers and trends getting in early. So you can, you know, you can certainly, uh, look to sell to people that are getting into late here’s GVC holdings. And this has been a really nice move. Let’s take a look at, look at this on the daily timeframe.
That’s the leap that you can see here, you know, lovely pro trend system buyers, not these small canvas steaks, then a very wide candlestick. We push higher push higher, and now we’re getting this pullback. How pain, how much pain would you feel if you’re buying the market up here, which is, which is not good. All right. So, you know, be careful stock markets are a little bit, the stock market index is a little bit fragile. Let’s take a little look at some us stocks here. Let’s take a look at, um, I mean, Amazon has dive into Amazon share price because look at Netflix as well. And you can see this. This is Amazon on the daily chart, uh, on the weekly timeframe. We had trend predictor for last week, and it’s still in play a trend predictor, which is a warning sign that we could see a little bit of a pullback here, but to two 99, now that the daily in red, here for a PTs cell signal, things could, you know, we could start to see some more downside.
If somebody will look at Netflix that was going to put pressure on the fangs, uh, Netflix share price. We’ve got some news about Netflix recently, but you know, you look at Netflix, um, we’re still a green PTs with a yellow back. Um, there is some worrying signs on the weekly, on Netflix. We do have a two way short, but no major cell signal year. I think it’s sitting weighted. It’s a risky area where we’re in, in the stock markets in these sectors. Just be really careful and, um, you know, make sure if you’re along in your, you’ve got lots of profit in some of these trays, then make sure you’re sort of taking some of that profit because the strong sectors here are starting to look a little bit over cooked for the, for this time being okay. They might get a nice pull back the next few days, and then we might go higher. But as we speak, we’re, we’re very extended. All right, now, tonight, Roger’s going to be doing a stock trading webinar to saving completely for eight. Make sure you register on the link below on this email and join Raj tonight is going to be talking about his strategy is we’re trading the stock markets, and it’s certainly going to be a good session guys. All right. So make sure you register for that. It is this evening. I think there’s seven 30. Take care, have a great rest of the day.