Introducing the CRR
Hi,
today I would like to introduce the CRR - this is the "Chance-to-Risk-Ratio". Nothing really new, most people know it as the Profit-Risk-Ratio. However, I want to try this idea - which I never really did before. Here is my approach to it:
1. Find the stock you would like to trade and set a personal target
2. Set the SL
3. Divide the possible gain (target minus price) through the possible loss (price minus SL)
4. This ratio has to be bigger than 1.5 in order to place the trade!
5. Use the ATR(5) to see if the move in your direction will be able to take place within 4 days maximum!
The stock I choose today is MEH, last price was 8$, my first target is 8.70$, the SL is at 7.60$ (below PivotPoint). The ratio therefore is 1.75. The ATR(5) is at 0.76 currently - which makes it risky to get stopped out - but also likely to reach the first target within a day! Here is the chart:
Good luck to all of you,
The Stockinvestigator
today I would like to introduce the CRR - this is the "Chance-to-Risk-Ratio". Nothing really new, most people know it as the Profit-Risk-Ratio. However, I want to try this idea - which I never really did before. Here is my approach to it:
1. Find the stock you would like to trade and set a personal target
2. Set the SL
3. Divide the possible gain (target minus price) through the possible loss (price minus SL)
4. This ratio has to be bigger than 1.5 in order to place the trade!
5. Use the ATR(5) to see if the move in your direction will be able to take place within 4 days maximum!
The stock I choose today is MEH, last price was 8$, my first target is 8.70$, the SL is at 7.60$ (below PivotPoint). The ratio therefore is 1.75. The ATR(5) is at 0.76 currently - which makes it risky to get stopped out - but also likely to reach the first target within a day! Here is the chart:
Good luck to all of you,
The Stockinvestigator
Labels: methods
posted by The Stockinvestigator at 12:31 PM
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