Thursday, July 7, 2011

5 Minute Pullback trade example

Here is an example of a trade from today:

Our morning analysis concluded the following:
- Fundamental bias: Long
- Technical bias- Long

Due to this, following our system, we buy the pullbacks in the market. Above is an example of the 5 minute chart during the position. We have our stop at the invalidation point, risking $50 to make $200. As the trade goes in our favor, we will reduce the risk of $50, or 4 to 1 ratio, to $0 of a positive dollar amount. In theory, our risk to reward become 200 to 1 and/or even better when our stop is moved above our entry price.

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