Discussing the article: "Building A Candlestick Trend Constraint Model (Part 7): Refining our model for EA development"
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Check out the new article: Building A Candlestick Trend Constraint Model (Part 7): Refining our model for EA development.
In this article, we will delve into the detailed preparation of our indicator for Expert Advisor (EA) development. Our discussion will encompass further refinements to the current version of the indicator to enhance its accuracy and functionality. Additionally, we will introduce new features that mark exit points, addressing a limitation of the previous version, which only identified entry points.
Assume you are considering buying a stock at $50. You set your stop-loss at $48 (indicating a potential loss of $2 per share) and set a target price of $56 (indicating a potential gain of $6 per share). Calculate the Risk-Reward Ratio for the stock.
Substituting the values into the formula: Risk-Reward Ratio = 1/3
In detail, this means for every $1 you risk, you expect to gain $3. A lower ratio (e.g., 1:1 or less) indicates more risk relative to the potential reward, while a higher ratio suggests a more favorable risk-reward scenario.
Based on the above example, here's an illustration using rectangles: a red rectangle for risk and a green rectangle for reward.
Author: Clemence Benjamin