| The example shows a real setup and possible trade plan, but more than that, it shows swing traders in general how to look and plan their entries (with a technical reasoning and trigger), and their stop loss as well as take profit targets, as they assess their 'risk reward ratio' (also mentioned as reward vs risk ratio, which is the more precise description of the ratio itself). And how a higher or lower ratio relates to the probability of them winning the trade. The higher my reward is vs my risk, the lower the probablity of winning my trade. The lower my reward vs risk is, the higher the chances my trade plays out to win, and the less exposed my trade is from being stopped out. |
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