# NEM(XEMUSD) Long Risk Reward: 4.86: 1 Current 0.29553 02Sept17

POLONIEX:XEMUSD   NEM / US Dollar (calculated by TradingView)
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NEM Long Risk Reward: 4.86: 1 Current 0.29553 02Sept17
It looks like someone was stop-loss hunting! The most recent candle shows a wick that just barely crossed the bottom of your pink zone.

Would you be so kind to explain your Risk/Reward calculations for this trade to equal 4.86 to 1. Thanks so much Sean!

JKNSmiles
@JKNSmiles, Sure. Entry is in anywhere in between the pink (Oftem its top of the pink when I take the trade). Stop Loss is placed bottom of the pink.

THe green area is the profit zone. With Targets we are aiming for,

Make sense?

SEAN_VENGAN
@SEAN_VENGAN, Doing the math would be most helpful as to how you get to 4.86 to 1. Thanks so much! Then I can plot the numbers easier.

JKNSmiles
@JKNSmiles This is sometimes difficult to explain as each person's reasoning is different.

I look at as simply if I risk \$1 I am looking to get \$4.86 back.

So according to your position size you would scale up or down.

Example1 if I risk \$100 I expect to make \$486
Example2 if I risk \$1,000 I expect to make \$4,860
Example3 if I risk \$50 I expect to make \$243

Not sure if that's any clearer for you?

SEAN_VENGAN
@SEAN_VENGAN, Thank you for your reply! That part I completely understand. I'm speaking of this chart and your exact entry and exit to get to that 4.86 to 1 reward to \$1 invested. If you could do the math on the exact prices that would make your charting crystal clear....I hope! LOL

SEAN_VENGAN
@SEAN_VENGAN, I think the question is: How did you come up with the ratio of 4.86:1 ? Is there some complicated formula that you plugged a bunch of numbers into and got 4.86? Or did your TA give you 0.4386 as T2 and your ratio of 4.86 is based on this relative to the stop-loss? Thanks.

CoinRat
@CoinRat, So lets keep it simple (no magic formulas) :

Step 1. There are 2 colors - green and pink
Step 2. Let's do the pink part - draw a horizontal line from top of the pink box and another horizontal line from the bottom of the pink box. This price range is always the RISK part (that is to say the 1 part in our example 4.86:1)
Step 3: Let's do the green part - - draw a horizontal line from the top of green box and another horizontal line from the bottom of the green box. This price range is always the REWARD part (that is to say the 4.86 part in our example 4.86:1)
Step 4: The same process is for Shorts but for Shorts, the pink box shows on the top and the green box is below it

Finally, bear in mind they call it Risk Reward but its expressed by numbers as Reward to Risk. This means 4.86 is the Reward and 1 is the Risk.

SEAN_VENGAN
@SEAN_VENGAN, thank you for your response. That makes sense. So it sounds like I was correct on my second point. The pink box extends down to your stop-loss. The green box extends to your T2. The reward/risk ratio of the current price to T2 vs the current price to stop-loss is 4.86:1. So the ratio is straight-forward. The magic is in how you came up with T1, T2, and the stop-loss.

SEAN_VENGAN
@SEAN_VENGAN, Thanks so much!

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