Hi T0BY, is this going to be a forex risk/reward thread, or is your post just SGD/JPY analysis?
If it is SGD/JPY analysis I'll edit the thread title to reflect this.
Just a thread of trades where the take profit is always greater than stop loss.
A friend of mine who is a broker told me (so he believes) the reason a lot traders don't make money consistently over the long term is because their losses are generally larger than their profits.
I guess a lot of traders are patient with losing trades (hoping they'll come good soon) and impatient with winning trade (grab the money - a bird in the hand is worth two in the bush) - but reality is it should be the other way around.
So what percentage do you take for the reward? Twice what you risk for example? Or do you just let it run and go with gut feelings?
Reward is anything equal or greater than risk - but never less than.
I usually set the the take profit at a support/resistance level.
I'm in a long on USDSGD at the moment. To determine where to set the take profit I had a look at the monthly chart and found an old support from 2008 at 1.343. Whether such an old level has any relevance is questionable, but it's surprising how often the market still respects levels from years ago.
Yesterday USDSGD looked to me like it broke out of a bull flag pattern. Initially I set stop loss just below bottom of flag pattern which was actually 1:1 risk/reward at the time - but seeing as the break looks like it's good I've since moved stop to just below top of the flag pattern - improving the risk/reward to 1:3