When I calculate Reward:Risk Ratio. I always stuck in how to figure out the target price.
For example, look at this chart.
1. entry from pivot low at 7.1
2. placed sell stop at 5.9 (under pivot low)
3. my Risk/Share = 1.2
4. Identify target price. Here comes the...
I've got a question in regards to risk reward ratio.
I can understand how the 3:1 ratio works in relation to leveraged instruments, but how is it possible to apply this ratio in day trading ordinary shares?
Forgetting about leverage (I cringe at the thought of owing my life to the CFD game)...