Trading AUDUSD using risk to reward allows traders to plan for both the worst and best case scenarios. In this example, an OTM binary option was entered with only $20 of risk when price was at the ATR stop that is built-in to the Trend ATR by TradersHelpDesk and had formed a reversal bar.
Trading AUDUSD Using Risk to Reward
In this trade, knowing that the minimum move in June from 8am to 9am is ten pips, Gail Mercer, founder of TradersHelpDesk, enters one strike from price with a risk of $20. She sets a profit target at $80. The worst case scenario is that price moves against her position and she loses $20. The best case scenario is that price moves to where she anticipates (after price has retraced to the ATR and formed a reversal bar that is confirmed by the Stochastics hidden divergence) and she makes $60. This would provide a $1 to $3 risk to reward ratio.
Watch the video to see what happens with the trade when trading AUDUSD using risk to reward.
The Create Your Own Package is a great package to start for new traders. You can choose any three indicators for either NinjaTrader 8, Multicharts, or Tradestation. Of course, the package also includes online video training, documentation and templates to get you started.
For more experienced traders, the Silver Package is ideal. It includes all the indicators, plus online video training, documentation and our Skype group.