9h ago in Trading discussion
Question about reward ratio
Hey guys so I was just wondering if someone could help me clarify on something basic.
this screenshot is from the first video dealing with jedi entry models.
He's talking about making a order or a trade where that big green and small red rectangle are
he said he put a limit order in at the bottom of the red square, and a stop loss at the top
then he said that the green rectangle denoted a 5:1 profit margin
my question is, how is it a five to one profit margin? I thought we were just making a sell/barrish order when price went into that supply area (red square). are there two trades that take place in this scenario? I thought it was just one.
If someone answers this question, (which i would be much appreciative of) it would also answer my other question which is:
Does one need to first make a buy order to obtain shares before they make a barrish/sell order?
thank you for any clarification
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Question about reward ratio
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