Buy the Consolidation Breakout - Risk-Reward 1:5
Updated
Entry 283.25
Stop-loss 269
Target 253
Risk - Reward Ratio 1:5
LIC HOUSING FINANCE, from May 19th to Uptill June 17th, LICHSGFIN had a strong impulsive move. Since the 17th June top, price is in consolidation and remained above the 50% retracement level of the previous impulsive move. There is a high probability that an ongoing consolidation breakout may result in one more strong impulsive move.
Apply your money management before taking a trade, and trade management ones the trade is going in the anticipated direction.
How I set the target?
Target is equal to the range of the previous impulsive move, added to the breakout price.
Nothing is a sure shot in trading, each trade must have a pre-defined stop-loss.
How I set the Stop-loss?
Here come the stop-loss placing methods which are always debatable. Books guide us to place the stop-loss below the swing low or below the lower line of a chart pattern in a bullish breakout.
In this case, the Risk-Reward Ratio will be very poor because stop-loss will be 256 and the RR will be reduced to 1: 2.5 which I don't prefer in Positional Trading.
So kept stop-loss below the probable support zone in the lower time frame. The disadvantage in this method is that the stop-loss is tight and may get triggered if there is a high volatility or price fluctuation, but I'm ready to lose accuracy over high reward.
In trading, if you have 40 to 50% accuracy, it will be more then enough. With a good Risk to Reward ratio and 40 to 50% accuracy, is a winning combination.
Many claim 80% to 90% accuracy and still, they are not on the Frobs richest list.
If I get 80%-90% accuracy, "I will be The GOD OF TRADING".
In Trading High Accuracy is a MYTH.
Stop-loss 269
Target 253
Risk - Reward Ratio 1:5
LIC HOUSING FINANCE, from May 19th to Uptill June 17th, LICHSGFIN had a strong impulsive move. Since the 17th June top, price is in consolidation and remained above the 50% retracement level of the previous impulsive move. There is a high probability that an ongoing consolidation breakout may result in one more strong impulsive move.
Apply your money management before taking a trade, and trade management ones the trade is going in the anticipated direction.
How I set the target?
Target is equal to the range of the previous impulsive move, added to the breakout price.
Nothing is a sure shot in trading, each trade must have a pre-defined stop-loss.
How I set the Stop-loss?
Here come the stop-loss placing methods which are always debatable. Books guide us to place the stop-loss below the swing low or below the lower line of a chart pattern in a bullish breakout.
In this case, the Risk-Reward Ratio will be very poor because stop-loss will be 256 and the RR will be reduced to 1: 2.5 which I don't prefer in Positional Trading.
So kept stop-loss below the probable support zone in the lower time frame. The disadvantage in this method is that the stop-loss is tight and may get triggered if there is a high volatility or price fluctuation, but I'm ready to lose accuracy over high reward.
In trading, if you have 40 to 50% accuracy, it will be more then enough. With a good Risk to Reward ratio and 40 to 50% accuracy, is a winning combination.
Many claim 80% to 90% accuracy and still, they are not on the Frobs richest list.
If I get 80%-90% accuracy, "I will be The GOD OF TRADING".
In Trading High Accuracy is a MYTH.
Trade active
Note
Trailing Stop-loss for 269 to 281. ( A Swing Low )Trade closed manually
Trailing Stop-loss hit. Sorry for the delayed update.
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