At around 0620 GMT the EURGBP price bounced off the previous day's low of 9047. The day's high was 9083. A slight breakout occured followed by a brief pullback to 9065. I traded this setup and had a target of 8853, I actually closed this at 8903 and I feel that exit was a bit premature but that's another story.
My question is if the trade was open all the way to target then we have 2 entry options with stops at 9090 and targets at 8853.
1) Short 9060, 30 pip risk 207 pip reward 6.9:1
Now the entry I took following the second breakout
2) Short 9040, 50 pip risk 187 pip reward 3.74:1
It therefore stands to reason that trade 1 needs to succeed 12.66% of the time to breakeven and trade 2 needs to win 21.09% of the time. If you divide the 2 percentages or (6.9 + 1)/(3.74 + 1) = 5/3. This means trade 2 must succeed 66.6% more often that trade 1 for it be the favorable entry.
With the possible increased saftey of the postition of trade 2 do the experienced traders here have an idea if it is more profitable to trade the breakout in this way or otherwise?
My question is if the trade was open all the way to target then we have 2 entry options with stops at 9090 and targets at 8853.
1) Short 9060, 30 pip risk 207 pip reward 6.9:1
Now the entry I took following the second breakout
2) Short 9040, 50 pip risk 187 pip reward 3.74:1
It therefore stands to reason that trade 1 needs to succeed 12.66% of the time to breakeven and trade 2 needs to win 21.09% of the time. If you divide the 2 percentages or (6.9 + 1)/(3.74 + 1) = 5/3. This means trade 2 must succeed 66.6% more often that trade 1 for it be the favorable entry.
With the possible increased saftey of the postition of trade 2 do the experienced traders here have an idea if it is more profitable to trade the breakout in this way or otherwise?