Last oanda's spread on that new was 30 pips:
http://i61.tinypic.com/2rqoobl.png
http://i61.tinypic.com/vdiiag.png
So the optimal entry must have a 30 pip stop loss, so we aim for 100+ pips which is 3:1 ratio, in other words we are hoping for at least a 33,3% probability of the price going 100+ pips straight to be successful.
The question is: which is that % of times when price go without troubles 100+ pips straight? if the solution is less than 33% then we are losing long term.
I already did that calculus looking to charts history in fpa, you can research by your own here http://www.forexpeacearmy.com/forex_...=1426204800000
So I analized how many times the price will go 100+ straight, i analized that new in 10 publications and the result was that the price will go in the same direction without problems 4 times out of 10.
But, its not a bad stadistic if we take in consideration that the times which the price went straight 100+, went straight 200 and 300+ too, and the highest was a streak of 1500+ pips that IS STILL ALIVE:
http://i59.tinypic.com/2my1eh1.png
Now the problem: it went 40% of the time straight, but you know what? Even if we think: well, im going to change my tp to a higher tp, maybe 500 pips because the facts were that when the price goes, it goes far beyond 100.
Look at this, is hillarious:
http://i62.tinypic.com/jr4cq1.png
http://i61.tinypic.com/2ljs3nm.png
4 out of 10 the price have that 100+ continuation, right, BUT 50% of the time (2 of 4) Coincidentally The price will return to the beginning , and then return to the continuation!
It happens every time! is hillarious because is so sassy. The price goes back EXACTLY to the same level, and then it returns.
We are talking about 6h chart, its not easy to see except if looking for the big picture.
So the conclussions are, that its better to aim for 300+ pips because it will only reach 100+ 4 of 10 times, and if the stop loss is 30 (in that new) then to be break even the probabilities of reaching 100+ are 33, we have 7% margin, which is miserable.
Better having 30 stop loss and 300 tp, that way the % to be in break even long term is 10% and we have still 30% margin in which the price will go with no problem.
http://i61.tinypic.com/2rqoobl.png
http://i61.tinypic.com/vdiiag.png
So the optimal entry must have a 30 pip stop loss, so we aim for 100+ pips which is 3:1 ratio, in other words we are hoping for at least a 33,3% probability of the price going 100+ pips straight to be successful.
The question is: which is that % of times when price go without troubles 100+ pips straight? if the solution is less than 33% then we are losing long term.
I already did that calculus looking to charts history in fpa, you can research by your own here http://www.forexpeacearmy.com/forex_...=1426204800000
So I analized how many times the price will go 100+ straight, i analized that new in 10 publications and the result was that the price will go in the same direction without problems 4 times out of 10.
But, its not a bad stadistic if we take in consideration that the times which the price went straight 100+, went straight 200 and 300+ too, and the highest was a streak of 1500+ pips that IS STILL ALIVE:
http://i59.tinypic.com/2my1eh1.png
Now the problem: it went 40% of the time straight, but you know what? Even if we think: well, im going to change my tp to a higher tp, maybe 500 pips because the facts were that when the price goes, it goes far beyond 100.
Look at this, is hillarious:
http://i62.tinypic.com/jr4cq1.png
http://i61.tinypic.com/2ljs3nm.png
4 out of 10 the price have that 100+ continuation, right, BUT 50% of the time (2 of 4) Coincidentally The price will return to the beginning , and then return to the continuation!
It happens every time! is hillarious because is so sassy. The price goes back EXACTLY to the same level, and then it returns.
We are talking about 6h chart, its not easy to see except if looking for the big picture.
So the conclussions are, that its better to aim for 300+ pips because it will only reach 100+ 4 of 10 times, and if the stop loss is 30 (in that new) then to be break even the probabilities of reaching 100+ are 33, we have 7% margin, which is miserable.
Better having 30 stop loss and 300 tp, that way the % to be in break even long term is 10% and we have still 30% margin in which the price will go with no problem.
