#40 - Macaulay step functions and equilibrium equations

beindependentbb (32)in #finance • 8 years ago (edited)

What is up guys and girls?

Slow day today (with regards to trading). Been doing my third year Bachelor project on an aileron model where we are required to find the deflection throughout the entire structure. Something different than trading, you know?

Have been checking the charts here and there but personally I am just observing what Bitcoin will do (as it will impact the rest of the market). The current bias is still that 9200$ level:

Yes, it's throwing back however that is merely my view, the market does not really care. So until proven otherwise, that will be my stance. By the way, as I did not enter on the primary head & shoulders break, I have set up the following trade (the order is currently pending on an exchange).

Mind that rather than setting my short limit order around the neckline at 10500$ (yellow dotted line), my primary goal in any trade is to reduce the risk I am taking thus, respecting a decent Risk:Reward Ratio (which you should aim to be greater or equal to two).

With this in mind, rather than setting my order around the neckline, my order is put around the 10650$ mark (red dotted line) and stop loss above the 11000$ level (due to the round nature of the number). The target is still 9200$ which puts it as a trade with a Risk:Reward of 3.15.

Just for comparison, note how our Risk:Reward would decrease if the entry level was to be set at the 10500$ level:

A bit less patience and BAM , instead of having one in two profitable trades to break even, you require three. Something to keep in mind when you take your next trade :)

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