Given risk is 2%.Let’s take a look at GBPUSD between 24th Oct 2017 to March 2020.
Set up as followed:Gbpusd SELL@1.32000 ,1.32350. Sl 1.33400. Tp 1.30900.
Monthly ATR is about 570 pips.
SL pip is 140pips.
1.43377-1.32 = 0.1177 (1177pips)
Based on this,We have to bear the risk of 16%(2% x 8) - - - - - - >1177/140 = 8+ before taking profit of 2R or more from August 2018. 2R is 280pips. 1.3200-0.028 = 1.292(price reached 1.292 or lower from August 2018)
The price reached high of 1.43377 on Jan 2018. It plummet to 1.14093 on March 2020.
Let’s say we use ATR to set TP level. We multiply ATR 570 x 1 times or more. We get 570pips or more. Price will hit tp from August 2018 onwards.
In short, we use 2R, we get 280 pips, we use monthly ATR,we get 570 which is 4R +
When do we cut loss? Is the price reach 280pips or more then we cut loss? Please kindly advise.
Please kindly advise if I use 2R or monthly ATR to set TP level.
For money management, do we use 2R or use ATR to set TP level?
Thank you very much.