Objective:To define Risk:Reward using the 2.5 wk FLD to enter trades at 4.5 year lows.
Using ES and $INDU
Assumptions:1. Correct phasing. 2. I don’t have dynamic FLDs programmed into tradestation at this time, mine are static.3. Price is entered at the level of the 2.5wk FLD. No slippage, no comission.
Risk 74.50 pts * 50 = $3,725
The 2.5wk was crossed at the same time as the 10 wk
Reward 74.25 * 50 = $3,712.50
to get 1:2 need 1,266.5. This was achieved in the first 10 week cycle, just before and after the 5 wk low.
Using the 20 wk FLD target of 1363.50 R:R is 1:3.30 Target easily achieved.