# Possible 600 pip trade… Simple strategy

Hey traders… how is it going?

There are two possible things that we need to analyze when testing one system:

• Accuracy of the system
• The risk reward ratio

A lot of traders “try” to focus on the accuracy of the system. I get a bunch of emails asking me about how many times my system is right, etc.

But let me tell you one little secret traders… We have no control over the accuracy of the system, its given data.

That’s correct…

As much as we dont like that statement… its true.

So we need to focus in the other aspect of the system, which is the risk reward ratio.

The risk reward ratio refers to the amount of pips your want to get agains the amount of pips you are risking on a trade.

If you are risking 30 pips and trying to get 30 pips, the risk reward ratio is 1:1

If you risk 30 pips but you try to get 60 pips, then the risk reward ratio would be 2:1

Ge the idea?

So, if there are two things that you can focus on, on one of them, you have complete control and on the other one, you are not even close to have any kind of control…

Which one would you focus on?

In the risk reward ratio, obviously (its the one you have complete control over).

Ok, now… let me show you a trade with a risk reward ratio greater than 10:1 (you know what that means right?).

The GBPCAD is trading in a very clear bearish condition… If you look at the long term charts, you’ll that was clearly rejected from an important resistance level.

Since we know its in a bearish condition, now we need to look at the short term charts and look for a possibility to go short.

If you look at the 1H chart, you’ll clearly see downward pressure, which is exactly the kind of pressure that we are looking to take our trade.

Now, let me show you the 15M chart:

So I’m taking this trade… These are the details of the order:

Entry stop: 2.0012
SL: 2.0059
TP: 1.9414

Did you see where the TP is at? Nope, that’s not a typo…

Whats the risk reward ratio of this trade?

What do you think about what I said before: accuracy vs risk reward ratio?

What other pairs are you trading/monitoring?

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#### Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .

Hi Raul, To be honest m8, I’m gonna give this 1 a miss. It looks like it may be rejected from a LT trendline. I just think there’s clearer charts at the moment. In saying that you don’t seem to be wrong that often.. hahahe. What do you think of AUDNZD m8? I went short last night and its moving in the right direction so far.

• Raul Lopez

Hey Chad! Hope everything is going well…

I dont pay too much attention to trendlines… but the trade didnt work… so that trendline might be doing its thing…

Yep, looks like the AUDNZD is heading south… the short term range isnt that clear though…

But if its going your way, you must have taken the right decision…

Good luck Mate!

• Eric Aroh

Hi Raul,

I have been watching this currency pair, but from a different perspective – as stated below:

1WK chart: up-trend bias, recovering from a re-tracement BUT rejected @ 2.0309 ( an important LT Resistance). However the candle of 09Nov2015 closed Bearish BUT with the following price action characteristics –> 2nd-half price action is bullish (candle opened @ 2.0152, achieved a high @ 2.0309 (and rejected), –> price action moved down to 1.9917 (the low), and finally (the 2nd-half price action) moved UP (bullish) to close @ 2.0010 (about 80+ pips of bullish effort. I expected the next candle to have a bullish bias – from the remnant of the preceding bullish action of 09Nov2015 candle. I am waiting for an inside bar candle to form (within the week) before placing a trade.

1D chart: (Bearish) Pin-bar formed @ 1.9900 (ST/temporary Support). I expect bullish price action towards 2.0309 (LT Resistance) from current 2.0070 – about 230 pips – which is tradable.

Plan:
(a) Trade LONG the current 1D chart for about 100pips (current ATR is 141 pips) OR
(b) Wait out the 1W chart for possible inside bar trade setup (potential 300+ pips)

This is my view/plan.

Thanks,

Eric (from Nigeria)

• Raul Lopez

Hello Eric, I’ve been tryong to get in touch with… have you been getting my emails??

• Eric Aroh

My e-mail system was hacked into. I lost a lot of mails in the recovery process. Thanks

• Raul Lopez

Ahh I see…

• mohamed

hi raul im trading now eurnzd h1 what do thing is it a clear condition ? we have a range .thanks

• Raul Lopez

EURNZD is trading around an important level…

• dominiek

hi Raul,..
I don’t fully agree with this trade… the long term charts are clearly bullish. Guess the sl got triggered very fast if i am correct?

• Raul Lopez

You are correct…