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Risk & Reward Pro Trade Planning

Every trade starts with planning.

 

“Plan Buy”, “Plan Sell”

 

First, you need to decide to plan a long or short trade. Click on the “Plan Buy” to start planning a long, on “Plan Sell” to start planning a short position.

As soon as you click on the “Plan” buttons, the chart window will show a visual representation of the planned trade and the “Execution”-Section will open:

 

Here we clicked the “Plan Buy” button. Now, the entry, stop and three targets are shown. You can change all price levels by moving the price-lines or the coloured box area. We usually move the chart a little to the left and the box area to the right, this gives the best overview. Whenever you change the distance between the entry and stop price, the volume/lots gets re-calculated to match your max risk parameters.

 

cTrader Risk Reward Trade Planning

 

Pro tip: use the shift button on the keyboard while moving the entry or stop price level to keep the distance between entry/stop constant. The overall volume is then divided by the number of targets and their distribution scheme.

 

Target settings

You can define up to four targets. The volume that gets closed at the target price is given by the percentage you put into the TG1-TG4 boxes. When creating the targets, the tool tries to help you by filling up the missing percentages into the higher targets. Therefore please always start from lower to higher target so that the tool can support you with the calculation.

 

Closer Look

In the example above, the settings are 0.5% risk, 30% at TG1, 30% at TG2 and 40% at TG3. The red area is the stop area with information about the overall trade size and risk. In this case, the stop is set to 12 pips - resulting in 9,46 Lots with max loss of 961.8 which is 0.5% of the account value.

 

Pro tip: check the “Spread” value in the red area to see the current “usual” spread of the chosen Symbol. Take this into account while planning the stop distance.

 

Now checkout the target boxes. You see the information on how many pips the target is away from the entry, how many lots will be closed to meet the percentage for that target.

Example

E.g. for target one, the profit would be 243.67 (-45.54 commissions) = 198.13 and you would achieve a 1:1.2 R for that partial trade. Taking the overall volume into account, the trade would result in a 1:0.29 R at that target. If you check out target two, you see that the partial trade to target 2 will have a 1:2.53 R, while the overall trade gets a 1.05R at that time. Looking at target 3, the last 40% gets closed and this remaining volume will have a 1:3.85R, while the overall trade closes with a 1:2.59R.

Checking out these values will give you a comfortable overview of the overall trade outcome when hitting these targets.

 

Use Dynamic TG1


Target 1 is a special target which can be used in two modes. If you do not select “Use dynamic TG1”, it is acting the same way as TG2-4. You can put in a percentage of your position that should be closed at TG1.

If you select “Use dynamic TG1”, you can define a risk multiplier that should be taken out of the market at target one.  E.g. if you put in a 3 into TG1, the tool will now calculate the volume that is necessary to get a 1:3 Risk/Reward at target one:

 

cTrader Risk Reward Profit Targets

 

As you can see, the tool now calculates the volume that is necessary to get 3R out of the market at TG1. In this case, it needs to close 5.15 lots to reach the 1:3 R/R. The remaining lots are then divided by the given percentage of TG2-4. In this case, 50% at TG2 and TG3. After playing around with the parameters and the price levels, it should be easy for you to plan a trade and get all necessary information before actually entering the market.

 

Use limit orders

You can uncheck “Use limit orders”. In that case, the tool will use the current price as the entry price and recalculates all values for each incoming tick.

In addition, it will now use market orders instead of limit orders if you decide to execute the trade.