Disliked{quote} Hi Jack, how do you determine the optimal entry level? Do you use a take profit projection, and then calculate the maximum acceptable risk based on your preferred 1:5 RR?Ignored

ex:

if you set your entry as per (1)(i) above, Long @1224.88, assuming a position size of 1 lot with a Stop Loss @1215.31, your risk upon entry is 957$.

if you choose option (1)(iii) above, Long @1217.00, assuming a position size of 1 lot with a Stop Loss @1215.31, your risk upon entry is only 169$.

Assuming we close both trades at exactly the same price (whatever the closing price will be - all things being equal), the trade which offers the lowest risk upon entry will also be the one that happens to offer the highest reward - highest payoff.

To make things a little more obvious,

**let's assume we close both trades @1240.00**, we have the following:

on my first entry,** Long @1224.88, **my r**isk was 957$** and my **closing profit is 1,512$** which means a **RR of 1:1.58**,

on my second entry, **Long @1217.00,** my **risk was 169$** and my **closing profit is 2,300$** which means a **RR of 1:13 **(Risk:Reward)

You can see that by significantly reducing your risk upon entry you have also, simultaneously, dramatically increased

**your RR. The optimal option being more than 8x more profitable than the first one**!!

Using the FIA, traders need only "Sell the Highs" & "Buy the Lows".