Now, I will tell you how you can calculate the risk and reward on the bullish engulfing pattern that
you are trying to trade.
So we have seen two filters where you have to initiate a trade when market is falling.
That was take one and second market open bullish.
That was tech, too.
So these two techs were there.
Now we can consider this trade.
But the third filter that we have to apply here is that this reward, risk reward is not favorable and
we are not going to make this trade.
So I told you, for risk reward, we have to use two metrics.
That is ETR average to range for finding out the risk and the resistance to find out the reward.
So let's quickly do this on Isba and see whether we can take this trade or not.
So as I told you that, first we have to calculate the risk that is involved.
So our stop loss will be one if they are below the low of this scandal.
So this is the low of our previous scandal.
So one ETR below.
So what is the ETR currently as far as this scandal is concerned?
There is approximately 10 on the right side and the low is to seventy four to seventy minus 10.
That is 260 to 260 will be our stop loss point, so let's put this stop loss point on the chart.
So this is where we have stopped loss to 60.
This where we will exiting laws and how you calculate the profit profit is next registered.
So what are the next results?
This one, because this is the level from where the market reverts to this level, registered the price
to go up.
So this will be our immediate target.
So you can see somewhere here.
OK, so 309 310.
This will be our.
Profit target.
Now, when we are going to make entry, we are going to enter at this point because this is where market
open bullish.
So this is our entry point.
This is our stop loss.
This is our target.
Now, we will calculate whether the risk reward is in our favor or not.
This is the point.
And, uh.
This is the race.
This is the war.
So as you can see, this reward is almost zero point nine five something which is almost one to one.
Very tight one, but we can go for it.
OK, so it is not very adverse, one point risk, one point the world, so we can initiate this drill
and you can see kind of it achieved its target within a day or so.
Next can achieve the target.
So this is an example where we traded the bullish engulfing successfully.
I'll give you another example, Reliance Industries.
So we saw that on the lens industry.
This was bullish engulfing and it came in falling market and this scandal was bullish.
We can consider this trade, but now let's see if we can see the risk reward then.
Is it lucrative or not?
So quickly calculate the.
Stop loss here.
This is the law and it is sixty nine, almost seventy one eight three seven minus 70, so one seven,
six, seven.
This is the stop loss level one seven, six, seven.
You can always adjust the level one seven, six, seven, so this is where we will exit in Los Angeles,
market with rate and profit is next immediate resistance.
Now, you may confuse next immediate resistance with this, because this is the immediate resistance
that you can see.
But this is this will be long, because if you trade long enough in the market, you'll understand that
the support of the previous support becomes resistance.
So in this case, you can see this was the support level from which the market bounced many times.
So normally you will find out that this support level will act as a resistance.
OK, so this support support becomes resistance if you know the situation.
So basically our target will be to 075 since this is an immediate resistance and at what point we are
entering, we're entering here.
But as I told you, that you don't have to at the end of this of enter at the open of this candle,
which was green.
So now if we put.
The risk reward equation here, you can see this is our risk and this is the reward that we are taking.
And you can see that this reward is zero point six for which is adverse.
We are taking a risk of one rupee to gain reward of zero point six four.
So this is not a good risk reward ratio.
We can ignore this trade.
We can look for another another trade.
The market will give you ample opportunity.
There are more than 6000 companies on BSE and more than one thousand nine hundred companies on NSC.
And in that also you will see 300 to 400 companies.
They are very good and liquid companies with good volumes.
So you will get one to two bullish engulfing Hanmer, bullish, piercing, etc. in a week, easily you
will get so even if you get hold of at least one to two of such patterns among these two three shares,
then it will work for you.
So as far as this trade is concerned, I am not going to interrupt because you can see that market went
up and it took this support as a resistance once and twice.
And you can see this is the third time it happened.
So this is the fourth time.
So this is what happened and this is what we have to consider while calculating the risk reward ratio.
I hope you understood this.
Let's move on now to the next candlestick pattern that is bullish piercing.