Something's Cooking with Tuna

Tuna made a run up yesterday. The 5MA already crossed the 35MA (1), volume is twice volumeEMA (2), stochastics already signal a BUY (4). The only concern is the MACD (3). For some traders, they will wait for the MACD to signal a BUY too. Without the MACD confirmation, it will be a risky trade.

So if you plan to buy TUNA, compute your risk reward ratio before entering a trade. It closed at 2.00 yesterday. Risk is 2-1.86=0.14 and reward is 2.24-2=0.24. Ratio is 0.14/0.24=0.58. It did not pass the 1:3 (0.33) ratio criteria.

What price will give us 1:3 risk reward ratio? Back computing, we get 1.94 as entry price. Risk of 1.94-1.86=0.08 and reward is 2.24-1.94=0.3. Ratio is 0.08/0.3=0.27 which is even better than 1:3. Risk reward ratio of an entry price of 1.96 is 0.35 which is slightly above 1:3.

Therefore the best entry is at 1.94-1.96. Wait for a retracement at 1.94-1.96 or wait for the MACD to cross and signal a BUY.