Quote Originally Posted by Billy View Post
Buzz,
The 3:1 reward/risk ratio to find the optimal multi-pivot limit entry is totally independent of the optimal (ATR-based) stop used by the robot to manage the risk of its positions.
The multi-pivots methodology 3:1 RR ratio uses the strongest resistance and the strongest support in the first clusters as references. Today’s strongest resistance is the 200 dma (77.72) with a strength of 7 and the strongest support is SS2 (72.33) with a strength of 6.
A long entry at 73.67 gives you (77.72 – 73.67 = ) $4.05 reward to the strongest resistance and (73.67 – 72.33 =) $1.34 risk to the strongest support. This is today’s multi-pivot 3:1 RR ratio for a long entry. I let you do the math for a short entry 3: 1 RR as an exercise.
Billy
Billy, based on your earlier comment ("The fresh IWM weekly pivot and floor levels will likely guide intra-week support and resistance without much impact from other timeframes."), I don't see why the RR ratio should necessarily use the SS2 & 200dma as sup/res references. In general, wouldn't the robot trade timeframe (whatever it is, since it's unknown) determine which pivots are the true references?

Trader D