Quote:
Originally Posted by rds1933
In the Double Bottom Example, Trade Target has been shown as 174 points that is ten times the gap between the bottom resistence line and the trough line (17.4 points). May it be assumed that the trading target in such a case is ten times normally. In this example, the top achieved is only 346 level giving a gain of only 47 points from the entry point. Now, this is too far from the trade target of 174 points. Please explain this point.
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Hi rds1933,
Welcome to the community.
Normally a one point move is the smallest move that a financial instrument can make. So with this in mind a move in my example from 17.4 to 17.5 is a one point move. Another way of looking at it would be that a move from 17 to 18 is a 100 point move. So the gap here is 174 points as well as the target.
As to your question about the entry price, the entry price on the chart is 297.4 so the target would be 297.4+17.4 which would equal 314.8. So I think the confusion on this one lies as well with the full move is not 47 points but 470.
Let me know if that does not make sense.
Best Regards,
Dave