 Hey guys and gals it's Joe Kelly again This week we are going to talk about applying the risk reward calculator. So last week's episode We introduced that calculator and now we're going to give some chart examples on how to apply it in your trading if you were going to say let's say short the lines that bow talks about and buy the Outer lines that bow talks about so short the upper outer lines and buy the lower outer lines Alright, so if this is our chart Here's what we're going to do when we're going to apply this technical analysis We're just going to break down the chart and the simple support and resistance and once today's Chart opens. We were going to play those outer resistance lines and the outer Support lines long and short and we're going to apply the risk reward calculator based on that. So let's identify our Lines of support and resistance that we would play off of so obviously right here around the 1.5 area This would probably be pretty key Right because you've got you've got resistance and then it acted as support again And then up here around to you've got another line That is an outer line as well. So really your lines here are 1.5 2 and then after 1.5. You can probably expect like 1.3 right here. That's going to be key and Then you're going to go all the way back down here But this is probably let's say that in this example you had probably like some low volume over here or something and That way that you know over here. You're not really focusing on that too much So these are your lines to play off of you've got 1.3 1.5 2 now Let's say that today at the open this opens right about here, okay? And in the morning we get this wash out So since it opens so close to this 1.5 you probably should skip that and look to the outer line At 1.3. So let's say it dips down here Now we're going to go ahead and apply our risk-reward calculator at this point all right, so in this example, we're going to use a percentage of account and We are going to use this with a $5,000 account and We're going to say a 1% risk So that's going to give us a $50 max loss just based on the account size So now let's apply a stop and a profit target so for if we're going to scale around the 1.3 line in that area and We want to target 1.5 our stop Let's pick 1.1. Let's just say 20 cents below the scale zone So that's going to give us an earliest entry of 120 now that is using a three-to-one risk-reward scenario. So what that says is that I have three-to-one risk-reward if I'm risking 110 with a target of 150 and my earliest entry can be 120 and No sooner