On April 8th, 2016, we received an Ichimoku 4 time frame Buy email alert on ASHM-LON, ASHMORE GRP for the UK FTSE Stock Market. The email alert is shown below:
We had a multi-time frame support around 283, on pretty much every time frame that we look at. We had an opportunity to take a breakout or pullback. Problem with breakout was we did not have a 1 to 1 reward to risk, which means we can’t take the breakout. So we looked at the pullback and we had a reward to risk greater than 3 to 1, which means we can take the trade.
Our entry was 283 with a stop at 281 and the preserve mode at 292. The 292 level can be used as a target also, in which case you would be out at that level with a 4.5 to 1 initial reward to risk ratio. However if you see the potential for a breakout from that level, you can set the level as a preserve mode, meaning that you tighten up your stop to protect profits. In this case if we used it as a preserve mode we would have taken it up to 307, giving us a reward to risk of 12 to 1.
See chart below for setup….
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