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# Track 'n Trade Futures End of Day

#### Risk Calculator

##### Video Transcript

In this Track 'n Trade 5.0 Futures Trading Training video, I want to start by demonstrating for you, how to take advantage of the Risk Reward Calculator.

Now, what you're seeing up here, is that we've got our Cotton #2 Chart open. You'll notice that there's a nice little wedge formation, right here, at the end. So, if we take our wedge tool, we come in here, and we outline this high point, and this low point- we draw it up there, so we have nice little trend-lines across the top and the bottom. This gives us our Setup.

The Setup is that if the market breaks down and out of the bottom of this trend, we'll Sell and go short. If it breaks up above the top of the trend, we'll Buy and go long.

But we are at, we have our bias that this market is going to go short. So, we don't want to play the upside. We only want to play the downside. But, how far down can this market go? If we use our 50% Tool, we can come in here and we can draw in target area. You can say, well, if the market drops out of this wedge formation and comes just back to the 50% level, then how much money would that be? How much would I be risking? How much profit would I be expecting with my Risk vs. my Reward ratio?

The way we do that is with the Dollar Calculator. I come in here, and if I'm going to get in on a break below, and get out on a break above- then we bracket the market like this. I don't need this top piece, so I can just close it. You can see, that if I drag this bottom piece down, it gives us a profit potential. So, you can see that the distance between where I would get into the market broke down, out of the triangle formation, would be \$850.00, would be our risk. Because if we're wrong and the market breaks down, we get into the market, and it turns around and goes back against us, we would get right back out again, at the top of the wedge formation. So, our loss would be \$855.00. If this market continues lower, my profit would be \$1,830.00, if it made it down just to the 50% level, and that's where we took our profits.

Now, of course, in this market, we can see we've moved the market forward and it did just that. It came down, and it got down to the 50% level perfectly. So, the market dropped out of the bottom of this wedge formation, we did our Risk vs. Reward Ratio, risking \$855.00 for an \$1,800.00 profit potential. The market dropped down, right to the 50% level.

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