Using TradingView Long Short Tools
The risk reward system is a system where you calculate how much you stand to lose and how much you stand to gain on a position before you enter a trade. It is very important to consider the amount you will lose here. So calculating this risk reward ratio is very important. One of the best tools for calculating the risk reward ratio is the Long Position and Short Position tools in TradingView. With these tools, you can very easily adjust how much you can lose on a trade, how much you can gain, how much you can earn, the R systems.
When you enter TradingView, look at the toolbox on the left side, if you press and hold this icon, you will see two options called Long Position and Short Position.
For example, I click on the Long position and I click anywhere in the chart area. See, when I click anywhere, I will see a shape with two different colors. You may have different colors for this. These colors are completely customizable colors.
There are various values here. And by double-clicking on these values, we can first make our settings. In line with these settings. it will be much more accurate to examine them. In the Account Size section, you first specify how much your balance is. For example, you have a balance of 1000 dollars and you want to make an R:R system, a risk management over this 1000 dollars and let’s say you risk 10 dollars in every trade you enter. You are writing your balance here. In the risk section, you indicate how much you want to risk. As I just mentioned. We set it so that we lose 10 dollars after the position is closed. If you wish, you can also calculate this as a percentage, not USDT. One percent of 1000 dollars is 10 dollars. You can also calculate it directly as an amount. If you write 10 here, it will already be one percent of your balance. These values may change according to your setup.
Now let’s close here by clicking the Ok button and pretend that we are entering a sample trade here. Let’s set it up like this. For example, of course I know how the position will go, but the purpose here is to explain the reward earning system and how to use this tool in TradingView. Now I have built such a position and in exchange for this position I have an R of 10 dollars. So if the price comes here, goes down and crosses this line, I will lose 10 dollars on the downside. But no, how much will I earn if the price comes here, goes up and crosses this line. We can see it here. Look, it’s showing 3.92R right now. 3.92 is the R of this position. Look, as I increase it, it goes up, and as I decrease it, it goes down. If I lose on this position, I will lose 10 dollars, if I win, I will win 4*10 dollars, that’s 40 dollars, and when I lose, my balance, we just mentioned in the settings that my balance is 1000 dollars, it will drop to 990 if I lose. If I win, my balance will increase to 1040 dollars. We can see this information here.
There will be an eight percent increase, and what he mentions as 0.022 is the amount we will write in the Quantity section, that is, the quantity section, when entering this trade through Binance or exchanges such as FTX. If we write these values correctly, we will manage the risk. When we lose, we lose 10 dollars, when we win, we win 40 dollars.
Now I’m going to move the position forward a little bit, see when I move the position forward, the darkness that you see here means that it has entered the trade. It’s now entered the trade and it’s below where I entered the trade, so it’s showing me the darker color below. I’m moving it forward a little bit, it hasn’t touched the stop line. And then it’s going to go up. And when it goes up, sometimes it’s darker here, sometimes it’s green. Right now we see the green color because it means it’s in the profit. When I move it forward like this, it goes completely into profit. And this tells us that the trade is TP. If I had shown the stop point of this position here instead of here, look, the TP part would have disappeared, we would have stopped out directly here. So after the stop, there is no point for us to go to TP anymore since the position is closed. This is how the long position tool is used in TradingView.
And then there is the opposite. The short position part. When we use this tool, we use this tool thinking that the price will go up. If we think that the price will go down, the tool we should use is the Short position tool. Because we expect the price to go down. Let’s assume I’m setting up a plan in this way. Look, this time the stop point is up. All values are the same. If I stop here, I will still have 990 dollars. Because we just set $1000, but you may need to set it separately for this tool. Let’s update here, $1,000 and $10. Because we had an R for $10. And after I become a TP, according to the R:R system, this is 1.97. So if I become a TP, I will earn 1.97 multiples of an R. This will add 19 to my capital.
This information may seem a bit complicated. You can understand it much more easily by drawing it yourself on TradingView. Write down how much you are willing to risk and think accordingly. This way, this R:R system will become much more familiar to you. That’s how to use these tools in TradingView. They are already very easy to use. Just to learn them better. You need to adopt the R:R system, the risk management system.
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