Hi there Alan
You're assessment of that "trade" was pretty much right on. I should however clarify the intitial stop/risk component. When (which is very rare)I put on a longer term trade I always put in what I refer to as an "account saving" stop the moment the entry is filled. This by no means says that is my "line in the sand" stop. I just chuck it there in case something goes horribly wrong right out of the gate. I immediately look to tighten stops as soon as possible. To illustrate this point, let me tell you what happened to me not to long ago. I had just been filled long on a multiple contract russell trade... I think 5 contracts. Literally, 10 seconds after the fill I was down and stopped out for an 1,800 whack. And thank god thats all it was! It continued to plunge. That was the day that idiot flew his plane over the White House. The bid totally fell out of the market. Totally unforseeable. Since that lesson, once in a trade, I wait to make sure the market is behaving as expected, then I tighten up. The point is the "REAL" RRR, was actually 3-4:1 as you noted. The huge stop was only protection for the first 5 or so minutes of the trade.
As for the target of 1294, yes, that was a mathematically derived target - not S/R.
Hope that helped.
RobT