Market Mechanics Ep 20: Where to Place Your Stop Loss & Take Profit — Transcript

Full transcript

1. 0:00A lot of traders spend so much time
2. 0:03learning how to enter, but almost no
3. 0:06time learning how to manage the trade
4. 0:08once they're actually in.
5. 0:10And that is a huge mistake. Because
6. 0:12amateur traders obsess over entries and
7. 0:15professional traders obsess over exits.
8. 0:18A good entry alone does not make you
9. 0:20profitable. It's just half of the
10. 0:22equation.
11. 0:23If your stop loss is in the wrong place,
12. 0:25your take profit makes no sense, or your
13. 0:27trade management is emotional, then you
14. 0:30can have the best entry in the world,
15. 0:31but you will still fail. So, in this
16. 0:33lesson, I want to break down how to
17. 0:36actually manage your position properly,
18. 0:39including where to place your stop loss,
19. 0:42where to place your take profit, and how
20. 0:44to think about trade management in a way
21. 0:47that is structured instead of emotional.
22. 0:50So, with that being said, let's go on to
23. 0:52the charts and talk about where to place
24. 0:53your stop loss and your take profit. For
25. 0:55context, this was the first trade I've
26. 0:58taken in April.
27. 1:01Yeah, this was the first trade I've
28. 1:02taken in April, right here.
29. 1:06Uh and I think we got about, yeah,
30. 1:08almost three hour on this trade itself.
31. 1:11So, let me quickly like walk you guys
32. 1:13through like the thought process for
33. 1:14this.
34. 1:15Once again, from entries to exits. Okay?
35. 1:18So, like everything and I'm just going
36. 1:20to give you guys extra tips while I'm
37. 1:21going through that. So, if you look at
38. 1:23this right here, internal structure is
39. 1:25bullish, swing structure is also
40. 1:28bullish. So, if you're looking for
41. 1:29shorts right here,
42. 1:31you must really manage your expectation,
43. 1:34which means you can't swing for the
44. 1:35fences and try to target like all the
45. 1:37way down here. It just doesn't make
46. 1:39sense. Because, once again, you are
47. 1:41already going counter against
48. 1:42everything. So, first of all, do not do
49. 1:46this. Do not try this at home if you are
50. 1:49a beginner. If you're a beginner, stay
51. 1:50away from this trade. I would not advise
52. 1:52you to trade against the internal order
53. 1:53flow and also against the higher time
54. 1:56frame order flow. Basically, just trade
55. 1:59the price action, which is the most
56. 2:01obvious to you.
57. 2:02Because most often than not, the price
58. 2:04action, which is the most ob- obvious to
59. 2:06you, is also the most beneficial to you.
60. 2:10Okay, so write this down somewhere.
61. 2:12The price action that's the most obvious
62. 2:14to you,
63. 2:15it's often also the most uh it's also
64. 2:18the most beneficial to you, right? It's
65. 2:19also the one that is like the most high
66. 2:21probability, right? So, in this case, as
67. 2:23much as possible, if I were you and I'm
68. 2:25a beginner, I'm going to try to look for
69. 2:26longs, which means I'm going to look for
70. 2:28longs at all of these demand zones right
71. 2:30here to trade with this internal
72. 2:31structure.
73. 2:33Number two, for the intermediate
74. 2:35traders, for the advanced traders who
75. 2:36want to, you know, take advantage of the
76. 2:38counter trend, right? Get scalps just
77. 2:40like this.
78. 2:42And bear in mind, if you are trading
79. 2:44against everything, you want to manage
80. 2:46your expectation.
81. 2:49It's very important for you to know
82. 2:51exactly where to get out if you are
83. 2:53wrong,
84. 2:54and also where to get out if you are
85. 2:55right.
86. 2:57This is something that I like to nail
87. 2:58on.
88. 2:59Is that amateur traders focus on
89. 3:01entries, professionals focus on exits.
90. 3:05Because exits is what make you the money
91. 3:07or cause you to lose a little bit of
92. 3:09money.
93. 3:10So, exits
94. 3:12is the hard part, right? Which means
95. 3:14that if you don't manage your
96. 3:16expectation, you try to target like here
97. 3:17or here or here or some random place
98. 3:19that you think price will go,
99. 3:21there's a very high chance that you're
100. 3:22going to get stopped out
101. 3:24sooner or later, and you're going to
102. 3:26like kick yourself in in in in the
103. 3:28balls, right? Just because like you
104. 3:30place your exit at the wrong place. So,
105. 3:32second tip, if you are trading this sort
106. 3:34of setups, manage your expectation.
107. 3:37All right, manage your expectation.
108. 3:39Now, let me just go through the entry,
109. 3:41right? So, why would I enter for a sell
110. 3:43right here, even though it's counter
111. 3:45against everything?
112. 3:46It's because if I'm scalping right here,
113. 3:50this is actually pro internal order flow
114. 3:52for me, right? So, I'm actually trading
115. 3:54with the internal order flow. It's just
116. 3:56that I'm looking at it with from the
117. 3:59lens of a scalper. I'm looking at price
118. 4:01on the 1-minute time frame.
119. 4:03So, yeah, super duper aggressive scalp.
120. 4:06This is a scalp. This is scalp a mixture
121. 4:08of scalp and an intraday trade, right?
122. 4:10So, once again, let's let's take it one
123. 4:12step back first. If you look at a
124. 4:14structure, bullish. Internal structure
125. 4:17shifted bullish right here. Fractal
126. 4:18market shift, internal breaker
127. 4:19structure, everything is bullish right
128. 4:21here.
129. 4:22And just by doing this alone, I know
130. 4:23that this is my swing low and this is my
131. 4:26swing high. Right? So, this is the range
132. 4:28that we are trading within.
133. 4:30And right now, when I see price being
134. 4:32super extended just like this,
135. 4:35like you guys,
136. 4:36like I told you guys a thousand times, I
137. 4:39don't ever take FOMO trade. This is a
138. 4:41lesson I've learned the hard way from
139. 4:43losing a lot a lot a lot a lot of money.
140. 4:46I don't ever look for
141. 4:48long position when price has already
142. 4:49made a significant move just like this.
143. 4:53So, if I'm not looking for longs and I'm
144. 4:55want to look to like scalp this move
145. 4:57right here, what I want to do is to play
146. 4:59the counter trend, right? I want to play
147. 5:01the pullback to like each one of these
148. 5:03demand zone right here. Because like I
149. 5:05said, because of gravity, price will
150. 5:07eventually starts pulling back. It could
151. 5:09pull back to this demand zone or this
152. 5:10demand zone. Whichever demand zone that
153. 5:13is within this discount pricing. That's
154. 5:15just how the market fundamentally move,
155. 5:17right? That's just why price move. Okay,
156. 5:19like that's it. So, if that's the case,
157. 5:21then I know
158. 5:24like with a high degree of certainty
159. 5:26that price will make a pullback to at
160. 5:29least this demand zone.
161. 5:31At least this one. I don't know whether
162. 5:33price is going to pull back to this one,
163. 5:34but I know for a fact that it's going to
164. 5:35pull back to this one. Because of the
165. 5:37fact that we got this overextended move
166. 5:38to the upside. And this is the nearest
167. 5:425-minute demand zone.
168. 5:45So, if at some point of time, price
169. 5:47starts running out of buying momentum
170. 5:48and buying pressure right here, guess
171. 5:51what? It's going to come back to this
172. 5:53gas station right here at this next
173. 5:555-minute demand zone to get a more fuel
174. 5:58before it continue pushing to the
175. 5:59upside.
176. 6:00And if there's not enough fuel at this
177. 6:02gas station, then it's going to continue
178. 6:04going down to the next gas station,
179. 6:05which is this demand zone to get more
180. 6:08fuel and then move to the upside.
181. 6:11So, long-term wise, higher time frame
182. 6:13bias wise, I'm still bullish. No doubts
183. 6:15about that. But short-term, I'm bearish
184. 6:18because I know for a fact that price is
185. 6:20going to start pulling back. And if I
186. 6:21know that, why don't I play this move to
187. 6:24the downside?
188. 6:25Since I'm a scalper, right? I'm looking
189. 6:27to get in and out within a few minutes,
190. 6:29within a few hours. I'm not interested
191. 6:32in holding this trade for long. Right?
192. 6:34So, this is where I'm thinking to
193. 6:36myself, okay, I'm I'm trying to play
194. 6:37play this pullback right here.
195. 6:40But now, the next question becomes like
196. 6:42where is the optimum point of entry?
197. 6:44Because it's very difficult to try to
198. 6:46predict the top of the market. If you
199. 6:47enter for a sell right here, there's a
200. 6:49chance that price will just make a tiny
201. 6:51pullback and just continue going up. And
202. 6:52then you'll get stopped out. Right? So,
203. 6:55you want to make sure that you wait for
204. 6:57extra confirmation. So, once again, I'm
205. 7:01approaching this
206. 7:02from a scalping standpoint. And since on
207. 7:05a 5-minute time frame, I don't see any
208. 7:07fractal low right here. The most recent
209. 7:09fractal low I can see is right here.
210. 7:12Okay, so if price take out this fractal
211. 7:13low, then yes, price is going to pull
212. 7:15back to this area right here.
213. 7:18But what about right now? If I don't see
214. 7:20a fractal low right here, then my next
215. 7:22natural approach is to go down to my
216. 7:251-minute time frame and try to identify
217. 7:26my fractal market shift over here.
218. 7:29So, this is where you can see. This is
219. 7:31the last 1-minute fractal market shift.
220. 7:33So, the minute price take out this low,
221. 7:36we know for a fact that price is going
222. 7:38to pull back to this area right here,
223. 7:40this next demand zone right here.
224. 7:43And if I get an internal break of
225. 7:44structure to the downside to validate
226. 7:45this market shift, then boom, I'm going
227. 7:48to be very confident to play the
228. 7:49pullback to the downside right here.
229. 7:51Because this is where I know for sure,
230. 7:54right, the pullback has officially
231. 7:55occurred and it's going to come down to
232. 7:57this area that I have down here.
233. 8:00So, in this case,
234. 8:02this is 3:30 p.m., right? So, this is
235. 8:05like when London session actually
236. 8:07opened, 30 minutes into London session.
237. 8:09And over here, I was very patient, you
238. 8:12know, not doing anything. In fact, I
239. 8:13literally just came back from the gym
240. 8:15after doing like a push day, and I saw
241. 8:18the price action like
242. 8:20right here. I remember I remember
243. 8:21pulling up the charts and I saw price
244. 8:23like somewhere around here.
245. 8:24And I was just looking for my entry over
246. 8:26here. I was just being very patient,
247. 8:28just waiting for the market to come to
248. 8:30me.
249. 8:30Once again, another tip, write this down
250. 8:32somewhere. Never ever chase price.
251. 8:36Whatever you chase runs away. Same thing
252. 8:38as money, same thing as whatever, right?
253. 8:41That's just the fundamental law of the
254. 8:43universe, right? Whatever you chase runs
255. 8:45away.
256. 8:46And the worst part about chasing is that
257. 8:47you get a entry. If you chase
258. 8:50price, you get a bad entry.
259. 8:51If you chase price, you enter for a sell
260. 8:53right here, you have to place a stop
261. 8:54loss above this high, you got a
262. 8:55entry. So, never ever chase price. Let
263. 8:57price comes to you, right? So, do your
264. 9:00analysis, do your chart markups, you
265. 9:01will know that since we just got a I
266. 9:03boss, validate this fractal market
267. 9:05shift, internal structure shifted
268. 9:07bearish, and now I'm looking for short
269. 9:09because once again, internal structure
270. 9:11has shifted bearish.
271. 9:13And I'm still trading with the internal
272. 9:15structure,
273. 9:16right? Because I'm approaching this
274. 9:19from the lens of a scalper.
275. 9:20So, in this case, very patiently doing
276. 9:23nothing right here, still doing nothing,
277. 9:25right? Price has made this bearish
278. 9:26candlestick right here.
279. 9:28A lot, 90% of the retail traders,
280. 9:30including myself last time, would enter
281. 9:32for a sell right here.
282. 9:34But now I understand liquidity,
283. 9:37it's a different story. Now I'm like,
284. 9:39"Okay, cool. Let me try to identify the
285. 9:40liquidity points." Because another thing
286. 9:43that Brett has said repeatedly in all of
287. 9:45his lessons is that no liquidity, no no
288. 9:47entry.
289. 9:49No liquidity sweep, no entry.
290. 9:51So in this case, price does this, I'm
291. 9:53not going to enter for the trade.
292. 9:55Because there is no liquidity sweep.
293. 9:56Like where's the liquidity?
294. 9:58Well, there's liquidity above this high.
295. 10:01And now price has just created a new
296. 10:02high right here, which means there's
297. 10:04also liquidity being built up above that
298. 10:05high.
299. 10:07So I'm waiting there very patiently
300. 10:09waiting for that to get swept out.
301. 10:12And also most importantly, I'm waiting
302. 10:14for price to come up to my point of
303. 10:16interest.
304. 10:18Like I said, you don't chase price. You
305. 10:19wait for price to come to you. And you
306. 10:21wait for price to come to your point of
307. 10:22interest.
308. 10:24So in this case, price over here haven't
309. 10:26mitigated my supply zone. So chill. The
310. 10:28minute price mitigated my supply zone,
311. 10:30boom, now I'm interested.
312. 10:32So now
313. 10:34I'm looking for the aggressive entry in
314. 10:36this particular situation.
315. 10:38Why the aggressive entry? Because
316. 10:41internal structure is on my side.
317. 10:44And this is where we can also see the
318. 10:45push and pull inducements being swept.
319. 10:48So this is actually a high probability
320. 10:50scenario.
321. 10:52If the internal structure is not on my
322. 10:53side, then I'm looking for the
323. 10:54conservative entry. Right? If the market
324. 10:57situation is just telling me that huh
325. 11:00it's like it's like hmm I don't know
326. 11:01whether I'll enter for aggressive more
327. 11:04entry model right here, then I'll
328. 11:05probably go for the conservative entry
329. 11:07model. But in this case, because I'm so
330. 11:09confident that the internal structure is
331. 11:11really good bearish and we are in this
332. 11:13high probability scenario where there's
333. 11:14all the liquidity in the world has been
334. 11:15swept,
335. 11:17I'm more than happy to deploy the
336. 11:19aggressive version of the entry model.
337. 11:21So the minute price went up there, swept
338. 11:22the high right here, swept the high on
339. 11:25the left-hand side, right? We got both
340. 11:27liquidity push pull inducement being
341. 11:29swept. Price comes up to this supply
342. 11:31zone, internal structure of bearish.
343. 11:34All the stars in the entire universe is
344. 11:36literally lighting up for me to actually
345. 11:38enter for the trade. This right here is
346. 11:42a A setup. I wouldn't call this a A+
347. 11:44setup, but I'll call this as a A setup.
348. 11:46So, I pretty much waited for price to,
349. 11:48you know, give me like a bearish
350. 11:49confirmation just like this on the mini
351. 11:51price mitigated this zone, and then this
352. 11:53is where I look for shorts, and I place
353. 11:55my stop loss above this supply zone.
354. 11:58Now, the next part I want to talk about
355. 11:59is the exits. Let me give you a tip. All
356. 12:01right, let me give you a tip. Often too
357. 12:03greedy with my exit. That's the problem
358. 12:05right there. Let me give you guys a tip.
359. 12:08When it comes to your exit,
360. 12:10you basically just want to exit
361. 12:13at the price point
362. 12:16in which, based on your research,
363. 12:20price is most likely going to get to.
364. 12:23That's it.
365. 12:25I don't think anyone has explained to me
366. 12:27in that manner before, but that's it.
367. 12:32And the key word here is
368. 12:34based on your research where the market
369. 12:36is going to hit towards next, not where
370. 12:38you think it will hit towards next,
371. 12:40based on where the market is heading
372. 12:43towards next.
373. 12:46So, first thing is let's talk about the
374. 12:49take profit, right? Which is where to
375. 12:50exit if the trade goes well.
376. 12:53Well,
377. 12:54a lot of people, they they're looking at
378. 12:56this trade right here, and they're going
379. 12:57to place their take profit like all the
380. 12:58way down here.
381. 13:01You know, they convince themselves, "Oh,
382. 13:02price is just going to go down here."
383. 13:05Right? Or what they tend to do is that
384. 13:06they maybe they place it down here, or
385. 13:08maybe they place like somewhere around
386. 13:09here in the middle of nowhere.
387. 13:12But like I said, this is not where the
388. 13:14market is going to hit towards next.
389. 13:16You want to ask yourself right now,
390. 13:18where is the market going to hit towards
391. 13:19next for sure? What is the internal
392. 13:21structure telling us? What is the price
393. 13:23action telling us? If I'm entering for a
394. 13:25short right here,
395. 13:28bare minimum, price is going to come
396. 13:30down here. Okay? Absolutely no doubt
397. 13:32because this is the next 5-minute supply
398. 13:34zone.
399. 13:36I know, 5-minute demand zone.
400. 13:39Okay, this is the next 5-minute demand
401. 13:41zone.
402. 13:44Now, if I'm a scalper,
403. 13:47as much as possible,
404. 13:49if I'm entering the trade on the
405. 13:501-minute time frame, I'm placing my take
406. 13:53profit at either the next 1-minute
407. 13:55demand zone
408. 13:57or supply zone or the next 5-minute
409. 14:00supply demand zone.
410. 14:01But, I won't try to target the next
411. 14:041-hour supply or demand zone.
412. 14:06There's a time frame misalignment.
413. 14:08There's a mis- alignment of expectations
414. 14:10there. Right? Because you can't be
415. 14:13Okay, like you can if you're like
416. 14:15really, really good in terms of like,
417. 14:16you know, identifying the structure.
418. 14:19But, majority of the times, you cannot
419. 14:21try to target
420. 14:23where you would target as a swing trader
421. 14:25if you're entering as a scalper.
422. 14:28Once again, only caveat here is that you
423. 14:30can if you really understand what you're
424. 14:31doing. Then this is where you capture
425. 14:33those sniper entries, 1:50 R trade,
426. 14:36whatever, which is incredibly,
427. 14:37incredibly rare.
428. 14:39Majority of the times, you just want to
429. 14:40manage your expectation and just place a
430. 14:43take profit
431. 14:45on the time frame that you enter the
432. 14:47trade on.
433. 14:48So, if you're entering the trade on the
434. 14:491-minute time frame, you place a take
435. 14:50profit based on the 1-minute time frame
436. 14:51structure.
437. 14:53If you're entering the trade on the
438. 14:545-minute time frame, you place a take
439. 14:56profit based on the next 5-minute
440. 14:58structural high or low or the next
441. 15:005-minute supply demand zone.
442. 15:04Trust me. Just by doing this one change
443. 15:07to your entire trading plan,
444. 15:09you will
445. 15:10reduce the amount of unnecessary losses.
446. 15:13You will increase the frequency of you
447. 15:14hitting TP.
448. 15:17Because this is something that
449. 15:18fundamentally just changed the way that
450. 15:20I trade.
451. 15:22It's to just manage my expectation and
452. 15:23just be a little bit pessimistic when it
453. 15:24comes to my TP.
454. 15:27So, in this case right here
455. 15:29if you are super duper conservative,
456. 15:32right? Next 1-minute demand zone, this
457. 15:33one right here. You can just place a
458. 15:34take profit right here. 1:2 are good
459. 15:36enough, right? You get out right there.
460. 15:39But, if you're a little bit more
461. 15:40confident, you can place it at the next
462. 15:425-minute demand zone, right? Which in
463. 15:43this case it's going to be like
464. 15:44somewhere around here. This is the next
465. 15:455-minute demand zone right here. Because
466. 15:48you can see this exact demand zone on
467. 15:49the 5-minute time frame as well. Right?
468. 15:51So, this is the next 5-minute demand
469. 15:52zone.
470. 15:55Now, if price were to take out that
471. 15:565-minute demand zone, then there's a
472. 15:57chance that it's going to go to the next
473. 15:595-minute demand zone, which is this one
474. 16:00right here. All right? Which is this
475. 16:02other obvious 5-minute demand zone right
476. 16:04here. Right right here.
477. 16:07So,
478. 16:09that's my best tip for you guys when it
479. 16:10comes to your take profit.
480. 16:13Is to just place your take profit at the
481. 16:15next opposing supply and demand zone or
482. 16:17the next structural low or high
483. 16:20that is either on the same time frame
484. 16:22that you make your entry on or just one
485. 16:25time frame above your entry time frame.
486. 16:27Now, that's for the take profit.
487. 16:29Now, for the stop loss
488. 16:30bro, very simple. Like I always say, you
489. 16:33just want to place it at a price point
490. 16:35which invalidate your trade idea.
491. 16:37So, it's like what is the price point
492. 16:39that if price gets to
493. 16:42prove that your trade idea is wrong.
494. 16:44Prove that your hypothesis is wrong.
495. 16:47That is the question that I always ask
496. 16:48myself before I enter for a trade.
497. 16:50Before I actually press the buy and sell
498. 16:52button, I need to know exactly where I'm
499. 16:54getting out if I'm wrong.
500. 16:56So, in this case, where's that price
501. 16:57point?
502. 16:58Well, it needs to be at some form of
503. 17:00protected high.
504. 17:01Right? It needs to be at a high that
505. 17:03swept liquidity. Because that's the
506. 17:05institutional level where price is most
507. 17:08likely going to respect.
508. 17:11And if price take out that level, then
509. 17:12there's a chance that either a next
510. 17:14liquidity sweep is going to happen
511. 17:16or the entire structure is just going to
512. 17:18shift bullish and my trade idea is
513. 17:19wrong.
514. 17:21So, it needs to be at some protected
515. 17:23high or protected low.
516. 17:25And another thing is is it at like
517. 17:28ideally I want to place it a few pips
518. 17:31above the supply demand zone that I
519. 17:32entered the trade on. Right? So, in this
520. 17:34case this is the supply zone that I
521. 17:35entered the trade on. I'll place it a
522. 17:37few pips above it. I wouldn't place it
523. 17:39right above it because
524. 17:41there's a chance for price to make a
525. 17:42pullback and when it does you're going
526. 17:43to get wicked out. You're going to get
527. 17:45stopped out. Later on price will go down
528. 17:46in a way. In this case using that that
529. 17:48two logic in mind, right? Your protected
530. 17:51high and low and also your supply zone.
531. 17:54First of all, protected high. Right?
532. 17:55This right here becomes the new
533. 17:57protected high. Before this high has
534. 17:59been established, before it swept the
535. 18:00liquidity, where is the next protected
536. 18:02high? It's going to be this one right
537. 18:04here.
538. 18:05Because this is where price went up
539. 18:06there, swept the liquidity and then
540. 18:07started going down. So, this is the
541. 18:09protected high.
542. 18:10So, if this haven't been formed, I will
543. 18:13probably if I enter somewhere around
544. 18:14here or here, I'm placing my stop loss
545. 18:17above this protected high since that's
546. 18:19the highest point that swept liquidity.
547. 18:22But right now since price has already
548. 18:24swept liquidity above this high and
549. 18:25above this high, this becomes the new
550. 18:27protected high.
551. 18:29Which means that I can place my stop
552. 18:30loss a few pips above this high right
553. 18:31here.
554. 18:33All right, just a few pips above this
555. 18:34high.
556. 18:36And then for my take profit, uh no, and
557. 18:38then for for the second part which is
558. 18:39the supply zone, right? So, in this case
559. 18:41this is the supply zone that I'm
560. 18:42entering the trade on.
561. 18:44So,
562. 18:46as much as possible, I want to give you
563. 18:48a little bit of breathing room if I'm
564. 18:49actually placing my stop loss based on a
565. 18:51supply zone.
566. 18:52So, this could be like
567. 18:54the worst-case scenario, right? If there
568. 18:56is no protected high right here. Let's
569. 18:57say price did not sweep the liquidity
570. 18:59right here
571. 19:00and it's just a normal high.
572. 19:02And in this case I got two choice. I can
573. 19:04either place my stop loss above the
574. 19:06protected high right here
575. 19:08or I can place it a few pips above the
576. 19:09supply zone.
577. 19:11And if I place it a few pips above this
578. 19:12supply zone, this will give me a much
579. 19:14better risk-to-reward ratio compared to
580. 19:16placing it above this protected high.
581. 19:19So, that is where I will go to the
582. 19:20latter option and just place it above
583. 19:21this high right here. So, the rule is if
584. 19:24there is a protected high, place it
585. 19:26right there.
586. 19:27If there is no protected high, place it
587. 19:30at either the nearest protected high
588. 19:33that was formed in the past
589. 19:35or a few pips above a supply zone if
590. 19:39you're selling or few pips below a
591. 19:40demand zone if you're buying.
592. 19:44Whichever one that is
593. 19:46nearer, right? Whichever one that offers
594. 19:48you a better risk-to-reward ratio. So,
595. 19:51hopefully after this lesson, you can see
596. 19:53that position management is not just
597. 19:55something that you figure out after you
598. 19:57enter for the trade. It should already
599. 19:59be part of your plan before you even
600. 20:02take the trade.
601. 20:03Like I said, a good trade is not just
602. 20:05about finding the right entry.
603. 20:07It's also about knowing where the trade
604. 20:10is going to go wrong and where the trade
605. 20:12is most likely to react and how to
606. 20:15manage it without letting emotion take
607. 20:18over.
608. 20:19That is why your stop loss should never
609. 20:21be random. It shouldn't be based on
610. 20:22where you feel you should be placing it
611. 20:24at. Same thing as a take profit. It
612. 20:27should never be based on hope. Okay, I'm
613. 20:29hoping price is going to go up there, so
614. 20:30I'm going to place my take profit there.
615. 20:31No.
616. 20:32And your trade management should never
617. 20:34be based on how you feel in the moment.
618. 20:37It should all come from structure,
619. 20:40logic, data, and the story the market is
620. 20:43telling you.
621. 20:45Okay, so remember,
622. 20:48protect your downside, give your trade
623. 20:50enough room to breathe,
624. 20:52and make sure your exits actually make
625. 20:54sense.
626. 20:56Because that is how you stop turning
627. 20:58good profitable setups into bad
628. 21:01outcomes.
629. 21:03And when you combine a strong entry with
630. 21:06smart risk management and a clear exit
631. 21:08logic, that is when your trading starts
632. 21:11to become so much more consistent.
633. 21:14So, with that being said,
634. 21:16I'm looking forward to teach you guys
635. 21:17more concepts in the next lesson. And as
636. 21:19always, remember you're just one trade
637. 21:22away.