0:04 you're listening to the number-one spot
0:07 fruit markets and trading market traders
0:11 TV learns
0:14 most important thing in trading in my
0:16 opinion and I think in most traders
0:19 opinion is looking at risk is trying to
0:24 understand its trade I'm gonna answer
0:26 how much do I lose if I make the wrong
0:29 trick if I if it's the correct rate I am
0:33 fine I make money but how much do I lose
0:37 if it's the wrong trade cuz in in
0:39 trading especially if you are new you
0:41 will be making more wrong trades than
0:45 right trades when you're first starting
0:48 ok so you gotta understand what your
0:51 risk most people look at a risk
0:54 I personally from look at risk from 0.1
0:56 percent to 1 percent what that means is
1:00 whenever I'm entering a position whether
1:02 it be a long position or a short
1:06 position I try to understand where I
1:08 will have my stop-loss first so let's
1:10 just let's just do it step-by-step
1:13 ok let's just use this as the level
1:17 let's say I want to take along here
1:20 right the level to hold I want to take
1:22 along here what I will do in this risk
1:26 is because throughout this level
1:29 throughout this level this is the
1:31 previous huh okay this right here is the
1:35 previous high throughout this range this
1:38 was resistance and this happens a lot in
1:41 any market resistance tends to become
1:42 support it is a level where people
1:44 thought okay this is where I'm gonna
1:48 sell if we achieve a verb it what tends
1:50 to happen in the other side is people
1:53 will use it as a level to buy a
1:56 resistance becomes support and support
2:02 becomes resistance if achieved now let's
2:04 say let's do this as an example hypothet
2:09 yeah just looking at risk would you
2:11 actually take the straight movie not but
2:13 let's look at let's look at it in terms
2:16 of we actually have that trade of the
2:22 stream Oh anyway
2:24 the reasoning behind I personally
2:26 wouldn't because it's enough I stay a
2:28 liquidity pop around these levels most
2:29 likely we will dump to these levels if
2:31 we do and then do a little to the
2:33 topside like we did the same thing here
2:34 there's a lot of liquidity around these
2:36 levels there's a lot of stop losses to
2:37 be here so it's a liquidity popped and
2:39 then I drop and then the same thing to
2:40 the other side as well does this makes
2:41 sense because there's a lot of
2:44 liquidations here anyway let's continue
2:48 on our let's say I have made a decision
2:50 to go long here because of multiple
2:51 reasons and I have made a decision to
2:54 take a profit sorry I'll stop loss here
2:57 right I have made that first then I have
3:00 I know what my risk is going to be okay
3:02 because I know that because that is the
3:04 risk I will always take when I'm taking
3:08 a trade and use this let's say as a 1%
3:11 risk so what that basically means is you
3:19 when it comes down to this level you are
3:21 going long on it you are buying into it
3:25 and you use this as risk what this means
3:27 is if this trade does not work out if
3:30 you actually get stopped out or you
3:34 exit the trade because of a stoploss you
3:39 will actually lose a 1% off your whole
3:45 account ok 1% and 2% are the little
3:48 thing little golden ratio percentages
3:50 that most people use because you can
3:53 make a mistakes 50 60 times before you
3:56 lose 50 60 percent of your account
3:58 obviously you actually lose much more
4:01 than that overall because of compounding
4:04 but still the basic picture is you can
4:07 make much more mistakes and not blow
4:12 your account by taking limited risk okay
4:14 and this is the most important thing in
4:16 RIT in trading it's not about how much
4:19 money you can amount of it when you're
4:22 trading as in entering a trade the most
4:23 important thing in your mind should be
4:26 where is my stop-loss
4:30 what is my risk and if that stop-loss
4:31 gets hit
4:34 how much do I lose and if you have that
4:36 figured out and then you start looking
4:38 to the top side then you start looking
4:42 at okay what is my target what do I want
4:45 price to achieve what do I want price to
4:49 pump to what level should it go to so
4:50 your first train of thought should be
4:54 always about risk because that is where
4:57 the big money is that in the long term
5:00 is how you're gonna make consistent
5:05 games otherwise you're gonna be one of
5:06 those one-hit wonders that you make a
5:09 lot of money one day and you lose 60 70
5:11 percent of it the next day you don't
5:13 want that you want to have consistent
5:16 earnings on your trades you want to be
5:19 consistent you want to be compounding
5:23 and this understanding risk is the most
5:26 important part of trading and this is
5:28 what discipline comes into play right
5:31 sometimes most of the times your
5:32 stop-loss might not be this close it
5:35 might be pretty wide right and price
5:40 might come down all the way to here but
5:43 you know if this if you get stopped out
5:47 you only lose still 1% do you make a
5:49 decision just to close this trade where
5:51 it's at right now you have not been
5:53 stopped out yet do you want to close it
5:56 no because this is where discipline
5:59 comes into play you have made a decision
6:01 before entering the trade to have a
6:04 stoploss here because of reasons because
6:06 of logical reasons that you have thought
6:11 through ta and basic understanding of TA
6:14 just because price has done something
6:18 unexpected you do not want to do what is
6:22 called FOMO right because this is a FOMO
6:24 method what you have done here is you
6:29 have a fear that this trade will get
6:30 stopped out just because you have that
6:33 fear you have that emotional take in the
6:36 back of your head you have
6:40 stopped this trade-in is tracked what it
6:42 could be is we could have gone really
6:44 close to it and not been stopped out and
6:48 it could have pumped you don't know you
6:50 don't know anymore you don't know your
6:56 trade was valid or not right and that is
6:58 a no-no in trading you should always
7:01 follow your plan because you have made a decision
7:02 decision
7:05 beforehand looking many looking at many
7:09 things and in this in this slight time
7:11 you have made a decision to close it
7:15 why because you got that little tick in
7:18 the back of your head going yeah I might
7:21 be wrong right what makes you think you
7:24 are wrong this is the emotional side of
7:29 trading and this to help with this you
7:31 gotta have an understanding of trades
7:32 and understanding of markets
7:34 understanding of levels and this is
7:37 where you get your skill and experience
7:43 from right so for the last half an hour
7:46 you have been searching levels and
7:47 searching trades and then in the last
7:49 ten seconds you made a decision to close it
7:50 it
7:53 that is an impulsive decision you should
7:55 not be making that sort of impulsive
7:58 decision that is fear and that should
8:00 not exist in trading you should leave
8:02 the trade if you get stopped out you get
8:05 stopped out you have already understood
8:07 what your risk is you have already
8:09 understood and realize that if you get
8:11 stopped out you lose one percent and you
8:16 have taken that in the chin why will you
8:20 change why should you change because the
8:21 next time do you know what's gonna
8:24 happen the next time right it's not
8:26 about one one trade or to trade it's
8:28 about thousands about hundreds of them
8:31 what's gonna happen next time is this
8:33 trade is gonna pop in your head and
8:37 you're gonna be like hmm yeah I closed
8:41 the trade here actually pumped so what
8:43 am I gonna do this time is I'm gonna
8:46 have a wider stop-loss I will change my
8:49 risk that will happen
8:53 that will happen to you you're listening
8:56 to the number one spot for markets and
9:00 trading market traders TV learn some
