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Summary
Core Theme
The most crucial aspect of trading is understanding and managing risk by pre-determining potential losses on each trade, rather than focusing solely on potential profits.
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you're listening to the number-one spot
fruit markets and trading market traders
TV learns
most important thing in trading in my
opinion and I think in most traders
opinion is looking at risk is trying to
understand its trade I'm gonna answer
how much do I lose if I make the wrong
trick if I if it's the correct rate I am
fine I make money but how much do I lose
if it's the wrong trade cuz in in
trading especially if you are new you
will be making more wrong trades than
right trades when you're first starting
ok so you gotta understand what your
risk most people look at a risk
I personally from look at risk from 0.1
percent to 1 percent what that means is
whenever I'm entering a position whether
it be a long position or a short
position I try to understand where I
will have my stop-loss first so let's
just let's just do it step-by-step
ok let's just use this as the level
let's say I want to take along here
right the level to hold I want to take
along here what I will do in this risk
is because throughout this level
throughout this level this is the
previous huh okay this right here is the
previous high throughout this range this
was resistance and this happens a lot in
any market resistance tends to become
support it is a level where people
thought okay this is where I'm gonna
sell if we achieve a verb it what tends
to happen in the other side is people
will use it as a level to buy a
resistance becomes support and support
becomes resistance if achieved now let's
say let's do this as an example hypothet
yeah just looking at risk would you
actually take the straight movie not but
let's look at let's look at it in terms
of we actually have that trade of the
stream Oh anyway
the reasoning behind I personally
wouldn't because it's enough I stay a
liquidity pop around these levels most
likely we will dump to these levels if
we do and then do a little to the
topside like we did the same thing here
there's a lot of liquidity around these
levels there's a lot of stop losses to
be here so it's a liquidity popped and
then I drop and then the same thing to
the other side as well does this makes
sense because there's a lot of
liquidations here anyway let's continue
on our let's say I have made a decision
to go long here because of multiple
reasons and I have made a decision to
take a profit sorry I'll stop loss here
right I have made that first then I have
I know what my risk is going to be okay
because I know that because that is the
risk I will always take when I'm taking
a trade and use this let's say as a 1%
risk so what that basically means is you
when it comes down to this level you are
going long on it you are buying into it
and you use this as risk what this means
is if this trade does not work out if
you actually get stopped out or you
exit the trade because of a stoploss you
will actually lose a 1% off your whole
account ok 1% and 2% are the little
thing little golden ratio percentages
that most people use because you can
make a mistakes 50 60 times before you
lose 50 60 percent of your account
obviously you actually lose much more
than that overall because of compounding
but still the basic picture is you can
make much more mistakes and not blow
your account by taking limited risk okay
and this is the most important thing in
RIT in trading it's not about how much
money you can amount of it when you're
trading as in entering a trade the most
important thing in your mind should be
where is my stop-loss
what is my risk and if that stop-loss
gets hit
how much do I lose and if you have that
figured out and then you start looking
to the top side then you start looking
at okay what is my target what do I want
price to achieve what do I want price to
pump to what level should it go to so
your first train of thought should be
always about risk because that is where
the big money is that in the long term
is how you're gonna make consistent
games otherwise you're gonna be one of
those one-hit wonders that you make a
lot of money one day and you lose 60 70
percent of it the next day you don't
want that you want to have consistent
earnings on your trades you want to be
consistent you want to be compounding
and this understanding risk is the most
important part of trading and this is
what discipline comes into play right
sometimes most of the times your
stop-loss might not be this close it
might be pretty wide right and price
might come down all the way to here but
you know if this if you get stopped out
you only lose still 1% do you make a
decision just to close this trade where
it's at right now you have not been
stopped out yet do you want to close it
no because this is where discipline
comes into play you have made a decision
before entering the trade to have a
stoploss here because of reasons because
of logical reasons that you have thought
through ta and basic understanding of TA
just because price has done something
unexpected you do not want to do what is
called FOMO right because this is a FOMO
method what you have done here is you
have a fear that this trade will get
stopped out just because you have that
fear you have that emotional take in the
back of your head you have
stopped this trade-in is tracked what it
could be is we could have gone really
close to it and not been stopped out and
it could have pumped you don't know you
don't know anymore you don't know your
trade was valid or not right and that is
a no-no in trading you should always
follow your plan because you have made a decision
decision
beforehand looking many looking at many
things and in this in this slight time
you have made a decision to close it
why because you got that little tick in
the back of your head going yeah I might
be wrong right what makes you think you
are wrong this is the emotional side of
trading and this to help with this you
gotta have an understanding of trades
and understanding of markets
understanding of levels and this is
where you get your skill and experience
from right so for the last half an hour
you have been searching levels and
searching trades and then in the last
ten seconds you made a decision to close it
it
that is an impulsive decision you should
not be making that sort of impulsive
decision that is fear and that should
not exist in trading you should leave
the trade if you get stopped out you get
stopped out you have already understood
what your risk is you have already
understood and realize that if you get
stopped out you lose one percent and you
have taken that in the chin why will you
change why should you change because the
next time do you know what's gonna
happen the next time right it's not
about one one trade or to trade it's
about thousands about hundreds of them
what's gonna happen next time is this
trade is gonna pop in your head and
you're gonna be like hmm yeah I closed
the trade here actually pumped so what
am I gonna do this time is I'm gonna
have a wider stop-loss I will change my
risk that will happen
that will happen to you you're listening
to the number one spot for markets and
trading market traders TV learn some
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