Original subtitles

and so let's talk about actually cutting

your losses short now with this particular

strategy you do have a very specific stop

loss point that i will be discussing when

we actually go over the strategy but it's

important to understand that digging

yourself in a hole taking excessive losses

only requires more and more capital to get

back to break even that's kind of what

this slide is highlighting next you want

to understand that there is no strategy

there is no setup with a 100 hit rate

meaning no strategy is going to work 100

of the time you're going to have a

a distribution of wins and losses. This

distribution of wins and losses this

particular setup when followed correctly

particular setup, when followed correctly,

when actually checking all of the

when actually checking all of the

parameters that are required, it's going

to have about a 75 to 80% accuracy. So 80%

have about a 75 to 80 accuracy so 80 of

of the time, if you are following it with

the time if you are following it with all

all of the actual parameters, meaning

of the actual parameters meaning you're

you're checking all of the boxes, this

checking all of the boxes this setup will

setup will work 80% of the time. Of

work 80 of the time of course we will be

course, we will be going over those

going over those parameters a little bit

parameters a little bit later on in the

later on in the course here the important

course here. The important thing to

thing to understand is that you don't know

understand is that you don't know which

which setup is actually going to work or

setup is actually going to work or not.

not and so with that in mind you want to

And so with that in mind, you want to be

be putting the same amount of size in each

putting the same amount of size in each

trade. Now, if you are brand new to

trading, I highly recommend trading this

i highly recommend trading this strategy

strategy or any strategy that you go about

or any strategy that you go about trading

trading that is new to you with a

that is new to you with a simulator that

simulator. That means paper trading. A lot

means paper trading a lot of new traders

of new traders push back on this because

push back on this because they want to get

they want to get in the game right away.

in the game right away they want to start

They want to start making money right

making money right away what you have to

away. What you have to understand is that

understand is that making money long term

making money long-term in the market is

in the market is reserved for people that

reserved for people that know how to

know how to trade you as a new and

trade. You as a new and developing trader

developing trader do not know how to trade

do not know how to trade yet. And so you

yet and so you need to be taking things

need to be taking things lightly. So after

lightly so after you have proven the

you have proven the system to yourself on

system to yourself on a simulator or some

a simulator or some type of paper trading

type of paper trading platform that's when

platform, that's when you can actually

you can actually start to test it with

start to test it with real money. And when

real money and when you do go about

you do go about testing it with real

testing it with real money again you just

money, again, you just want to be using

want to be using one contract basically

one contract, basically one lot size,

one lot size whatever it may be that could

whatever it may be. That could be micro

be micro futures that could be the the

futures. That could be the, the mini

mini futures or it could just be maybe

futures, or it could just be maybe you're

you're trading options and you're just

trading options and you're just grabbing

grabbing one contract at a time the point

one contract at a time. The point is keep

is keep things light until you have proven

things light until you have proven to

to yourself that the strategy works there

yourself that the strategy works. There is

is absolutely no reason to add size into

absolutely no reason to add size into any

any strategy that you're new to remember

strategy that you're new to. Remember,

trading does include risk there is risk of

trading does include risk. There is risk

of total loss here. If you don't know what

total loss here if you don't know what

you're doing, as always, anything I

mentioned throughout this course is just

for educational purposes is not a

recommendation to buy anything whatsoever.

i'm simply highlighting what has worked

I'm simply highlighting what has worked

for me and some clients in the past. These

results may be atypical. You may not be

able to accomplish them, that is why I

able to accomplish them that is why i

offer the money back guarantee. If you

follow this to a T, meaning you follow all

of the parameters that i have actually

of the parameters that I have actually

outlined within the setup, and you are not

outlined within the setup and you are not

able to generate better than break-even

results within 60 or so trading days,

reach out to me. I'm happy to meet with

out to me i'm happy to meet with you via a

you via a Zoom session so we could kind of

zoom session so we could kind of get a

get a look at your results, or I'll just

look at your results or i'll just go ahead

go ahead and give you your money back that

and give you your money back that you paid

you paid for the course. Now, moving on

for the course now moving on with the

with the actual risk management portion of

actual risk management portion of this

this, understand risk-to-reward ratio. If

understand risk to reward ratio ratio if

you have a risk-to-reward ratio of just 2

.5, the required win rate is only 28%.

.5 the required win rate is only 28

percent now a lot of these setups that

Now, a lot of these setups that you're

you're going to be looking at with this

going to be looking at with this

particular strategy, they may be 1 to 1,

particular strategy they may be one to one

they may be three to one they may be four

they may be 3 to 1, they may be 4 to 1. It

to one it kind of actually depends on what

kind of actually depends on what is

is presented in the market we're going to

presented in the market. We're going to be

be looking at how to calculate what that

looking at how to calculate what that risk

risk to reward ratio is but understand

-to-reward ratio is, but understand also

also that this setup has a very high hit

that this setup has a very high hit rate.

rate regardless if it is one to one or

Regardless if it is 1 to 1 or better, I am

better i am usually taking this setup if

usually taking this setup if it does match

it does match all the parameters that i'm

all the parameters that I'm looking for.

looking for now limiting losses we want to

Now, limiting losses. We want to focus on

focus on those areas that have very tight

those areas that have very tight risk and

risk and very big reward this should be

very big reward. This should be pretty

pretty obvious but it it is worth

obvious, but it is worth repeating. The

repeating the beauty of this particular

beauty of this particular strategy is that

strategy is that it gives you a defined

it gives you a defined risk point. You

risk point you know exactly where you're

know exactly where you're wrong on the

wrong on the trade if you choose to hold

trade. If you choose to hold the trade

the trade beyond that well then you're

beyond that, well then, you're gambling.

gambling you're not actually trading and

You're not actually trading. And so, we

so we want to look for those areas those

want to look for those areas, those setups

those setups that offer a very very

that offer a very, very defined risk

defined risk point again this particular

point. Again, this particular setup that

setup that we're going to be discussing

we're going to be discussing here shortly

here shortly actually does offer that

actually does offer that, which is why it

which is why it is one of the easier money

is one of the easier money plays that the

plays that the market offers now more

market offers. Now, more basics on risk

basics on risk management we want to be

management. We want to be relying on price

relying on price structure when it comes

structure when it comes to setting our

to setting our stops that means we're just

stops. That means we're just looking at

looking at nearby price action we're just

nearby price action. We're just looking at

looking at what are the nearby candles

what are the nearby candles, what are the

what are the nearby levels of support and

nearby levels of support and resistance

resistance that i can use to set my stop

that I can use to set my stop? Again, this

again this setup the nature of this setup

setup, the nature of this setup has that

has that built into it and so we'll be

built into it. And so, we'll be discussing

discussing that momentarily but this is

that momentarily. But this is just an

just an important part of risk management

important part of risk management. You

you want to be setting your risk on areas

want to be setting your risk on areas that

that you know you're wrong right away

you know you're wrong right away, right?

right another piece here just on sizing

And another piece here just on sizing.

generally speaking uh if you take you know

Generally speaking, if you take, you know,

two losses back to back with this

two losses back to back with this

particular strategy is probably just time

time to wrap it up and call it a day wait

to wrap it up and call it a day. Wait for

for the next trading day see what the next

the next trading day, see what the next

trading day presents, and take it from

there there's no reason whatsoever to

there. There's no reason whatsoever to

continue to press with this strategy or

any other strategy all throughout the day

if you are just taking back to back losses

if you are just taking back to back

losses. Personally, a rule that I keep is

personally a rule that i keep is if i have

if I have three losses in a row, I shut it

three losses in a row i shut it down no

down. No matter how I'm feeling, no matter

matter how i'm feeling no matter what i

what I see later on in the day, I shut it

see later on in the day i shut it down now

down. Now, risk management, another kind

risk management another kind of piece on

of piece on ideal position size.

ideal position size eventually you want to

Eventually, you want to be adding enough

be adding enough size to where you kind of

size to where you kind of find this

find this optimal performance level now

optimal performance level. Now, again, I

again i don't want to touch too much on

don't want to touch too much on this

this because as a newer and developing

because as a newer and developing trader,

trader you should be just trading the

you should be just trading the minimal lot

minimal lot size it's going to be just one

size. It's going to be just one lot size.

lot size so one contract is usually going

So one contract is usually going to be

to be where you want to be now eventually

where you want to be. Now, eventually,

once you start to prove the results to

once you start to prove the results to

yourself, you can start to add in some

size to that. But you don't want to be

to that but you don't want to be trading

trading too large where you are anxious

too large where you are anxious about the

about the trade and you're not trading

trade and you're not trading correctly

correctly. Maybe you're overly focused on

maybe you're overly focused on your pnl

your P&L rather than what the setup is

rather than what the setup is actually

actually showing. That is going to be a

showing that is going to be a major

major trading error. So there is kind of

trading error so there is kind of this

this optimal performance area that you

optimal performance area that you want to

want to be focusing on. And so now that

be focusing on and so now that all the

all the risk management portion is behind

risk management portion is behind us just

us, just to kind of recap, again, highly

to kind of recap again highly recommend

recommend starting this out with paper

starting this out with paper trading or

trading or trading on some type of

trading on some type of simulator from

simulator from there when you actually do

there when you actually do get into live

get into live or real money trading, or

or real money trading or maybe even if

maybe even if you're with a prop firm like

you're with a prop firm like top step you

Top Step, you want to just be trading one

want to just be trading one contract at a

contract at a time while you kind of get

time while you kind of get your footing

your footing and familiarize yourself with

and familiarize yourself with the with the

the actual strategy using real money.

actual strategy using real money okay

there's a lot of ways in which price can

There's a lot of ways in which price can

unfold. To assume that you have seen them

all within just a week of trading is very

very naive you don't want to be doing that

naive. You don't want to be doing that to

to yourself okay

yourself. Okay.