Original subtitles

in this video we will go over

the risk and optimization sections on the

skeleton key external so first things first

the risk section starts off with the

basic risk stop and the e r

which stands for emergency risk stop so

the basic risk stop uses a law

logic very similar to the lux algo

support and resistance indicator which is actually

freely available on trading room with with

this indicator right here and so what

it will do is if you have

it selected is it will define the

most recent support reasons since whatever's relish

meant for you to manage positions off

of on a closing basis so for

example if you are let's say in

a long trade that entered right here

it will pull the most recent support

which is the blue line and use

that as your risk management area meaning

that

price would have to close below this

in order to constitute a failure and

to take the loss as it is

now in this case it doesn't necessarily

happen right there it's funny example where

it would so here we go i

found one let's say that we entered

right here and it's using this

as our most recent support to manage

off of when price actually pressed has

not closed below right here so i

stand corrected let's find it's fine to

loser because that would just wait below

didn't close below okay here we go

here we have a very obvious one

again let's say that we entered on

this ah this candle right here and

our

most recent support is right here going

on a long trade when price action

closes below that right here we take

the loss

okay going back into the skeleton key

and scrolling down so that would be

this condition right here enable basic that

is the basic first close just means

that we will use this on the

exact first close if you do not

have this selected sometimes what the skeleton

key will do is it'll wait for

the next closure to take the position

off

which i actually do find is best

to not have ticked that being the

first closed condition because many times what

will happen is that after the risk

condition is um is met price will

actually usually bounce back around that area

and give you actually a better exit

not always this is something worth backtesting

yourself for whatever strategy that you're interested

in using but i do find that

that is actually fairly consistent to the

point where we should include that into

the skeleton key as it is now

the emergency risk stop is something that

is as the

name would imply an emergency meaning that

it is going off of the most

the the most recent trend higher trend

low so if you are let's say

um let look let's say you're in

a long trade it's going to go

off of the most recent trend low

to

to define your risk management condition again

on a closing basis or a limit

your risk meaning that it would put

a limit order actually in where that

area is instead of waiting for closure

so um let me give an example

of what that would look like so

let's say let's say actually that's ah

this

this was our entry let's say

okay i need to find a good

one yeah okay so let's say this

was our entry here and we're using

the emergency risk stop

the most recent trend higher low is

actually going to be all the way

here

it's actually gonna be all the way

over here so it's gonna be a

very wide stop a very very wide

stop for example

now when you have

this condition selected

all the way down here plot alert

signals and plot strategy signals it will

show you on the chart where that

level is because it might not always

be super obvious but it will show

you for the act of trade where

that current level is

but it will be a very very

wide stop most often so that may

or may not be relevant towards you

anyways moving on here you don't have

to have either of these selected by

the way you can manage risk in

other ways but the ssr left and

right look-back refer to the look-back for

these

these conditions over here so on the

left look back um you know fifteen

is usually pretty good level it'll look

back fifteen bars to define where that

is on the right look back as

well

is again i find fifteen is like

a good sort of goldilocks region to

be having you don't want to have

it too hard too much harder than

that or too much lower than that

as um it might not produce the

most reasonable results of course you can

also use an atr indicator for your

risk stop as well

by selecting this right here you go

with either fixed or use close again

this will just essentially enable it to

use the counter closure above or below

the atr for your stop loss and

you can select your the length that

you want the period and the smoothing

conditions that you want over here and

then the source you know usually you're

going to go with

close in this case

and then of course it will also

allow you to do it in a

different with different settings as well if

you so desire with this condition right

here so if you have two atr

is enabled the one with the highest

risk is applied so you can kind

of use maybe a more aggressive one

in a more conservative one for example

to kind of def

fine these areas right here just are

just complete different settings in general that

meet you meet whatever you're trying to

do or you could have none of

them selected as well if you have

none of these selected in the under

the risk category it does not mean

you won't ever close a trade at

a loss because you could have let's

say a pm or p condition

on your threshold way up here

present that you know if met my

exit you at a loss as well

in fact many times actually don't have

anything selected here and i'll just manage

risk um either that way or in

the optimization tab we could have a

mac stop loss so max stop loss

is done by percent we could also

do it by a nominal number as

well but i typically prefer percent um

and in this case if we had

two selected here would be a two

percent from the entry for example if

we haven't enabled limit s l means

that it'll just have a a a

limit order there so it won't wait

for the closure and again here i

i do find that actually not having

a limit stop loss is usually better

because very often it will come down

to you know let's say a two

percent level and then balance kind of

from there by closure not always sometimes

it's much worse can happen as well

but i do find um you know

you are optimizing this and you're finding

backtesting results that show um you know

a certain percentage is generally pretty good

you will typically find a balance around

that region and it'll exit you out

actually at a better price

a lot of the time not always

but a lot of the time but

again something worth backtesting towards your particular

strategy as it will it will be

different from strategy to strategy take profit

same idea here just with take profit

um again it's measuring from your entry

so in this case if price action

trades up two percent and we have

this

enabled than it will it will take

profit when the closure happens after hitting

two percent so again that might not

be as good as having um a

limit take profit here just because you

might see that price action initially spikes

up like this

you know let's say that we entered

right here and we're looking for a

two percent and and you know two

percent is right here but it hits

it on that wick it's going to

exit you on the clothes so as

you can see the closure was actually

lower than that wick up to two

percent again i'm just guessing it was

two percent here i might might be

my nabi in fact it's probably well

above that considering that this is an

alley on a theory

iam but you get my point or

hopefully you get my point it just

needs a c two percent up from

the current from the current entry and

then it'll exit on that closure if

you want to only exit at two

percent exactly we would select limit limit

take profit and it'll have a blind

limit order there um at

at exactly two percent from your entry

so you'll also get limit fees and

it will be exactly two percent it

won't be on the closure

okay mac stop-loss this is just by

um

this this this is by you know

whatever indicated that you have selected here

and you can select max stop loss

in this case um i don't find

that i actually don't use this really

but if you really wanted to do

it you could have like that also

with take profit just you know selection

by an indicator open high low it's

up to you just more functionality but

not something that i really use myself

i find myself using these two very

very often these are my preferred ways

more often than not okay so the

reverse p m r p take profit

value this is in reference to the

settings that we set up over here

and so what it will do is

if you have it selected is it

will have what say we have it

at like ninety five percent home it

will have a

or at whatever value for the current

period would be required to produce a

ninety five percentile read on the pm

rp

so this actually sounds really good in

theory but i actually don't find that

it produces better results in practice again

you might find otherwise with whatever strategy

you're looking at but in my experience

um it sounds really good in practice

but it actually doesn't produce better net

profit results in

in actuality

max bars and trade quite self-explanatory if

we have fifteen selected here it means

that well after fifteen bars from our

entry we will close a trade no

matter what so you'll find that this

is very useful on strategies that have

let's say a ah an average of

an average amount of bh

bars and trade for the losses as

defined by your strategy results in the

strategy back tester as like way higher

than the average amount of bars and

winning traits let's say your average amount

of bars and winning trades is ten

and your average amount of bars and

losing traces like forty well you might

just want to have a max

bars intrade somewhere around like thirty or

thirty five again you know play around

with it and see what produced best

results because the further that you get

out from your entry in terms of

time the more and more likely it

is to be a loss

okay break even bars basically this is

another one that i really don't play

around with but um enable to imply

time limit before moving to breakeven so

after fifteen bars it will put your

it it will it will put um

either a take profit or or or

an exit basically around breakeven um actually

could see that this is that this

is useful i just haven't played around

with it too much myself and again

you could also do it by percentage

as well

so enable to apply percent limit before

moving to break even

and then of course you can you

know put your commission levels in here

to get more accurate results it's going

to change for everyone it starts off

at not point out one but um

this is probably going to be lower

than what you're reasonably going to be

experiencing especially in crypto if you're trading

traditional or or forex it's probably gonna

be higher actually um but

again free to play around with if

you are going to use to break

even to begin with okay and then

the last one or the last to

higher time frame trend lower time frame

trend what this will do if enabled

is it will require that the crown

cross again the twenty one fifty five

must be

be on the same side as whatever

time frame you're selecting right here so

again we are looking at an hourly

timeframe right now

as far as the chart goes but

let's say we wanted to full our

crown cross to be to the upside

on you know on the same side

as our um as our ah as

our trade in this case the long

side so the full hour crown cross

at twenty one fifty five must be

crossed to the upside again twenty one

above the fifty five in order for

us to have

have um a condition met which then

greenlights the rest of the conditions of

course or we could also do a

lower term for him so in this

in this case again in the background

we're looking at the hourly what say

we want to look at the five

minute timeframe trying to must be up

as well we can have that selected

right here and that takes us to

the end of our