Here Are My Top Trading Risk Management Techniques: With Nick one or our Traders
Every single one of us have. Traders have all been there and we've all been into a trade or series of trades that we. We could use some help to get out of. Well, Nick is no exception. And I love being able to help help traders. So Nick, a trader in our group, got himself into a little bit of a bind and we're going to jump in and see what we can do to help fix his trades, not only fix them for today, but hopefully give them a little bit of a skillset that he can take into his future trades.
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So thank you guys. And again, we'll see you in the trade rooms. Nick I'm looking at I'm just going to just confirm what I'm looking at. So you're reds are your take profits or your orders on that? The greens are the orders. There is other orders are the reds are take care of it. Okay, so on might be a little too late, but I would have probably moved those take profits up to here, those ones because you could use that a little bit more profit to start pulling all those guys over there, right? Yeah. Yeah, right.
And so sometimes I'll use where, you know, if you feel like you're I have annotations here. Sweet. So this is what I'm just kind of going back in to hindsight call now but if I have if I have take profits here or right here but do you feel like the market is going to test here? I would have just moved. You take profits there and I probably would have pulled these guys down to here. So to set these guys up to their move those guys down to their just declining and then that would have kind of you still would have made money, but you would also lighten your position size just in case this is the point where it decides to turn.
Does that make sense? It does is it does decide to turn. Then you probably want to get out of everything, but you've maximized at least this layer's profit to help help basically break even on these guys and then reduce your your loss limit. Here you so that's just a quick technique of fixing trades is now you got to look for a profit later like you do not have any profit on them in the books right now. Right. Everything you have is a loss.
And so I'm not saying that to state the obvious. I'm staying in your mind right this second. You should be looking for a high probability trade set up to get in, to get some profit and. Right. And I'm just talking about this market now.
There's a lot of things that you could do to do that. And one of the things that Sean does and it just depends on you how you view the market, how you like to trade. So what Sean does and what looks like you're doing is your what's your take profit set at three grades. Okay. So if you find an area of three pips, that's a high probability trade target like I'm going to have to pull my line out to measure. So if it pulls back like right now, you could probably build into a small position here right? And if I pulls back even more, where I'd be nervous is if it crosses this one and has to cross this.
It's proven that we're kind of in a and a little bit of a channel, so it's coming down testing this so it's a good probability to have some trades on. Now, you could do the same thing. It's up to you, right, whether or not you want to take the profit here or again move it up to bear, which I probably would and I would take that. So this gives you this gives you the option to do either or.
Right now. So either or. Right. So moving those take profits up to there gives you the option that if it does, in fact come up to here and stall, you could take those out manually and then recycle and put those on again. But if it comes up to here and shoots past it, then you got you got your answer. But if you had take profits here, you wouldn't have had the opportunity for it to shoot, pass it.
You're basically you're telling the market that that's that's the only outcome that I'll accept. Is that makes sense. Yes. So you're giving yourself an either or by moving those up a little bit.
And I like to have choices. But at the same token, sometimes it's hard to do that if you're not if you're not quick. You know what I mean? To something really quick where you do what you don't want is, you know what it came out touch that I should have got out but I did it and then it came back and went the other way. Right. Yeah. And so, so that that's what I'm saying.
And leaving it all up to you the way I would do it is giving myself a choice of whether I choose, if I'm going to take it or if it's going to break. And again, all of that does for me depends on what the market is doing, how slowly it's going, how fast it's moving. If we got a lot of this action or if it's a lot of this action, and so if the market is moving rapidly up and down, like yesterday, a a candle was five pips. I was putting three pips take profit because I was getting inside of one candle. I was, it was hitting it, coming back, putting it back on, hitting it again, coming back, back on our other direction. And I was hitting those three pips to take profit like crazy.
And to me so it's like different market has different techniques that you can utilize, but if you're not comfortable, the first thing I would tell everybody is just the the reason why I love scalping. The reason why I love wobbling is it teaches you it teaches you really quickly because you're going to see opportunities a lot faster than if you were just holding on to trades for an hour or so. You know what I mean? Personally, I love it when I'm in markets where I'm constantly just click, click, click, click, click, click, click, click, click, click, right. Take a profit getting out of trades. We're not in one of those.
All right. They they've said go to settings on what should I do there. What sorry. What is said I should go to settings and zoom and what should I do there. So look for your meetings tab your meetings settings. Yeah, go to the settings and then go down like basic something like that.
Or as basic meetings, meeting settings and then look for something that says annotations and you have it clicked off close to everyone, only use it in your content. All right. So now here's the decision. They're coming up against the major action point, right? So now we have to sit if it's going to stall or us going to go past it.
Okay. What do you look for in the stall? So there's two things I'm looking for in the stall. One is how early are on the candle? So you got like you're still 30 seconds in this candle still and it looks like it's on top so it's not stalling side.
Hold on to that. This candle right here and it hold on if it if it sells to come back if it fails to break below or come back into there. And that's a good sign for these trades.
Right. Okay. However, can you minimize this guy right here? Because I want to see where your next action formation, however, and now your take profits are in a losing situation. So I would probably move your take profits up to this guy right here and then let's look for option. Okay? Okay. I don't know if it's an empty five. You can have a quick take profit like is there.
So I don't have one. I just been dragging you got manually move them up, makes a little cart, makes a little tougher for sure. So again it doesn't take away your decision, but what it does do is it gives you the decision right now. You have the decision. What are you going to do now? It's coming back down here.
If it crosses this, you could look to lighten. Well, if it crosses this, what we don't want to do is get into another marching market where it decides, okay, this is where I'm going. I'm going to go down and then go back down. So just kind of be cognizant of that because you're setting your trades up for it to continue this run.
Now, I always get nervous. I shouldn't say nervous isn't the right answer. I always you don't you just don't know where this turn is going to happen, right? You think maybe it's going to happen here? Maybe it's going to happen if it continues to go up. Right. And you don't know where this is going to be, but you do know it's coming. Right.
And the more that it goes this way, the more the the more likelihood that we're going to get that turn or you're you're going to get to come down. Right. And we don't want so in my opinion, these trades right here because it has crossed this issue. It it in my opinion, it puts that's why I move to take profits up because the chances of being profitable has now increased. However, if it comes down and crosses this, this might be where you just need to close out of everything.
So if we got to do that, then we need to look for profit layers, business. Let's, let's assume that it does happen and we have to x out. We need to look for profit opportunities here because we're going to hold out as we're going to we're going to need to take a loss on these trades. It makes sense. Where did you say we need to look for profit layers at like right where we're at right now? Yeah. So we're hunting for hunting for profit opportunities right now. Yes.
Okay. Yeah, that makes sense because I would think that if it does close here, which is, you know, fortunately it's like 78 pips away, then it could start getting, you know, lower lows and doing that. Right. So this is kind of my in my mind, this is my, my get out of trades of my bias. However, for me, this is just for me, is it? I would have been in a ride the wave situation right here and I would have held on to those buys instead of taking profit here to see if it would have crossed this and keep coming up, because this would have been my protection layer against if it if I has to close out of everything, I'm now in profit on these or break even.
Does that make sense? Yeah. Yeah. And so that's the only way I would have done it differently because there's not a lot of volatility in this market right now and it just wants to continue to climb. So I'd be like, okay, I'll let it climb. But if there was volatility in the market the way you played, that would have been perfect.
But all the only the only thing I'm saying is because there's no volatility in the market. That's what I would have held on to. I'm okay. Yes. So this is more along the lines of the of trading the market that you have instead of trading like a wobble technique where this is an action point.
And on the stall, I would get out. Right? So this is normally on a stall, you get out or you put your profits right here and that's the normal way to do it. So I'm just having a hard time because I'm kind of I'm trying not to speak out both sides of my mouth, right? Yeah. The end. And really it comes down to identifying what type of market you're in and how what's the best way to approach this market? Yes. And if you're a new trader, which I don't think you are, but if you're a new trader, focus on the rules. And so I'm telling you right now when you should break those rules.
And so if you're a brand new trader, don't listen to what I'm saying is there's always an exception to every rule. And so that's why I'm like, I'm trying to struggling with what what I'm trying to say, because it's it's very counter to what I often say. Right? Right. Yeah. Yeah. You traded that perfect. But for me, I would have just held on and see and see where it's going. Okay.
Yeah, yeah, that makes sense. I think. I think there's a lot of psychology potholes for me in this description just because, like, it ran down so much that when it finally started coming back up, yeah, there's a lot of fear that it's just going to turn around at any given moment. And so it's great for you to hop on and start talking. Like, I just started the session basically like you should be putting trades on here and you should be right? Yeah, absolutely. And I hear a lot of that is such a great comment to have right now over here on your five minute.
You still got to see if it's going to cross this, right? Yeah. Yeah. Because you still could get that turn. So the question is, is when we when when I was trading and writing this up, did you get any any of that or were you or did you play the question? In my mind, because of psychology, were you nervous and you stopped trading right here and you were just waiting for it to come back and fix your trades both. I mean, I did place buys coming down because I could see, you know, it's trade was trying to come up and so I was layering in but I, I actually ran out of free margin was good and I basically ran out of bullets before I got to the bottom. And it was an I wasted basically like a 20, the bottom 20 pit run up. Okay.
There was no I wasn't I didn't have any profitable trades before it got to the bottom of my buys. And then I had some on there that were just hitting as I hopped on with you. But I haven't. I mean, besides this little bitty rundown, I placed a couple of buys to wobble this little zone.
Sure, but yeah, that was space. So one. Yeah, if you run out of bullets and that's a different story, but if you're sitting on your hands because you're in fear and you know that that was I was going to say, that's not what we should do. Right? So the moment that it crossed over here, like we talked about on the one, this is when you should if you had bought it, you should have bought and rode the wave. Right. I see. Okay. Because that that would have helped fix these guys.
I think as traders, I'm not saying you did this, but as traders we get paralyzed because of fear. Yeah. Yeah, right. And so we like I don't want to make my situation of worse when reality you're making your situation better by placing trades in and a high probability setup now because that just did this and ran down, we still are playing this channel and we'll see. Right. However, this is a pretty strong run down and we haven't seen anything like that previous. And so because we haven't seen anything like this previous, it, it, it, it turns into a Friday call for me like is this hard to read right now you haven't seen anything like this previous we don't really know what it's going to do.
Is this an attempt to go lower and is it going to break this channel and continue to go lower or is it going to bounce right here? And I don't know, because it's an abnormal move to what the market has done. And it's also a Friday. So I don't know. But we also don't want to be stuck in these trades longer.
Right. So getting getting a reset to zero is your call. And it could take the power back from the market for you by saying, you know what, I'd rather take the loss here than then, or I'd rather take the loss here than take in the loss down here. And I recovered on a bunch of my trades already. Right. But that's your call.
I would make that call, particularly if this candle doesn't give me confirmation that we're going to come back up and touch the top. So if we sell, is it sells to cross here or is it sells to give you a reversal signal like it comes out and sells this? I'm not saying within this candle, I'm just saying I'm saying that if it crosses this before it crosses this, then that's a continuation of the downtrend. And and if it crosses this, this is confirmation is going on in this case. Yeah. Yeah, that makes a lot of sense. So the best case for this trade right now is the in the next 3 seconds, it holds above that because that means that it could test I'm going to reduce my thickness. Yeah, the thickness I can drag.
So would you have been buying at this bottom? No, only because I was the information in here because of this big move. Mm hmm. I would have been nervous that it would have broke this and continued down. Yes. Okay. Right. I could have if I didn't have many trades on and I wanted to get into early in your situation when you're.
I would only put trades on when I get a high. So a high probability setup then. Yeah. Yeah.
You would wait until this like not the early situation. Right. And so if I'm nursing or I'm fixing trades, I'm only looking for things that I still confident in.
And this move I didn't really feel confident in because it came down really quick instead of just marched down, right? Yeah. But also, if my move comes down quick, sometimes you get a move back up just as quick. Now, Pete also pointed out, which is a great thing. So again, great question from Pete was thousand points and and in jeopardy and a lollipop. He's just having a great day today. He asked if you would said that normally yes.
On Fridays. No, I does not enough. I just don't trust this market to have any semblance of a price action structure because we are just in one marching market after another.
That's the only thing that I trust right now is a marching market. And so a marching market ignores any price behavior. Price structure said levels, any of that stuff. Right. And so I don't trust it enough to do it. But yes, normally I would said the five minute.
So it's just a difficult time to trade on on a Friday and the last couple of Fridays excluding or even nonfarm it's tended just go in one direction for a while and then like just run like we've had 100 to 200 day one Friday adding we had like a 400 bit run and I was trading that when I and do so good. So I'm like, this is the reason why I remember now, why I don't trade Friday's. So you're doing the five percenters. I think
hobble wobble. You did the five percenters as well too, right. How long have you been doing five percenters for? Probably. I think I get this accounts for maybe like a month ago. I okay. And so what is their rule structured like.
So this one. Yeah. You're trying to do what what's the challenge here. Yeah, this particular account is the, the instant funding account and so you do, so you buy and there's like three tiers I think, or maybe four and you buy in at a different like starting account size. And so I pick the middle one and I think it's actually like a 40 you're buying it at a $40,000 account, but for stage one, they reduce that by four.
And so I'm in a $10,000 account right now. But and so the stage one stage one I think has slightly different rules than the other stages. But for stage one, I'm in in $10,000 account and I need to make 6%. So $600 at a certain time frame, you have to make that 180 days, 180 days.
And so I think like around six months. Right. And my draw down is also my max drawdown for when they close the account is also 6%. So I need to not lose $600. And the question is and this account is a 6% of 10,000 or is it 6%, 10,100? And yeah, I think with this particular account, it's an absolute draw down. So it's always going to be like if I go down to 900 and whatever, they'll close it.
But if I'm in profit, it's just buffer for me. So if I work my way up. So if you get to $590 and you draw it down 6%, which would put you back back down to 10,000 or just slightly below it. You're okay? Yeah.
Yeah, I should be okay. Yeah, that should be fine. I'm going to go and take off. Okay.
So the question now that I have for you is this is this because of this move just happen right there, you're profitable on the day or are you still down? Like what? What's your. Yeah, yeah, I'm profitable on the day. 48, 62. So the way of the way that I've done this account, like I started off pretty aggressive.
But like in LBO, if I lose, I can hit the daily loss limit of 5% pretty easily. That's like almost all of the max draw down for this challenge account. So if I do that two days or three days in a row, I lose this account. And so instead I've taken that $600 to be kind of like the whole account.
And so I really try to target like 612 or 20, $20 total per day. Like I'm you can see I'm trading like a .02 on a $10,000 account. And that's because I want to keep my draw down low because I can and you're you're trading you're trading with good risk parameters on $10,000.
You're training .02. But you're also I mean, obviously are sucking a ton of trades on. Yeah, I got, I got wild for sure. Yeah. That was a way. Is that okay.
So that's not typical. So do wobble in this. Yeah. Yeah I do.
Well so how many layers of points or how many trades per layer do you do. Just, I'm just I generally do to one or two per layer. And then as I get down to my third or fourth layer, I'll, I'll start going like four. I had Gleb made me a break even line. And so today especially I started playing the break even line instead of drawdown. And so that's awesome.
Basically like whenever it got below like a certain spot price action wise, I would, I would say, oh I, we really would like my breakeven to be below that and I would just click until the breakeven line was below that without really much regard for how many trades I put on. And I think that's kind of where I got in way too heavy, but, but starting off, I usually do like to if it one, if I'm really unsure too. And then as it comes down to more and that you know, the breakevens right in the middle then like three or four which puts it right and then I get into trouble if it keeps up to that. So, so what's it just curious, is this a good day. .02 is making now 50 bucks for me. Yeah, yeah, yeah. Well because at 0.02 to make sure 50 bucks that's some good trading honestly at
.02 right. Yeah.