Home Trading Strategies How to Avoid Losses and Improve Your Winning Rate

How to Avoid Losses and Improve Your Winning Rate

How to Avoid Losses and Improve Your Winning Rate

hey hey what’s up my friend so in today’s episode I wanna talk about how to avoid losses in treaty so here’s the thing right there is no one method that will guarantee you to have you know 100 percent zero losses it doesn’t work that way right the closest thing that you can do is to treat without stops but it’s only a matter of time right before the market reverse so much it gives you that you blow up your trading account so clearly that method is not viable so in today’s trading right I want to share with you four techniques right then you can use to avoid losses alright it will not eradicate your losses totally but it should reduce the frequency of it right so number one don’t chase breakouts I know it’s tempting to chase breakers or I don’t all right look how bullish the Chinese are so so strong the candles is so green Reds it’s time to boy boy boy but the problem with doing that is two problems number one whenever you chase breakouts right that’s when the market is about to make a reversal or a pretty strong pullback just look at Bitcoin for example already mean it’s a meteoric rise to $20,000 if you look at the price point around a fifteen sixteen seventeen thousand dollar price point the candles are so huge is so bullish right now many traders hooting and that is the right time to buy but the problem with it is that the market has moved too fast too soon it is you know very right right for a strong pullback or even a reversal altogether that’s the first problem second thing is that there is no logical place for you to set your stop loss if you look at a chart of Bitcoin and their point in time you realize that there is no logical place to set your stop loss right then your stop loss right if you’re good or you don’t reference it from the previous swing low it’s like what six seven thousand dollars a week and I don’t think any traders won you know we stand right at six seven thousand dollars stop loss of Bitcoin right because if you think about this let’s say your stop-loss is a $5,000 this means right for the market to move a one-to-one risk/reward ratio in your favor you need the market to move five thousand dollars away from your entry price and that’s a it’s pretty unreasonable if you ask me okay so first thing right don’t trade don’t chase breakouts okay number two don’t trick into obstacles so what I mean by this is that let’s say you up by your are you looking for a longer opportunity you have to open up your eyes and see it and make sure that you’re not bite smack into a swing higher you know bite smack into a resistance why is that because if you buy into resistance right you know that resistance is where potential selling pressure could come in and push the price lower so you’re pretty much putting the odds against you okay so dude buy to resistance dude shot into support all right in fact what you want to do is to make sure that whenever you buy let’s say you’re buying right now your entry point right to the nearest street high or to the nearest obstacle right that’s at least a minimum of a one to one risk reward ratio at least the trade right there is some potential meat right for it to move in your favor before I face obstacle before it reverse against you and hopefully by the time right you could have you know exit with a profit already okay so number two don’t trade into obstacles number three let the market show signs of strength before entry and let the market show signs of weakness before shorting so what I mean by this is imagine right the price let’s say or the daily type repeat has retraced into an area of resistance do you want to be shorting immediately no why is that because resistance is an area on your chart you’ve no idea and which part is gonna reverse is equal to reverse and the early part of resistance is it gonna reverse smack in the center of resistance or is it gonna do a false breakup before i reverse so you have no idea so that’s why I would rather you let the market show you it’s hand right in this case you want it to show you a sign of weakness right before it refer before you take a short trip so how you can go about doing it is that you can use multiple time frame analysis so for example if what you’ve seen right a strong move into resistance it’s on a daily time frame you go down to the lower type trip like let’s say the two hour time frame okay and on the two hour time frame right you will notice that as the price approach resistance you should see a series of higher highs and higher lows okay that is a most likely the case and you don’t want to be shopping just yet because you can still see a series of higher highs and higher lows so let the market show signs of weakness so in this case right what it will look like is a series of lower highs and lower low so let the market break that series of higher highs and higher lows first let it fall bright a lower high and a lower low and then you can consider taking a short trip and upon time right the market has an initial sign of weakness it’s a resistance or the higher time frame right and a much higher probability probability of the price IDO traversing lower from there okay so number trees let the market show signs off straight let the market show you sites or strike on weakness right depending on your trading direction and number four set proper stop-loss alright I often write traders they just said your stop the ramble over support both resistors and you wonder why they keep getting stopped out and that’s because right if you get if you are free right now good your chart look at it and notice how often right the price trades below support and they get rejected it goes up higher how often the pufta the price trades above resistance gets rejected and it comes down more definite nominal right happens regularly so this means if you put your stop-loss right just beyond this level you’re you’re asking for you’re asking to get stopped hunted so what’s the solution well it’s pretty simple right you want to set your stops away from market structure so for example let’s say you are long prior your long in support I don’t put your stop-loss just below support right give it some buffer like you know what ATR below support right so this way even if the market with the reverse lower hit the loss of support right your stop-loss Elyse is not there you will still be the trade unless the price here’s our lower and you know really penetrating deep into support right then that’s probably where support is really broken and you should be out of the trade so give your stops right sub buffer right ideally I used 180 are above resistance and 180 are below support okay and that’s it right those are the four techniques that you can use right to help you avoid losses in trade and that’s it right I have come towards the end of today’s episode I will talk to you soon you


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