Home Trading Strategies How to Avoid Losses Using These Proven Strategies (That Nobody Tells You)

How to Avoid Losses Using These Proven Strategies (That Nobody Tells You)

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How to Avoid Losses Using These Proven Strategies (That Nobody Tells You)

hey hey what’s up my friend so in today’s video you will learn how to avoid losses okay because here’s the different I know many of you you get into trading and you face losses after losses right so today’s video is for you if you know you keep getting stopped out of your trades only to see the market reverse back in your favour or maybe you keep losing without knowing why or maybe if no idea what the heck you are doing or maybe you just love watching my videos they give me a thumbs up and subscribe to my youtube channel and this way you’ll never miss an update again alright sounds good then let’s get started so the first technique that I want to share with you is this don’t trade far away from an area of failure so what I mean by this is that in certain market conditions especially when the market is trending in a healthy trend the market tends to pull back towards the middle right for example what is the mean right the mean can be a moving average a trend line etc so if the market respects a moving average okay you don’t want to be entering when you’re when the price is far away from the moving average that’s because the market you know when it’s about to do a pullback you probably get stopped out and you get a loss so let me share with you an example of what I mean by that so look at this chart here okay so let me just remove the lines and just pull out some moving average show so in this case you can see that the 50 period moving average right for this after year Treasury bond the market tends to respect this moving average right bounce once twice thrice okay so the point I’m trying to make over here is that if you see a market respecting a set of moving average okay you don’t want to be entering your treat when the price is far away from the moving average so for example if you look at this point in time at this point you don’t want to be buying at this at his house right can see over here you don’t be buying at this highs reason being is that if the pullback occurs right let’s see if the pullback occurs there’s a good chance you will get stopped out of your traits unless unless you’re you have your stocks right a pretty white stops let’s say below this wiggle or somewhere here that hey you know there’s a good chance you will be able to hold on to the trick but let me ask you honestly will you put your stops over here unlike me right because I I will see your comments from traders right who say stuff like not me if you said your stop somewhere here you know it’s too wide you get a very poor risk reward ratio yeah yeah yeah and I agree and that’s why most traders they would put their stop loss over here so that’s why you don’t want to be buying when the price is far away from the moving average because more than not you will get stopped out on the pullback okay so the first that’s the first thing that I want to share with you okay and also when the price is far away from the area of value the market is likely to do a pullback so this is the first tip that I have for you right don’t rate when the price is far away from the area of value and this can be moving average trend line etc number two all right don’t chase breakouts I I know it’s it’s exciting right to chase breakers right man Raina look at how bullish that Kendall is right look at a strong momentum right it’s time to buy buy buy and when you do that again alright market is more likely you know to do a pullback they really do a pullback you will probably get stopped up there swell because the reason is because when you chase breakouts it is near difficult to find a logical place to set your stop loss so let me give you an example of this so let’s stop a bit color and this is market and many traders they chase right into the $20,000 price level or I so let me just zoom up you can see it over here Bitcoin hit the highs of 20 K before it reversed and before in reverse you look at the price I can help bullish disses right traders would be thinking oh you know the market is going to the would I even see commentary’s of Bitcoin he think that $100,000 right someone predict that 100k Bitcoin yet then yeah anyway if you look at this right as herself honestly yes is bullish right but where I go to set your stop loss where is a logical place to set your stop loss and if you look at this chain right there is no logical place to set your stop loss unless you’re willing to swallow a stop loss of this from this highs all the way down to let’s say the previous swing low to about here $5,000 to about almost $14,000 so your stop loss is about $9,000 on Bitcoin let me ask you will you have an $8,000 stop loss of bit quick let me phrase it another way right for you to make a one to one risk reward ratio on Bitcoin the market has to move $9,000 in your favor it’s ridiculous okay so this is why I say that you don’t want to be chasing breakouts number one there’s no logic place to put a stop loss and number two morph they’re not right the market is want to do a pullback or consolidate it when that happens right you will again like II get stopped out of your trees why is that because again touch yourself as a self or touch your heart I said we will you probably set a stop loss well for most traders they’ll just you know put some random stop-loss on the chart whatever their account justified maybe it is a middle of this mass range below the lows of this bars below the low of this second a previous low of this bar yeah so begin will the market care right where your stop losses no right you will reach back right the nearest market structure like you know the previous swing low or previous resistance support that’s where potential buying pressure would come in right it doesn’t care in a way you send your stop loss and that’s why you know you get stopped up alright so this is one example Bitcoin another one it so let me just share with you another one right how about this one cool okay so same thing right and this juncture let me just zoom up the chancel right this juncture again you don’t want to be buying at this highs you’d want to be buying it this high you’re chasing the markets right if you want to do it right where it’s a logical place to set your stop loss all right a couple of options number one is below this this swing low over here number two this could be a previous resistance tensor point if you said it’s somewhere below it could be somewhere here as well so again if you look at this chart do you ought to be chasing this this this market this is not as bad as the Bitcoin one but again I would rather stay out of the trade because again if you don’t set a logical stop-loss right when the market does a pullback when it consolidates more often than not you are gonna get stopped down okay so an example of in this case the market just simply just shop sideways and you know consolidate so you may or may not get stopped out you can see that in this case it did it retest almost this previous highs over here where it became a previous so-called previous resistance I guess support so you can see that if you set your stops to get right at random levels right below these lows here or whatever your account feels like it or whatever money is left in your account you will probably get stopped out okay so the second technique right that I want to share with you is again don’t chase breakouts and in fact this is just a variation of the first technique I just share with you okay they are kind of similar but different same same but different moving on the tactic don’t trade in two obstacles what do I mean by this so let’s say you are you’re bullish gonna buy right so when you buy let’s say you you when you buy right you don’t be buying right at this price level over here why do we want to be buying here because there is an obstacle coming in your way which is this area of resistance if you buy over here the market could possibly just go up a little bit your favor and then boom right collapse back lower back towards this area of support okay so same thing for shorting right you don’t be shorting right into support right because that’s where potential buying pressure could be lurking and if they come in they step in right they’re gonna reverse the price against you and you will again likely get stopped out so be aware of this don’t trade into obstacles and let me share with you an example right how about dollar Mexican okay so if you look at this over here you can see that right now okay let me just get on my lines you Jim alright see these are the lights consider right now dollar Mexican right it’s it’s consolidating consolidating a little bit over here right this portion here and you want to be shorting over here I hope not right because if you look laughs you notice that this is an area of support right around the $18 97 so this means right the market right if it does let’s say break down below this lows it could just trickle down low a little bit before buying pressure could potentially commit and push the price up higher and possibly retesting back this up previous support notes on this resistance so you don’t open your eyes and see though where you are trading into don’t trade into obstacles okay this is this is important right so if you did apply this one technical you realize that you know a lot of traits will be filtered away because most of the time the price is just in no-man’s land or it’s merely an obstacle and it’s a train that you want to skip all together so let me share with you another example dollar Canadian okay so you look at this again same concept so traders who look at this right already look at this a pool flag pattern right price goes up higher you know necessary traits worth small-bodied retrace what their price break and close above this sweet hi oh the flag pattern is completed let’s buy buy buy and where are they buying in to bind smack into this swing right smack into this area of resistance and that’s where you know right potential selling pressure is looking you don’t be buying into an obstacle okay in this case our market dad yeah did reverse down lower from here okay so let me explain you know how you want to approach it instead when you enter your trade right you want to enter from what I call an area of value you enter it where there is a potential movement right where the price could potentially move right that justifies the risk you’re taking on your trade otherwise known as risk reward ratio okay so in this case let’s say you know hypothetically okay let’s say this is a resistance right let’s say you went shot somewhere here I said where is the nearest obstacle on this chat right now if you ask me right the nearest obstacle is possibly in this area level over here at this point so from your entry point till the first obstacle there is enough meat in the move right to justify taking the trip and these are the things that you want to look out for right whether there is enough meat in the move right to justify picking the trick okay so this is what I mean by no don’t trade into obstacles and this is the third thing I want to share with you avoid shorting to support avoid buy into resistance now the next thing that I want to share with you is called the boss technique what is boss right boss stands for break off structure and in this approach what you’re doing is to look for confirmation right there let’s say you want to buy you look for confirmation and the buyers are in control before you establish a long position or if you want to shortener and you see that the sellers are in control before you establish your short position so when you look at it right on the shot it will look something like this so let’s say you know market it’s a say approach into this area of resistance you don’t be just selling and this area of resistance because you have no idea whether it might push out higher before I reverse or maybe might just break out of resistance altogether so you want to look for confirmation right that the sellers are stepping in right before you take a short position and what technique you share with you right is what I call the break of structure technique so in this case let’s say you earlier the price you saw reached resistance let’s say it’s on a daily timeframe so what you can do is go down to a lower timeframe like let’s say the two hour time frame and look for a break of market structure so imagine this right let’s say this is the daily timeframe daily timeframe right let’s call it D on the two hour time frame he will look something like this right machi will be in an uptrend okay and what I mean by look for break of structure is that you want the market to show you a series of lower highs and lower lows before I take in the shop position so it can be the form of like this right the price comes down lower hit up higher then break below this low so at this point you know I have a lower high and low a low telling you that hallo the sellers are in control and about you push the price lower so this is one way to identify the strength or weakness in the market this is what I call a break of structure technique another very common variations to eat right is a great classical chat patterns right for example price comes up higher very forms a head and shoulders pattern right this is again I call this a variation of the break of structure technique or maybe comes up higher then it starts to consolidate and then from lower highs into support and then it breaks down this is again another break of structure are you ever getting a lower high and lower loop or maybe it comes up right from a double or triple top lady form a built up in the lows okay in this case would be something like this the heist a form of built up at this lows before it breaks down right this kid is what I call a break off structure so there’s a few variations to it but if you understand price section you will know all the different nuances right that could come along with it so let me share with you a few example of this break of structure technique so first one right or Zn so if you see over here okay at this point right market came into this area of a previous support and resistance again you have no idea where the market is going to reverse it could reverse before this resistance you could reverse making resistance you can reverse right after it peers into reverse into resistance and it reverse from there do anything is possible so this is why if you use the break of structure technique right go down to the two hour time frame okay I just zoom out a little bit and you can see that over here this is where the break of structure technique where I comes into play at this point you can see that this is the resistance a lives on the daily time frame in order to attack a 12 hour time frame you can see that sellers right they are starting to come in right and you know taking control of the market you notice that previously you have a series of higher highs and higher lows but it is juncture you now have lower high and this is the area or area of support right that is being you know guided by the buyers so when the price break below this area of support right you now have a break off structure when you broke below this area of support it breaks me low here you don’t have a lower high and low a low right and this tells you that the sellers are now in control and there’s a good chance the market could continue the war from here I’m not asking you to trade this particular pattern in isolation right I’m asking you to trade descending triangle or here in Shoulders pattern in isolation what I’m sharing over here is just look for confirmation right there the sellers are in control before you take a short trip because you’ve seen earlier on the higher time frame the market is in a downtrend and an area of resistance and what we’re looking for is just sort of like an entry trigger a confirmation right that you know it’s a it’s time to enter the trade okay so this this is what I mean by the break of structure technique and just one more example okay let’s say New Zealand dollar again same thing so if you just look over here market at this point right retest back previous support right echo excess resistance but here’s the thing right you if you trade life right you will always be wondering made well in the market you know retest this maybe could do a retest of this previous swing high tech I guess resistance that could be possible it could retest this previous support they could I guess resistance or I could even go retrace deeper and retest this previous area of support negative resistance so you can see that there is a lot of possibilities when you’re trading in the live markets you have there’s no idea and which exact level the market will reverse so this is where again the break of structure technique comes into play again go down to the two-hour time free in this case let me just zoom out find the level quickly you can see over here the break of structure occurred at this point over here okay so at this point what you have is something like a triple quadruple quintuple top right tested five times one two three four five okay then this is the area of support price broke down from this somewhat of a bell bear flag looking pattern and really break below the swing low when you break below this swing low now you have a break below this wing wall you have a break of structure you have a lower low and lower high okay so this tells you that it’s a good chance the market could continue lower from there and this is how you use the break of structure technique right to let the market show signs or strength or weakness right before you enter a tree and finally finally right to avoid losses right to put your stop loss at obvious levels right I I don’t know how many times I’ve come across I know books right courses right forum right where you know traders just put their stops below support above resistance because that’s what a textbook say is that’s one what the Guru says well the problem with putting your stops at obvious levels is that it gets hunter is very easy for it to get triggered before the market reverts back in your favor let me just share with you a few examples okay so if you look at this over here pound dollar most of you actually know how to identify the trade trade in the direction of the trend by the way you send your stops right that needs a little bit for a little bit of a improvement so if you look at pound dollar okay you can see that over here market right it’s bearish okay let’s see the market broke down this area of support it’s it’s bearish right and maybe that it forms somewhat of a pullback whatever the case is I form a pullback over here trader maybe trade as well shot on the break of this swing low or maybe the event shot on the break of this this downward trend light and when would it put a stop loss well most traders right they will put a stop loss somewhere here here all those right who are a little bit more knowledgeable they say that stops above this swing high over here and the problem right with setting your stops at this level is that it’s very easy to get stopped up because and this three price point there is nothing right to stop the market from hitting higher right there is no swing high there is no resistance yeah there is resistance over here all right but a problem with selling and this house is that resistance is an even not a specific price level on your chart so we’re gonna pull back calm you can see that market need a pullback wiping up all the stops right to get on the highs over here those traders who set their stops above this size also gets knocked out as well and only to reverse down lower okay so if you’re always getting stopped up and you see the market reverse back in your favor is probably because of this all right so pay attention to this so how should you handle this right so what I suggest is to give your stops right more breathing room right set your stops away from markets sure so when you said your stop-loss yourself where is the market structure aired in this case market structure is at this highs the swing kindest resistance irrigate those said it’s smack above this highs give it some breathing room right give it some buffer and one way you can do it is just to use the ATR indicator such ATR pull it out I usually go with 20-period but in this case the default is 14 period but doesn’t matter actually right I go to any period FYI and while you’re the do right is to find out what is the ATR value so in this case the ATR value is about 80 pips so find out what is the highs over here and you just add on 80 pips plus 80 pips so if the highest is let’s say X right so your stop loss would be X plus 80 that is your stop loss and if you do that right you can see that even even if the market spikes above the hinds right your stops right should be away from it and you don’t get stopped up prematurely okay so one more example New Zealand yet a same concept so you can see over here again right the price pulls back right it breaks down auto yet where would trader set your stop loss again probably above this house right because that’s what the the textbook say so I said their stops above the highs above resistance in this case right you probably get stopped out the right as the market tests at the levels once twice a day reverse from here so in this case I’ll be honest right even if you set your stops are 180 are from this highs where you will I think in this case we will still get stopped out okay so it’s not foolproof right but it should prevent or avoid losses for you right especially if you have the tendency to just set in the middle of nowhere or just above the highest or the low so this technique will help you it’s not foolproof nothing here is foolproof right train is all about probabilities never certainties and you gotta embrace it so with that’s it let’s do a quick recap right now number one you want to be trading near an area of value number two don’t chase breakers because when you chase breakouts that’s where the market is prime to do a reversal or pullback and also right there is no logical place for you to set your stop loss number three no trade into obstacles don’t buy into resistors don’t shot into support and before don’t enter your trades too early okay you can use a confirmation the technique like the break of structure the post technique right to type your entry and before I’ve set your stops right away from market structure don’t just set it below a resist I mean below support or above resistance because it’s very easy to get so called hot that in this matter okay so if you want to learn more about the work that I do then just go down to my website trading with Rainer calm the Ling is over here you can see trading with Rainer calm and just scroll down a little bit and I got a couple of trading guides for you depending what you want to learn if it’ll learn more about price action trading support resistance candlestick patterns then just click this orange button and I’ll send this guy to your email for free or if you’re a learn more about trend following writing trends at the market right then download this ultimate trend following kite right just click this orange button and I will send it to your email for free okay so that’s it I have come towards the end of today’s video and I will talk to you soon you

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