In today’s episode, you’ll discover when you should cut your loss without regret.
So go watch it right now...
** FREE TRADING STRATEGY GUIDES **
The Ultimate Guide to Price Action Trading: https://www.tradingwithrayner.com/ultimate-guide-price-action-trading/
The Monster Guide to Candlestick Patterns: https://www.tradingwithrayner.com/candlestick-pdf-guide/
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Pro Traders Edge: https://www.tradingwithrayner.com/pte/
Pullback Stock Trading System: https://pullbackstocktradingsystem.com/
Price Action Trading Secrets: https://priceactiontradingsecrets.com/
So go watch it right now...
** FREE TRADING STRATEGY GUIDES **
The Ultimate Guide to Price Action Trading: https://www.tradingwithrayner.com/ultimate-guide-price-action-trading/
The Monster Guide to Candlestick Patterns: https://www.tradingwithrayner.com/candlestick-pdf-guide/
** PREMIUM TRAINING **
Pro Traders Edge: https://www.tradingwithrayner.com/pte/
Pullback Stock Trading System: https://pullbackstocktradingsystem.com/
Price Action Trading Secrets: https://priceactiontradingsecrets.com/
Hey hey, what's up my friend, so in today's episode i want to talk about. How do you know when, should you cut your laws? I believe this is a topic that you know you might be struggling with right. If not, you won't be watching this video and i want to share with you know a simple technique that you can use to know when you should cut your loss, but first right, let's talk about how not to cut your loss. There are a few scenarios right where many traders they they cut their laws right in one of these manners, which i feel that is the wrong way to cut your laws number one, they cut their laws based on their feelings.
Here's the thing right, if you cut your loss based on how you're feeling at a point in time, chances are more often than not. You are cutting your loss when the market is. You know at the absolute lows where the pullback is about to end and reverse back in your favor. Usually when you can no longer take the pain anymore, then you cut your loss.
That's when the market is about to reverse back in your favor. So don't cut your loss right based on your feelings, because, that's usually you know uh the worst possible time number two don't cut your laws right based on how much money or how much trading capital that you have left. So what some traders might do is that, let's say their trading capital is five thousand dollars and they tell themselves okay, i will cut my loss right when my trading capital drops to four thousand dollars now. Here's the thing the market doesn't care, how much money your trading account is worth or has left right.
It goes where it needs to go. So when you cut your loss right, it doesn't make sense to be basing something that is dependent on the size of your account, because the market really doesn't know what's the size of your account and it doesn't care. So it doesn't make sense. Okay and the third thing is you: shouldn't cut your laws right based on news release, fundamental news release, because here's the thing when you cut your laws right after a piece of news, or maybe you want to see how the fundamentals are like by the time the Fundamentals has sour by the time the fundamentals has turned negative.
You could lose a lot more already on your trade. So don't wait for news to kind of confirm right whether you should cut your loss or not. So now you might be thinking okay. So then, how should i know when to cut my loss all right, so if you're a technical trader, meaning that you employ technical analysis to trade, the markets, then i got one very simple technique right for you to use right to know when to cut your loss And this technique goes something like this.
Your stop loss right should be at a level right which invalidates your trading setup. I believe that code is uh from uh one of the market. Wizard called, i think it's broof. Is it bruce kaufner? I believe it's him.
I might be wrong, but basically right the saying goes something like you know. Your stop-loss right must be at a level which invalidates your trading setup. So let me give you an example right, so you know how this works. So let's say you your trading setup. Is you know, buying a stock in an uptrend okay, and you are long right, because this market is still in an uptrend so clearly right, your stop. Loss right should be at a level right which invalidates that uptrend. What does it mean? So it means right if the market reaches your stop loss right, that up trend right will clearly be invalidated. The uptrend that uptrend will be destroyed.
Does it make sense? So let me give you another example: let's say how about you uh, you, trade, a double top chart pattern right and you you want to short the market because you notice there's a double top pattern. So, where should your stop loss be well, if your basis of that truck that trade is just a double top chart pattern, then clearly your stop loss, so it must be at a point right where your double top chart pattern is invalidated and clearly, where would that Be that would be above the highs of the double top pattern, because if the market breaks above the double top pattern, you can imagine that that pattern is no longer looking like a double top make sense. One more example: let's say uh: maybe this market is uh, you're trading, a range market right, it's contained between the lows of support and the highs of resistance, so you buy low, sell, buy support, sell resistance. So let's say you buy at the lows of support in the range, so where should your stop loss be? Well, your stop loss shouldn't be in the middle of the range or at support of the range, because at this point, right support is still intact.
It doesn't make sense to be cutting your loss when the price is still contained within the range, so it only makes sense right to cut your loss right when the price breaks down breaks below the lows of the range. So that's where your stop-loss should be. Let's say support is here: your stop-loss ideally should be somewhere over here below support right, the buffer below it. So clearly, if the price breaks below support and hit your stop loss at this point right, the range is clearly broken.
Support is broken and you should get out of the trade. So the the key thing is is right: your stop loss right must be at a level which invalidates your trading setup as long as your trading setup is intact. If it's not invalidated right, you shouldn't cut your loss, yet you want to cut it. However, you want to cut it as soon as possible right when your trading setup is invalidated.
So usually, the key thing is to identify your the key area on the chart right where, if the price breaks below it right, your trading setup is invalidated for support. If you trade range right, it might be below the lows of support. If you trade, a moving average bounce right, let's say the price has been. You know: testing the 50ma for the last two or three times has been respecting respecting it. If the price this time around break below the 50ma. Clearly, the 50ma is no longer holding up the support and you should also get out of the trade. So hopefully these few examples right give you a good idea to know. When, should you cut your loss? Okay, so so with that said, i wish you good luck and good trading.
I will talk to you soon. You.
Wish I saw this video earlier. ZOM is definitely a double top, I'm still in it after buying ATH. ugh…
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Thank you this is very useful, often I cut too soon but then see the price I originally expected. Thank you.
You are my guru. You are my mentor….I am always learning great things from U…
if I have a stop loss placed at a level where structure becomes invalid, how do I learn to cut losses before stop loss is hit???
I've never related to another trader like the way I relate to you and your advice. I have learnt very valuable information on this channel and its all for free. Thank you for doing this Rayner. Stay Blessed.
what you say about the systematic trading advertisement here
Hey Rayner, can you share under what condition you choose to stay out from the market?
Hello Rayner,
May I kindly have a response to my comment?
😱 Rayner please let HEEELP!,
If using a 1% risk(stoploss) and 2% reward for proper money management or your suggested ATR (ex. 1 ATR stoploss), how do those work with this suggestion?
I'm asking because sometimes when I wait for my setup to be invalidated, it's greater than 1% (going against my money management plan) or 1 ATR for example. Thank you
hee whats up @rayner teo and amazing people. got a question and maybe its a very dumb one but i cant figure it out. if someone wants to win someone else has to lose right…? ofcourse a lot of volume in one minute creates bigger candle's but what creates that big candle? for example where there 1000 out of 1000 traders that all went long is what created that big green candle or do you get a big green candle if for instance 600 traders went long and 400 went short i hope someone can clarify this for me. thx for reacting and have a great day.
Great content. If only I’ve learnt these pointers earlier, would’ve save myself from some expensive lessons 😂
Just wanted to say thank you for the video. I keep learning some good tips between you and Shay. Enjoyed the Tradersfest, by the way…you all did a great job.
JT
Question for you: If ,let's round it up, 75% of traders always lose out – if the sentiment on whatever instrument is quite large, should we maybe look to be contrary about this? Because if 75% are bullish, but remember 75% are losing traders, surely the sentiment is most probably wrong?
😱 Rayner please let HEEELP!,
If using a 1% risk(stoploss) and 2% reward for proper money management or your suggested ATR (ex. 1 ATR stoploss), how do those work with this suggestion?
I'm asking because sometimes when I wait for my setup to be invalidated, it's greater than 1% (going against my money management plan) or 1 ATR for example. Thank you
Hi I just start learning fx skill from your videos I pray for success thanks pls which broker will you assign for me am in Nigeria thanks
My history center tab keep on appearing and I can't close it how can I fix it
You're an awesome person for helping everyone to understand the market.❤
Hey Hey Rayner
I do like your videos
All of them are useful
All loves and thanks to u bro
Rayner I love your videos, How about a Christmas special for your followers on Telegram, 1 week free trading tips ❤️😁
Hello there, can someone please help me? I have been trying to learn trading for a while now. But i cant seem to understand how does buying and selling a coin gives us profit. I understand the concept buy low and sell high. But i dont understand how does it gives us profit. Could anyone please help me? Thank you very much.
Thank you for posting the 2020 TradeFest recordings! Happy holidays brotha 🎄 🎁
You give so much information for free and it makes me wonder what is your incentive to do so. I signed up for a premium online lesson but after watching each of their videos I come to you to gain more clarity as I'm a slow learner. Why do you not package all this into a premium course of your own? You would be making so much more money considering your goodwill. I would pay much more than what I would otherwise pay others.
This was meant for me today I bought fobu at $34 and was bouncing in the 40s this morning pre market i felt it was going to go down and sold well it ran to 50's 😅 thanks for the advice I will set stop loss 🙃
Thank you Rayner, loving these short video's even more, I'm usually constrainted due to my busy schedule, these video's make it easier for me to keep track of your lesson's. Much appreciated.
So when i buy shares of a stock. What type of order would I put in to set my stop loss and when do i set my stop loss?
Could you make a video on what's a good risk to reward ratio? Also how many screens should a trader have?
Incorporating
1 ATR AND %LOSS (1%) AND KEEPING YOUR STOP WERE IF IT IS HIT IT INVALIDATE YOUR TRADING SETUP
how do you do it
do you have a video that shows people how to deal with stop loss hunting? / market maniuplation during pre market or after market hours?
well I just cut a loss and this video came out lol I'm guessing today considering the huge moves in the market due to covid news I won't be the only one though but it's fine, losses happen, moving on!
hey hey whats up 🙂 i trading 5x years 🙂 and your videos help me a lot. i got systém and make money.