Maximizing profits. Man, it is so important And today we're going to be talking about the best ways to do that. And at the end of the day it all comes back to risk management. Okay, like um, and maybe you've never heard of risk management At the end of you know, like remember when we're talking about trading um, whether you're like an energy Trader or a bank you know or or all of these things we might just be buying.

you know, low price stocks for five minutes or something, but we're all under the same. OSP is of trading and managing risk. And and what I mean by that is like let's say you work at a oil and gas company. okay, oil Like you've heard the term hedge.

A lot lot of people heard hear the term hedge or hedge fund and they just think like, well, that's just trading. Well, not really. Okay, Like if you're at an oil firm or or a hedge fund, a lot of your job can often be taking the opposite side of your current trade. like like I Know it sounds crazy, but like say you're buying a position in a in a in a trade that that you think you want to build a position in, but you might be kind of picking the bottom.

like like you're buying a stock that's been downtrending. You might actually be shorting the same stock you're buying because you know the trend is down and you don't know when it's going to turn. I Mean nobody knows when it's going to turn. So as crazy as it sounds at a hedge fund, they may be taking both sides of the trade to put some profits on that short side.

and then when the stock starts bottoming and trending back up, they take off the short trade. they add into the long trade and then they hit the Home Run Um, same with again, like energy firms and Banks like they may be buying positions in certain equities and and and certain asset classes that are you know, counterintuitive to their business, but they recognize that there is opportunity there. And while you're not going to do that with a small account, I I Mean you can't hedge with a small account. The biggest point is what you need to do as a small Trader is you need to stack green trades.

That is your number one goal I Don't care if it's long I Don't care if it's short I Don't care if it's in day trades I Don't care if it's in swing trades I Don't care if it's in crypto I Don't care what in Nfts, any asset class. you need to come to the point where my job is to manage risk and my job is anytime. I Place a trade doesn't matter what it's in equities options. Again, crypto, whatever it is I Always have to set a predetermined amount or percent that I am comfortable with losing.

And the reason that is is, you're never going to. You know. Take you know. listen, people, Take crippling losses all the time.

but you're never going to plan for a C crippling loss. Your job is to determine. Okay I got a $1,000 position in this stock or this Equity or this option or whatever it is I'm okay with $100 loss because I think my upside is three to four or five times. That because you can't control what the stock does, you can simply place your trades and manage your risk.

And in this situation, trade goes against you. You lose a hundred bucks, you come back tomorrow, place a very similar trade. Trade works. The stock has range, The stock has volume, it's low float, It has a catalyst.

All the things we look for Now it spikes 30 cents, and now you made 300 bucks even though you lost 100 yesterday. That that's how you get consistently profitable over time by taking chip shots, building your account, scaling your account, and not aiming for home runs, or taking crippling losses. And like the best example I can give of this and I think it's a very important teaching aspect I Call it the rule of five. Okay, and please take notes on this.

This this simple idea can actually you I'm sure you've heard cut losses quickly I'm sure you've said you know, keep your losses small I mean all these things we talk about, but this is one of the best ways I can think of to really cement that to you. Okay, so take notes. The rule of five. The rule of five dictates that if you make one trade a day for five days Monday Tuesday Wednesday Thursday Friday You can lose 100 on Monday You can lose 100 on Tuesday You can lose a 100 on Thursday Wednesday lose 100 on Thursday Come back on Friday and make 500 bucks and guess what? your green on the week with a 20% win rate.

Now our goal isn't to trade to make a 100 bucks a week. Okay, you can make more at working at the McDonald's okay, but the point is, it's a thought experiment. The point is that you can be green on the week with a 20% win rate simply by keeping your losses small at a predetermined amount that you're comfortable with That you know that you can make back in, you know, one or two days. and that's the power of the rule of five.

You're up 100 bucks a week on the week with a 20% win rate. But it only works. This is the thing. It only works with small losses.

If on Wednesday you lose a grand. Well, whoop, you do. If you make 500 bucks on Friday, you're still down. What? 600 bucks In this example, terrible brutal week? Or maybe it's six grand that, my friends.

If you're thinking about it, if you're sitting there and that stock is headed towards your stop and it's a penny away from your stop a predetermined level, a predetermined price, a predetermined amount that you were comfortable with, and you go to click that cancel button. Guess what? You just broke the rule of five. You're going to turn that $100 loss into 500 or a th000 or five grand or who knows what. And now you're going to have to spend weeks or maybe months.

Or who knows if it's a really bad trade. Maybe years just to get back to break. Even so ask yourself, do I want to spend weeks or months or years to get back to break even or do I want to hit that sell button or leave my stop order in place like listen I've been there I've been day trading 18 years I made every terrible mistake I know and and this is important. Some of my biggest losses, biggest losses like huge terrible disasters I canceled stop orders on every one of them.

Every one of them. well I think like once I got trapped in a T12 halt was like a disaster but it wasn't like quote unquote wasn't my fault because they got like investigated by the SEC or something but every other one hundreds of Terrible Bad trades in my career. every single one of them I canceled an order on and I think back what if I just would have left that stop in place, just left it in place, would have moved on I would have had my buying power I would have been yeah I would have been happy. Nobody's happy about taking losses, but I wouldn't have had crippling losses.

Huge losses, losses that took weeks or months to make back. So that's why it's so important to follow. having a trade plan. Stick to that stop.

Manage your risk. Going back to the beginning of the video. Remember all. Traders Whether it a bank, whether it an oil and gas firm, whether it a hedge fund, or just you and me retail Traders Trading our own money, our number one job is to control risk, not M You know, mitigate disaster and stack those green days day after day.

And maybe for you with a small account, those are $50 days. But guess what? You make good decisions. You build your account all of a sudden. $50 days become $500 days.

All of a sudden. Maybe it's months, maybe it's years. Those $50 days become $5,000 G days. But what everybody messes up is they want to go from A to Z and they want to skip everything between.

Okay, understand that it's a journey. It's going to take time and you're going to scale up over time, but you'll only get there if you don't take those huge losses. And the best way to do that? Have a plan clearly. Define Stops.

Write it all down, Never cancel a stop and you will live to trade another day. So it's kind of a 10,000 foot overview on building an account, maximizing your gains, minimizing your losses. You know, growing your account over time, but at the end of the day it's a 10-minute video. Can I teach you everything about risk management in 10 minutes I can.

But I can teach you everything about risk management on What's called the Daily Income Traser system Webinars: These are four webinars a day members only. Small, focused great Community for an entire year? Okay, I Can teaching risk management in a year? I Guarantee it probably teach in six months, but the program's a yearlong. You can get a free tour of it by clicking that link below. Joining these webinars all through the day.

100% free, 100% live every question answered and you see a tour of what we do every single day. And it's the best way to grow a small account into a medium account into a big account because it takes time. But if you know the right strategies and the right methodologies that we teach every day in the Daily Income Traer system, you can be on your path.