So how do you set a proper stop loss as a complete beginner? What's going on guys, It's Ricky here with tackled. Solutions If you're new to the channel, make sure that you subscribe and if you learned something new, make sure you drop a thumbs up. So I'm going to start sharing my screen so you can see exactly what it is. uh, that I'm looking at over here I'm gonna give a series of examples.

I Actually, uh, shared this example with my Learn Plan Profit group. They liked it so much that they're like hey, I think that this would be very useful information if you share it on. YouTube For someone that you know might be making the same mistake and the mistake that we want to talk about is how many times have you guys entered a day trade or a swing trade right? You're entering a position and you're trying to manage a risk. You're trying to stay disciplined.

But when you're holding yourself accountable and you and you set a stop loss or a trillion stop loss, maybe you're setting it too tight, maybe you're setting it too far apart and you're either losing or getting stopped out very quickly and or losing more money than you're comfortable with, right? I'm really big on position side so please just let me explain the overall example and after I'm going to give an analogy on why I find it to be so useful. so again I Really hope that you learned something new and just friendly. reminder I Do Trade Live Every Day! So I Don't just post my profits and show you a fancy you know Green number of fancy red number and just be like hey, that's how much I made or this is how much I lost I Actually Trade Live every day exclusively for my Learn Plan Profit Group. So if you're tired of guessing and you're actually wanting to learn more about the market and what it's like to see someone buy and sell a stock again, click that second link down below.

Learn more about a Learn Plan Profit Group and see if it's a good fit for you. We are running our biggest sell right now for the end of the year sale and we'd love to have you as a part of the team if you see us to be a good fit for you. So let's go ahead and jump right into it. I'm going to use Tessa as an example, you know I have an open swing trade on it about 2 300 on the open but it doesn't matter I don't plan to sell it anytime soon Someone was asking me like hey, Ricky like when do you plan to cut losses and again, this is a really big question for a lot of people because you know we all trade with different dollar amounts so you know if I'm down, you know.

Let's say I'm down two thousand dollars instead of being up someone would be like oh my God Ricky You should be cutting losses on that, but they're not taking into consideration of like what my plan is, what my intention is and this is why I wanted to make this video for you guys. So I'm gonna do this in like uh, instead of using the dollar amount that I'm trading with I'm just gonna use ten thousand dollars, right? A very common mistake that I see a lot of beginners make and I've made this mistake more times than you have and I'm using myself as an example. Um, a very common mistake I've made. Um is let's say you're trading with ten thousand dollars.

That's what's in your trading account. You're trying to swing trade, right? Uh, you want to go in first swing trade. Which means that you're not buying and selling it within the same date. You're holding it for a number of days because you see, you know bigger recovery potential over a period of time.

So for Tesla you know, obviously it's very oversold. For some people, this could offer a good swing trade opportunity meaning that for a number of days it could begin to rally. Um, and you know you can make a decent return, right? Well, on average a beginner Trader would be like okay, well I have ten thousand dollars to work with. So I'm just gonna buy ten thousand dollars worth of Tesla stock right now at 123.

um, fingers crossed and hopefully it begins to recover. But to manage my risk I'll set a stop loss. Let's say that you know we. We called it a golden ratio.

If you're part of my Learn Plan profit group, it means you know what is your upside potential versus your downside risk. You always want to have a ratio that is, um, that correlates to your success rate. So if you're someone that is just getting started and you don't have a very high success rate, you're probably going to want to be closer to a five to one ratio. I mean that five percent upside for every one percent you risk.

If you're a little bit more consistent then you can choose to be a little bit more aggressive, right? A two to one, a three to one whatever the case might be. The really cool thing about this is that you know the beginner Trader that starts trading with ten thousand dollars, they might just be hoping for the best and sometimes they might get lucky and they might begin to. Rally They lock in profits and based off of what you know on the day chart for Tesla So I'm going to zoom in just so you guys can see very clearly. I'm going to use my little trendline tool here and from the current price point, if we hit that moving average, that's around a 37 return, right? 37.

Roi That's a huge Roi With ten thousand dollars, we're talking about a thirty seven hundred dollar return, right? That's what I have labeled right? here. That's my Max potential profit in a perfect world. We obviously don't live in a perfect world, but I Just like using that as an example. Now, I'm using the five to one ratio as an example.

Um, and the reason I'm using that as an example is I'm just assuming that you know you're an absolute beginner, that you have a lower success rate. So I'm trying to be a little bit more conservative on that side of things because it offers a 37 Roi potential for this swing trade, right? That's my upside potential. Um, at that five to one ratio I Can tolerate a 7.4 percent loss. Seven point Four percent.

Is it still the decent amount, right? Ten Thousand dollars. Seven Point Four percent. We're talking about seven hundred and forty dollars. I Mean you know that's a decent chunk I Don't know if a complete beginner would be comfortable, you know? Uh, risking that or tolerating that.

So let me explain right? You always hear me talk about position size. Yesterday is a great example of this, right. I Made over twelve thousand dollars. Uh, I Uploaded the video.

Uh, day trading Tqq. But if you look at TQ Ttq only moved. It ended the day at break even. It was zero percent right.

How did I make money when Tqq was break even by managing my position? There's nothing wrong with buying at oversold levels, but when you understand that we don't, we do not have confirmation. We are not fully indicating signs of a reversal. This is where you can really get into danger, right? What's one of the most common mistakes when you are buying before confirmation? Let's say the ten thousand dollars you buy at 123 and then it continues to sell off. Now you have no options, right? You were hoping for it to recover, but now if it begins to sell off, your only option is to manage and mitigate your risk and accept your max loss of 740 if you hold yourself accountable right.

Or you can cut losses sooner. What is a way around that? So the way that I approach it: I'm not saying that you need to I'm just saying that this is the way that I have found a more effective way to dollar cost average into a swing trade. So let's say that I'm working with ten thousand dollars. It's the exact thing that I'm actually doing with you know, my Tesla position.

right now. Let's say that I have ten thousand dollars to work with. We have a rule within Learn Plan Profit I'm going to have a more conservative rule for you guys. I'm thinking that you're a little bit more on the beginner side of things.

We have a rule that you should never be invested before confirmation more than 20. But as of right now, I'm going to say 10 or less just being super conservative. That means that out of the ten thousand dollars you have in your trading account, the example would be your initial position When it begins to show signs of a support or showing signs of a reversal, it should not be larger than one thousand dollars. One thousand is equivalent to ten percent of ten thousand dollars, right? It's a weird way of thinking, why would I only buy one thousand dollars if I have ten thousand dollars to work with Because it's not certain that it's actually going to begin to recover.

This is where the dollar cost average comes in. But the great thing about this is you might be like, well, Ricky I'm gonna miss out on all the potential profit if it actually does begin to recover. You can buy it in increments, right? There's no such thing as a perfect Trader There's no such thing as a perfect investor. You will never be perfect I would rather be calculated in the way that I take advantage of an opportunity.

Let me explain why. Yes, if this thing begins to Skyrocket you will have the dollar cost average and your average purchase price will be higher than 123.. But guess what? It's still a successful trade. Right direction is in your favor.

You waited for confirmation and you're building healthy habits, right? And you're minimizing risk. Let me explain. if you're in with 10 and I want to talk about worst case scenario worst case scenario. if you're in with 10 which is one thousand dollars, you were originally trying to go in with ten thousand dollars, but by only going in with one thousand dollars if this thing begins to sell off and even if it does lose the full 7.4 percent, that's 74, think about that difference from seventy four dollars right for 740 down to 74.

how much more effective will you feel even at worst case scenario because I I can only speak from my experience. but I know that I've made this mistake many times. where I go all in in the very beginning. fingers crossed that begins to go south and I feel hopeless I feel like the Market's against me and I want to blame everyone else for my lack of success.

But guess what? it is your fault. It is my fault, right? It is our own fault for initially taking a position that was too aggressive that we couldn't tolerate, right? Never take a position in which you cannot tolerate by going in with 10. Yes, you do run the risk of potentially missing out on huge profits because you're only lightly invested. but guess what, you're at least more calculated and more effective and you can always dollar cost average as you get that confirmation.

But the great thing about this is on worst case scenario, even at worst case scenario, if you lose 7.4 percent of a thousand dollars, losing 74 dollars is a lot easier to tolerate. You're going to think more clearly and less emotionally. And for some of us, that's a huge win right? That promotes healthy habits That yeah, you took a risk by still going in with 10 before confirmation, but you did it in a calculated way just like I did yesterday, right? The market sold off Originally, Tqq was down three or four percent I went in I started dollar cost average and I started to buy a couple of shares right? I think I bought around like fifty thousand dollars worth of Tqs I trade with over half a million dollars Tqs began to Skyrocket the last hour of the market open and guess what? I stepped on the gas when Direction was in my favor. And that's the beautiful thing about this.

You shouldn't be afraid to take advantage of any opportunity. It's all about position size I can take advantage of the riskiest opportunities, but if I only buy one share if I manage my risk and I and I barely buy anything where it's enough money for me to take it seriously, but not so much that even at worst case scenario I become an emotional mess that's an effective position, right? That's right where I'm encouraging you to take time and find that balance for some of you. ten percent might be to life for some of you. It might be too aggressive.

There is no perfect number for the masses. Your job is to Simply Implement progress. and I hope that this video can make you aware of if you often find yourself stop blossing out too quickly and or stop lossing out to kind of like late where the dollar amount is is kind of like a tough pill to swallow because of how much you're down, then this approach supports both cases because if you're stopping out too quickly because of how much money you don't want to lose by taking a smaller position, you will be more willing to take a larger percentage loss. But it's a smaller dollar loss because of a smaller position size, right? And then now, when it comes down to, um, the overall dollar amount that you're actually losing, even at worst case scenario, you're still going to feel calculated.

and if you still have to accept that loss that's 74 at 7.4 percent then so be it right. You can accept that loss and it's a much easier pill to swallow that. Yeah, it's still a red trade, but it's not something where you bit down more than you can chew. and yet it's asking yourself right anytime that you take a trade, Anytime that you open a position, it's a position that's open to risk.

Your job as a Trader and your job as an investor is to minimize that risk and to not be irrational. and in my opinion, by managing your position size and keeping it light early on is something that aids both ideas right, both issues and promotes healthy habits. And this is why I Think managing your position size early on on a reversal is so important because not even on, not just on worst case scenario, does it allow you to think clearly, but even on best case scenario, you're still able to dollar cost average and feel effective during that rally, right? You feel in control. And that's not something that everyone can say when they're fully invested in an initial position and then things begin to go south right? The analogy that I want to give you and again it's just kind of like my dad analogy and I make these jokes all the time with our learn plan.

Profit Group is I had a member ask me Ricky why do you buy you know a stock you know I was investing in Tesla stock I was investing in Amazon stock and if you guys have recently seen Tesla and Amazon stock have recently sold off, right? Why are you buying these stocks if they're still selling off And that's very true, right? I Talked about me only buying a small amount of these stocks right? Because they still are not indicating signs of a reversal or a recovery, but he didn't understand why, right? And the example that I gave them the analogy that I wanted to use is you know my job is to seek opportunity, right? I'm never going to be perfect. But if I see that the current price point is attractive enough, right? the ROI potential makes sense, right? My job is not to avoid risk. My job is to manage it. So that is why I take a small enough position where I feel like I have enough money in it to take it seriously, but not so much that even if things get worse, I become irrational I don't need it to recover now, but if it does, I will buy more when it does right.

And the analogy that I want to give you is imagine yourself as someone that's trying to collect water. You're in the desert right? It's about to rain or it looks like it's like about to rain, right? The great thing about that is you have 50 buckets to work with. There's clouds outside and the idea would be okay. Well, you know it's night time and you're gonna go get some rest.

so if it starts to rain overnight, you're probably not going to be quick enough to take them out there. So the idea would be that if I begin to see clouds, if I begin to see signs of rain, I can maybe put one or two buckets out there right? just in case I don't have to put them all because you know the wind might take them. but I'm okay with putting one bucket out there. So if it does begin to rain, I begin to collect some of it.

But if it doesn't and that bucket Falls and it doesn't end up running, then it's okay. It's a risk that I'm willing to tolerate, right? But if I have that one bucket out there and then I begin to see those sprinkles right? I'll start putting out more buckets out there. collect more rain, right? It's kind of like when the stock begins to indicate signs of reversal. I'll start adding more to it once.

I get that full-on confirmation I'll start to work towards getting closer closer to those 50 buckets at the end of the day. Do I always have to use those 50 buckets to try to collect the most rain? No, because again, it's a little bit more difficult to tolerate, right? If the wind were to pick up and you know, spill some of those buckets. The idea is is again, it's managing your position size at risky levels. Yes, markets are very oversold, and yes, more kids can't always get cheaper, but that shouldn't scare you of taking advantage of an opportunity.

There's this very famous quote saying that every previous recession is viewed as a missed opportunity, but every current recession is viewed as a risky time to invest. Think about it. it's all perspective because you can always look back and be like hey, I should have done this better, But when you're in the position, it's hard to look into the future and be like this is a good place to put myself in to tolerate the short-term pain. hopefully for the long term gain, but it's what seasoning comes with, right? The more experience that you gain, the more recessions that you experience, the more comfortable you will be buying into them right and then riding them back when they recover.

You should never be afraid to take advantage of an opportunity. It is simply your job to manage and mitigate that risk. I Hope that this video did a decent job in explaining why position size is a great thing to take into consideration when trying to manage a risk, especially with stop losses, swing trades, and even day trades. So if you have any questions again, you can always reach out to me via Discord and that's going to be that first link in the description or send me a direct message via Instagram I am verified and that's at the link down below I Only have one Instagram account I only have one YouTube account I will never message you first I Don't have a WhatsApp I Don't have a telegram My team will never reach out to you I Don't manage other people's account I Offer one thing and it's my learn plan Profit group.

It's the second link in the description of this video. We're running our biggest sell. You heard me talk about them. It's the only team that I work with on a daily basis and they get to watch me trade live every single day.

So if you want to learn more about it, take two minutes. click the second link and see if our team is a good fit for you. Don't forget today is the last day to enter our PS5 giveaway and if you want to learn more about that, that's going to be the fourth Link in the description and the giveaway winner will be selected on Monday. So I appreciate your time.

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