Hey hey, what's up my friend so in today's episode right i want to share with you when, should you not put on a trade so so before we get started, i get some comments from you know you guys and girls right. Tell me: hey rayna! You look tired man get some rest, you know you need to rest. Well, you don't look too good. So in today's episode i brought a cup of coffee along the way to hopefully perk me up right.

Well, while you know producing this uh episode, so let's get back to our topic right. When should you not put on a trade? So here are a few things. I look for right. You before i put on the trade number one.

The price right must not be far from the area of value right if the price is far away from the area of value, i usually will not want to put on the trade. So what do i mean by this? So imagine that the market - let's say it's in a uptrend - it respects the 50 period moving average. Every time it goes up, pulls back towards the 50ma bounces go up higher, pulls back to the 50ma bounce up higher. So you can see that this market tends to you know, find a potential buying pressure at the 50 period moving average, so the 50 period moving average serves as an area of value.

So clearly, if you want to be buying in this uptrend, you don't want to be buying when the price is far away from the 50 period moving average, because when it makes a pullback, you will likely get stopped out of your trade. So this is what i look for. I always look at the chart and ask myself: where is the area of value once i've identified it right? I want the price to be trading near the area value and not far from it, because if it's far away from me chances are, i will get stopped out on the pullback okay. So that's the first thing right: the price uh, the price uh being far away from the area of value number two chasing breakouts, so chasing breakout is again right, a big no-no, and why is that? So? The reason why many traders right love to chase breakouts is because it's exciting right.

You look at the market. Oh, it's so bullish right now, look at the huge candles right, three, four five green candles in a row and usually when you see such price action, it's a a warning sign it's a red flag that this market is it's a bad time to enter, because when You chase after the market has made. You know such a big move within a short period of time. It needs to breathe.

Imagine you spring 50 meters right, give it your all. Let me ask you: what are the odds of you? You know sprinting the next 50 meters at the same uh, the same capacity capacity that you have done earlier. No right, you need to rest, you need to pause and the same for the market. If it moves too fast too soon right chances are.

It needs to pause, it makes a pullback and sometimes even a reversal, so don't chase the markets right. I know it's there's two conflicting feelings down here. Number one. Is that you're afraid you might miss the move right? You might miss the next big wave coming up, and then second thing is that you know, based on your own experience right the number of times that you got caught chasing the markets.

You know that it's the wrong thing to do right, so don't chase the markets, and that also will bring us to another problem which i will explain shortly. Number three don't put on a trade when there is no logical place to set your stop-loss. So, let's say, for example, you chased the market earlier, the market closed, bullishly right for five days in a row, huge big bullish candle, and you think that oh man, the market, is going up today. Right for sure, you know guaranteed, so you go along on the sixth day and by doing that right, you would realize that when you chase the market after es made a huge move, there is no logical place for you to set your stop loss.

So what do i mean by this right? So if you chase the market, let's say you're long, you're bullish, you want to set your stop loss right at a logical level, a level right, an area where market has difficulty you know breaking below. For example, any area of support, for example, could be a respected moving average, for example, could be an upward trend line. But when you chase the market, there is no such price structure that you can lean your stop-loss against, because when you chase the market right, the market is so high right and there is no like price structure right to support these higher prices, because it's not like A slow and steady uptrend where you have a series of higher highs, higher lows: higher highs, higher lows: higher highs, higher low square. You can reference the previous swing low to set your stop loss when you chase the market right.

Such price structure is not available for you to set your stop loss. So when it reverse right, you will be. You know, uh, usually swift, right towards the downside as well, and that's how you get stopped out. So so, if you do have a logical place to set your stop loss right, maybe because you are, you are thinking of chasing the markets.

Maybe because you know your stop loss, or rather the nearest price structure is very far away. Then forgo the trade right. Don't put on the trade okay, so that's a third thing number four! Your wrist is too large, so sometimes right you! This is especially for those of you who have a small trading account. So sometimes you follow your trading plan.

Okay, you know trade, the trend area of value. You know where to set your stop loss, but because your account size is too small right, maybe if you're trading stocks and the stock has a very high a dollar value, you realize that even if you set a proper stop loss, all right, your small account size Is not able to withstand it so, instead of risking the usual, let's say one percent risk of your account. You realize that if that trade hits your stop-loss, you might lose 30 of your account. Even though you are trading according to your plan, then my suggestion is again right.

Don't take the trade, even though you know it meets your requirement, because your account size is too small to handle it right, so just forgo that trade. Maybe you want to trade a a stock that isn't has uh, doesn't have such a huge dollar value to it. Maybe trade other markets like fx, where you can trade. You know, uh nano, lots and stuff like that.

Okay and fifth, for one right. The final one is that don't put on a trade right when you want to get even with the market. This is especially after a few losing trades. So you follow your plan.

Religiously right, you buy uptrend, you shot downtrend and you still suffer losses and you feel angry with the market. You want to get even with the market and usually when you want to get even with the market. You'll find all sorts of lame excuses to get back into a trade. For example, let's say you, you buy an uptrend.

You got stopped on a pullback when the market breaks above the previous swing high. Your thought might be. Oh, i'm still trading with the trend right price is about price is about to break higher. I should go long right now and just find some lame reason to hit the buy button, and that's you know getting even with the market, because when you get even with the market, your emotions take control.

When your emotions take control, your actions becomes inconsistent and when your actions become inconsistent, your results become inconsistent. You might even you know, suffer like blowing up. Another trading account right, so don't put on a trade right when you, when you know right consciously that you're trying to get even with the market when you want to revenge trade, that's usually a big big red flag as well. Okay.

So, as a quick recap, here's what we have this uh discussed today, number one: when should you not put on a trade when the price is far away from the area of value number two, when you are chasing breakout when you're chasing parabolic move when the market Has moved too fast too soon right, that's usually a bad time to enter a trade number three. There is no logical place for you to set your stop loss because the nearest price structure is very far away. Number four: your risk on the trade is too large and number five. When you feel it, you know you want to get back at the market, get even revenge trade, that's where you should not put on a trade as well.

So with that said, i wish you good luck and good trading. I will talk to you soon and the coffee says: bye, bye, you.