Hey hey: what's up my friend so in today's training, you'll discover: why does your stop-loss always get eaten and how do you avoid it right? So here's the thing right! You when you put on the train, you know: where is your entry point? You know, where is your stop-loss? You know, where is your take profit level, but, interestingly, the market seems to only know where your stop-loss is it always hands for your stop-loss trigger. Is it and in reverse, back right in your intended direction and finally hit your take profit level? Has it happened to you and why does it happen? Well, there are few reasons for this reason number one is this: you use a fixed, stop-loss, okay, so here's the thing the market price structure is always changing. Volatility in the market is always changing if you're using a fixed, stop-loss right, then it's same to the market. I don't respect you right, I'm gon na treat you the same all along and and guess what you're gon na get stopped up repeatedly over time.

Let me give you an example. Okay. I know you love examples. So if you look at this chart, some of you might be thinking to be buying.

Some of you might be wanting to sell, doesn't matter, let's say you're, going with the sell approach. The current price now is about 76 20 right. The current price about here is about 76 20. Roughly so, let's say you are looking to shock this market.

Let's say you go with the 200 pips stop-loss right. That sounds a lot right: 200 pips, so 200 people stop-loss, is about 78 20, which is about this level, and that is your stop-loss order, which is about 200 pips from your entry price from here to here it's about 200 pips and here's the thing. If you look at this current price structure, does that stop loss level make sense? Yes, I know 200 pips as well. It's a lot right if you are training a standard lot right.

That is easily write. A four figure loss amount, but if you look at a price structure right, your stop loss is actually smack in this area of resistance. What this means is that the price could shoot up higher, come into resistance, face, selling pressure and then reverse a lower, and you can stopped out of your trade and the market eventually hit your target, which is a which is at these lows over here. Can you see what's happening, how your 200 pips stop-loss apparently isn't enough for this market? How about this? Maybe you don't want to be shorting this market.

What about buying okay same thing right, so price is at 76 2,200 people stop loss at 74 20, which is about here now as yourself right that level of stop-loss does that make sense doesn't seem so right, because this is an area of support. This is an area of support. Your stop-loss is in this area of support. This means the market could swing down, lower fine, buying pressure at support and then reverse a buyer, and you get stopped out of your trade again.

Okay, I hope you can see where I'm coming from so this is the first mistake that many traders mean right is that you use a fixed stop-loss on your trailer fix 50 people stop loss of 600 pips stop-loss. There is a time in place for such trading approach, especially if you are a short-term trader, a scalper, a day trader, but for traders who are trading off the forward time from the daily time frame, the weekly timeframe. This approach is not the way to go. Okay, so that's the first thing that I want you to pay attention to number two: you place your stop-loss just below support, so let me give you an example: if you look at this on this chart over here, this is the five year Treasury note, futures traders.

They look at this. Oh Rana, Rainer. This market is in an uptrend okay prices is, this is a previous resistance. They could Equis support and right now it's near support is rarely higher.

I'd want to miss the move, so let me buy my back. So you cool off you buy and where you set your stop loss Rainer, I think the textbook sayings then I should set my stop-loss below support. So, where support, let me take a look mmm. Oh there, it is support.

Is here so you put your stop-loss just below support over here and then guess what somehow in the market knows where your stop-loss is, it reverts down lower and then you stop you out of your tree again right so over here you are stopped out again or How about another example? Let's say this time wrong: you are a counter trend. Trader you'd want to trade if the trend anymore. Let's do this on a counter trend basis. Oh Rainer! Look at this Rainer! This is a a doji pattern.

Rainer this means the buyers and the sellers they are in equilibrium. Oh look at this recent strong move. I think the market is gon na reverse Rainer, so you go shop and where do you put your stop-loss? I think the textbook safety - you should put your stop-loss above the swing high. Where is the swing high? Oh, I think this is the swing high and there's nice number.

25. 50. Wow. Look at me confluence factors coming together: twenty five, fifty and the swinging.

I Lance. My stop-loss, that is where I'm gon na put my stop-loss, and it seems that the market knows what you're thinking right. You've rallies up higher spikes through your stop-loss over here and then in reverse lower. What is going on so? Can you see where I'm coming from you don't want to just set your stop loss at or just below, support or above resistance, because it creates right incentive for the smart money right to rate those levels, because those levels is where everybody else set.

Your stop loss because that's what the textbook teach, because that's what the Guru's tell you okay, so be aware of this: don't just set your stop loss, all right below support or just above resistance. So now, what's the solution right, we want solution to our problems. So, let's get into this right so, first and foremost, I want you to understand that price structure. It acts as barriers in the market, natural barriers in the market.

What do I mean by this swing? High swing, low support resistance are these are natural barriers in the market. If you look at this, for example, this illustration: okay, this area of support access, natural barriers in the market, where potential buying pressure could push the price up higher and likewise that resistance. This is a natural barrier in the market, where the price could push where the market could push the price lower right. So this is support resistance, and this is the same for you know whether you're dealing with swing high on swing, lows, etc.

So when you set your stop-loss right, you want to set your stop-loss beyond the natural barriers of the market to protect yourself. You want the natural barrier of the market right to work in your favor to work for you not against you. So, for example, let's say that you know that this is a natural barrier of the market in this area of resistance, that it means right that you want to set your stop-loss right, a buffer, a distance above it somewhere here, because for the market to get out Of this natural barrier of the market, it has to work hard, it has to you, know, go through all the selling pressure, all the sell orders that are coming in right to finally break out, and it makes it difficult right for the market to do so, because It's going against a barrier, it's going, it gives it obstacle and that's working in your favor because you are shopping this market. So whenever you set a stoploss sir, on your trade, you want with natural barriers in the market working for you not against you.

In same thing, for support, let's say the market comes down lower. Okay, you want to set your stop-loss right where the natural barrier is working in your favor and where you stand, you want to set it a distance below this area of support, because for the market to break down below the support by this amount, it has to Go through all the buying pressure, that is, you, know, stack and support. It has to work hard right to stop you out of your tree and that's good for you, because you are long okay. So let me walk you through a few examples on how to use the natural barriers in the market right to set your stores to protect yourself right from stop hunting to protect yourself right from getting stuffed up prematurely.

So again, examples cherry-pick examples. So if you look at this one first, one, let's talk about our Aussie in so let me walk you through how I will go about doing it so just zoom in the chat okay. So you can look at this. You can see that right now the price enhanced coming to this area of resistance.

It got rejected at this area of resistance. Let's say you want to sell this market, as you know, by now right you want to set your stop-loss right where the natural barrier is working in your favor, so where's, the natural barrier is this area of resistance, and now the next question is how much buffer Should you get fresh, do you give like a fixed number of pips like 50 pips 100 pips, that's not the best approach, because different markets. They have different volatility. Like some some markets like the yen.

It can move much more in the day compared to like dollar Canadian. So this is where your new take into account. The volatility of the market right to act as a buffer in a very simple way is to use an indicator called the Average True Range. Let's pull our ATR click on this and I typically go with a twenty period.

Atr and I go with SMA just just my preference is really not gon na make much of a difference. So at this point you can see that the ATR value is about 51 pips, each it's showing over here. So what you want to do is that tells you that on average, each day over the last 20 days, right, Aussie yen has moved about 50 pips a day. So when you set your stop-loss right, what you have to do is to identify the highs.

At this point, the height of this natural barrier of the market - and then you end on 51 pips. So let me just walk you through this simple calculation. So as of right now, the height of this candle is about 76. 28.

76. 28. You add fifty one pips right: it will give you 76 79. So I pull up my this tool.

My stop-loss will be at 76, 79, okay. So what this means right? What this means right to break it down simply is that from this highs to this blue line over here, okay, it's 180 R, and this one ATR is given to you by this indicator over here. That's that tells you right. What is the historical volatility of this market over the last 20 days? This blue line over here is your stop-loss.

So, let's see now the market right, it could possibly know. Reverse' gives you about of the highs, it could possibly know break out of this highs and reverse, but at least now you have this buffer protecting your tree right. You won't get stopped out just because the market exceeds by five tips: 10 pips. There is some buffer protecting you and that's how it's done.

So let me walk you through another example: brain crude oil. So, let's see where I can find a good example. Okay, how about this? If you look at this again, this market has come into this area of resistance, a natural barrier in the market and again you you want to set this. You wan na go shop and you wan na set a proper stop-loss, and I guess you know you don't wan na set your stop-loss just above this highs, because as you've seen repeatedly, you could get stopped out right by a few pips, a few ticks and then The market reverse in your favor, so let's give it some buffer right to this natural barrier of the market.

So first thing first identify the every true range level right. It's currently one point, one: eight, let's make it simple release between one dollar twenty cents. The next thing you wan na do is to find out what is the current high right of this candle, which is about seventy one dollars and sixty cents. So seventy one sixty plus 120.

How much is there? I don't need a calculator for it right, but I'm still using it anyway. Okay, it's 70 to 80. That is your stop loss loss it's about here, 70 to 80, okay. So what this means is that from this house to this blue line over here is 180.

Our debt serves as a buffer right and you should have buffer for you right so in case, if the market spies up higher, you are kind of protected right with that buffer and you won't get stopped out of your trade so easily. So, in this case the market, you can see that it did attempt to spike out a second time over here, but because you give your trait some buffer right, you could stay into this trader and possibly you know even reach or your target profit. You know wherever it might be okay, so this is how you set a stop loss right that actually works in your favor and not against you. So now, at this point, I'll share with you a couple of bonus tips, so some of you might be thinking Reina.

Why do you? Why do you use one ATR and the reason is simple: one ATR is just to simply define right how much buffer I want to give the tree. If you want to use two ATR to be more conservative, that's possible as well. You can go for it or, if you're more aggressive, you find it. You know.

One ATR is too much and code 0.5 ATR, 0.75, fair enough! Go for it right. There is no best parameters to this right. Certain markets. It tends to uh to have one in series is enough and certain market conditions, sometimes one in here is not even enough.

It really depends on the market at a point in time, the behavior, the volatility, for example. Let me share with you a few examples where we're clearly right, 180 are still isn't enough, especially you know news driven market where the market swings up and down due to a big news release. You look at pom, Canadian, okay, in this case the market over here. Clearly, right exceeds right.

This level by more than 180 are before it reverse, or how about this one over here this let this are the UK gilt. This is the area of support. This one clearly exceeds this area of support by more than 180 are before it reverse, so one idiot is is not foolproof. There are times where you still might get stopped up before the market moves in your favor right, but it's better than nothing else.

There is a buffer, protect you and again 180, our it's, not the it's not magic settings right. If you want to be more conservative, you can go to ATR, create er, but the downside with using a higher ATR multiple. Instead, your position size will shrink and when your position size shrinking right, you need the market to move more in your favor right just to achieve a 1/2 what risk/reward ratio. So let me just give you an example of what I just mean.

So let's say you use a 180 are sorry wrong to a 180 are, and your stop-loss is currently let's say: 200 pips. If you increase your 80 are multiple clearly right, your distance of your stop-loss will increase. Let's say you have 380 are below support, your stop-loss right might increase to, let's say four hundred pips and when you are having a four hundred, people stop blocks right and you want to risk one percent of your economy straight. Something has to give right and that's your position size.

You can't be risking as many units right compared to a trader who is risking 200 pips, a stayer stop-loss. So what this means right is that for you to make a one to one risk: reward ratio right. The market has to move four hundred pips in your favor. So that's what I mean right by having a wider stop-loss.

It reduces right your risk to reward on the tree. It's not less attractive, all right, so that's a fine-tune balance right that you have to. You know decide for yourself and finally right one last bonus tip is this rise dead to find favorable risk to reward Freight right? You don't just want to enter your trade at any point in time. Instead, my suggestion is to wait for the false breakout to occur.

This way right, when other traders really have gotten stopped out right, then that's where you can enter the tree and feel safer. That is there's a good chance right. The market could move in your favor. So let me explain so if you look at this over here, righty SMP, okay, the weekly timeframe, let me just remove the ATR first.

You can see that over here. Okay, let's look at a daily, you know that this is an area of support on daily timeframe. Just draw this out: this is an area of support and they are traders right when they look at this right. It might be anxious to get long right.

Look at this huge, green bullish reversal candle. They might be anxious to get long. Let me just zoom in and show you what I mean. It looks bullish and you get long, but my suggestion is that you know don't be 2 inches.

Wait for the Falls break, wait for traders right to get stopped out first before you enter the tree. So you know that, let's say traders who are long right now on this green candle. Where will they put your stop-loss? Well, they put it below support right, that's what the the textbooks usually teach and if you look at this right just below support over here. Well, it makes them right easier to be a prey of stop hunting and that's what happened.

You can see that market the trigger below this stop-loss this area and then reverse up higher. So this is what I mean by no wait for the Falls break out to happen first, so you can see that over here when the market did a sudden reversal. This is where the false breakout happened. When this happens, then you look to enter.

Then you set your stop-loss one in TR below this lows and possibly somewhere here, so wait for the false breakout to happen. First before you enter a tree right. So this is an additional tip right to help. You know find a better quality traits and, let's see if you can find one more example, ran crude oil.

That's is there any here again same thing for this right. If you look at this one over here at this point, the market did appear to show signs of weakness and again the natural barrier. The area of resistance is over here and when they go short right, they will likely set your stop-loss above this highs again right. Let the false breakout happen.

First, don't be too anxious to chase the market to enter the tree. Let the false breakout happen. First, and in this case it happened on this candle here over here. So you can see that the market over here broke out of the sighs this one broke out of this highs and then reverse and closed near the lows.

So this is what we call a false breakout and when this happens then you can be. You know now. Looking to enter the tree and have your stop-loss 180 are above the size somewhere here. Does it make sense so so this is another painting right for you right to help.

You find a better traits right to wait for the false breakup first. So, let's do a quick recap: number one! Don't set your stop loss at random price levels on the chart because the market doesn't care about it. What I'm to do is to pay attention to the price structure. Natural barriers of the market.

Number two don't set your stop-loss just below the pot or above because it's easy right to get stopped huntin. So the way to go buddy is to set your stop loss right beyond price structure like 180 are above resistance or 180 are below support. Then I talked about how you can actually treat the ATR multiple to your preference right. If one insurer is too little for you, you can go to 80.

Our Creator, it's fine, but bear in mind right the consequence of it right where your risk to reward ratio will be affected and, finally right, you can wait for the Falls break up before entry right. This way you get lesser treats, but when you get such training satellite, it increases the odds right now. The market is about to move in your favor make sense. Okay, so with that said, I hope you got value out of this training if you've enjoyed it hit that thumbs up button subscribe to the channel.

The link is all below and if you want to learn more learn more about such trading techniques, price action, analysis, price action trading, then just go down to my website over here trade it with Rainer comm and download this guide over here. This green orange guide called the ultimate guide to price action trading, I'll, send it to your inbox for free, just click. This orange button right enter your email and I'll, send it to your inbox for free, so with that's it. I wish you good luck and good trading and I will talk to you soon.

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