Managing The Trade

What you’ll learn?

1. Managing a trade is where many traders make big mistakes by not having a plan. It’s important to have a plan for invalidation, raising stops, taking profits, and adapting to the market.
2. Four main types of stop losses are discussed:
   • EMA-based stop loss (cutting the trade when a key moving average is lost)
   • Candlestick-based stop loss (using candlestick setups to trail stops higher)
   • Percent-based fixed stop loss (cutting the trade if it pulls back a fixed percentage – not recommended)
   • Market structure-based trailing stop (cutting when the pattern of higher lows and higher highs breaks down)
3. The take profit strategy has three steps:
   • Take first profits after the initial surge of 2-3 candles in your favor
   • Take second profits after the secondary surge of 5-8 candles in your favor
   • Trail the remaining position with your preferred stop loss method
4. Detailed examples are provided of how to apply the take profit strategy and various stop loss methods to real charts and trades.
5. Key mindsets are discussed, such as being okay with selling bottoms sometimes in order to stick to your rules, avoiding hindsight bias, and balancing greed with risk management.

The main takeaway is having a clear trade management plan that defines your invalidation points and provides rules for taking profits and trailing stops higher as the trade progresses in your favor. This allows you to control risk while still capturing gains if the trend continues.

Content Chapters

00:00 – Introduction and overview of the video
03:33 – The importance of having a plan when managing a trade
04:39 – Four main types of stop losses
05:35 – EMA-based stop loss method
07:20 – Candlestick-based stop loss method
12:39 – Percent-based fixed stop loss method (least favorite)
13:27 – Market structure-based trailing stop (most preferred)
24:39 – Comparing and combining different stop loss methods
29:32 – Mindset traps and the importance of selling the dip sometimes
37:01 – Three-step take profit strategy
38:19 – Step 1: Take first profits after the initial surge (2-3 candles in your favor)
41:46 – Step 2: Take second profits after the secondary surge (5-8 candles in your favor)
43:51 – Step 3: Trail the remaining position with your preferred stop loss method
45:46 – Example 1: Applying the take profit strategy to a real chart (PEPE)
49:32 – Example 2: Applying the take profit strategy to a different scenario
54:15 – Combining multiple take profit and stop loss strategies
59:23 – The importance of adapting and experimenting with the rules
1:01:52 – Upcoming videos on fractal trading model and position sizing/risk management
1:05:26 – Conclusion and encouragement to reach out with questions