Where To Put Your Stop Loss (For The BEST Results)

getting into trades is important but

when you get in you need to make sure

that you have your stop- loss utilized

in the best possible way to make sure

you can also get out profitably now this

may be reducing the losses you take or

trading your stop loss into profit to

turn trades into a win-win scenario

whatever it may be in terms of stop-loss

utilization we are going to cover it in

today's video so let's get to the

learning a stop-loss is an order that we

place on a trade to safeguard us from

taking big losses so every time we get

into a position we obviously hope that

the trade is going to move in our favor

but sometimes it's not going to in fact

about half of the time you get into a

trade it's going to lose now if we know

that half the trades we take are going

to lose we want to make sure we can get

out for minimized losses so we place a

stop- loss on every trade we put it at a

predetermined level with a predetermined

number of risk in this instance it would

be $1,000 and then if the market is to

go against our position it stops us from

taking a three four five or even $6,000

loss we just get out with the $1,000

predetermined loss and we can get in

later so there are three things we can

do with stop losses number one avoid

large losses number two avoid losses

altogether and number three maximize

profits on trades by turning trades into

a win-win scenario the first is your

general stop loss like this down here

this is obviously what we've just

discussed it's a safeguard for your

position if the trade moves bad you're

going to get out with a predetermined

loss that is controlled and it's not

going to get out of hand and destroy

your whole account now now if you get

into a big draw down by not using stop-

losses it's very hard to recover so it's

worth just taking the minimized loss now

the second way that we can use stop

losses because stop losses are flexible

they are just an order that we send to

the market meaning we can change the

price of the stop loss at any time so

the second way we're going to use them

is to go break even now a break even is

where we limit our loss completely by

moving our stop loss to the price that

we entered the trade up so when the

trade is moving in your favor let's say

if the market was moving up to this

level we could now move our stop loss to

the break even level or the price that

we entered the trade at and then if the

market is to flip on us and go back down

to the stop we're getting out for free

we are not having to take a loss on this

position and we're not letting this win

turn into a loss okay now we have

commissions to account for on many

accounts so you could move your stop

loss one or two Pips above your entry

price and this will actually pay for the

commissions as well by paying you a

small amount of profit if the market

reverses to break even the third way to

benefit from stop loss

is by stop-loss trailing so every time

the market moves up and forms a new

little high and low in the market we can

actually grab our stop loss and change

those numbers to fit under previous

structure this way if the market decides

to flip on us we're going to get out for

a profit in this instance if our stop

loss was here under this small

indecision candle we'd be getting out

for around 1% in profit even though the

stop- loss is hit when the market makes

new highs and lows we can just follow

those lows with our stop then we'd be

pulling in about 3% profit and obviously

in this trade scenario the trade worked

out perfectly but that's not always

going to be the case sometimes trades

will work in your favor and then just

before they reach the target they'll

flip on you and if you don't utilize the

methods that I'm going to teach you

today you can turn a lot of big wins

into some serious losses there are two

core mistakes that Traders make when it

comes to positioning stop losses number

one is putting your stop loss too far

away from your entry price which means

your risk reward is too small and your

trades are not going to return much

profit at all and number two is putting

your stop loss Too Close aiming for

really high risk reward ratios now if

you put your stop too close and it's

unreasonably close you are likely to get

stopped out of a lot of Trades even

though you're right on a position even

just little Wicks and Tiny movements

against your trade can stop you out

turning potential Big Winners into

immediate losers there are two core

mistakes that Traders make when

positioning their stops number one is

having your stop loss Too Close number

two is having your stop- loss too far

away so in this instance if we were

taking a trade from this demand Zone we

have a nice buy awesome but if your

stop- loss is going to be really far

away say if you're using a fixed stop

loss of 50 Pips or if you are putting

your stop loss under considerably

further away lows you are limiting the

amount of profit you can make on a trade

now we can see this is a very nice large

movement it's around 155 Pips we don't

really want to only pull 2.8 or 2.5% out

of a trade like this cuz we can make

cons considerably more so what we want

to do is try and find the balance now

what other Traders will do is have stop

losses way too close they might buy from

the top of a Zone and have the stop loss

still somewhere inside of the zone or

they might go down to look at like a 5

minute Zone inside of the larger area

and put their stop underneath that which

is then prone to being Wicked out if the

market decides to pull deeper into an

entry zone or point of Interest so we

want to strike the perfect balance and

it's very simple to do this all we want

to do is consider where the swing low or

swing high is when we're getting into a

trade so if we have this demand Zone

here that we're looking to buy from our

stop loss is going to be just underneath

the swing low so we would have our stop

loss just there now the reason that this

is going to work so well is because we

are generally in our trades trying to

follow the market structure this is a

market with bullish structure we're

making highs and lows continually which

tells us that the market is trending up

now for a market to change direction it

has to change from the higher high

higher low format into a format of lower

lows and lower highs so if this swing

low broke that would generally change

the direction of the trend completely if

the trend Direction changes we no longer

want to be in this trade because we are

looking to buy right so we could cross

this trade off and move on to the next

potentially even changing the direction

of the position so this is why we don't

need to have stop losses really far away

we want to try and work out the level

where the trade is invalidated our goal

is to only be stopped out when our trade

is wrong but also make sure that we're

stopped out when our trade is wrong if

we have our stop loss somewhere refined

using lower time frame price action and

it's still sitting in the zone well it's

very easy to be stopped out of this

position but still be right if the

market came down to the very low of the

zone and you got stopped out cu your

stop- loss was somewhere inside of this

higher time frame Zone then your trade

was correct but you still lost money

that is a terrible position to be in it

hurts your feelings and it hurts your

trading balance as well but with a

really big stop there's no point having

to stop this big because we generally

know now if this low this swing low here

breaks the trade is invalid so there's

no reason for us to hold on Hope in a

market that is now shifting into a

downtrend so we would generally just

prefer to get out of the trade as soon

as the trade's invalidated when that

swing low is taken we hop out we take

our minimized loss but our stop loss is

small enough to make sure that we're

maximizing The Profit potential of each

position so rather than having to trade

with a 2 or 2.5% reward to risk profile

we can trade with a 4.36 reward to risk

profile meaning for every ,000 risk here

we're aiming to make

$436 in profit now it's attractive to

have small stops because the profit

potential you make on trades can be very

big take a look at this for example

13.88 is the reward to risk profile on

this position which means if you risk

one $1,000 here this profitable movement

will pay you back $1

13,880 this is one of the biggest

problems that I see beginners making

over refining and trying to get super

tight stops if you aim for these super

tight stop losses like this position yes

you can bring brilliant profits when a

trade wins but your win rates are going

to be so low that it's going to stress

you out too much you'll probably break

the system and if you don't break the

system and you do follow the rules

through the S out of 10 losing trades

well you're not going to actually be too

much better off than a Trader who just

trades a bit more conservatively wins

more positions but makes a smaller

return on the WIS it's a lot easier to

win positions like this one than it is

to win positions with very tight stops

and yes you are making less per trade

but you are winning a lot more trades

when you trade in this way when you over

refine you're going to get stopped out

back to back to back and when one trade

finally wins you're probably going to be

too scared to hold it out anyway

so ultimately when we are choosing

stop-loss positioning we want to choose

the place that will invalidate the

position that is where our stop loss

should go if we are wrong we want to get

out as soon as possible but if we're not

wrong we certainly don't want to get out

so the first trade entering from demand

in an uptrend our stop- loss would go

beneath the higher low which would be

this level here if our stop loss is

under that higher low then if the market

continues trending up we have no risk R

if the market turns on us then we just

get out as fast as physically possible

without turning the loss into something

bigger than it needs to be now as I said

sometimes it can be appealing to get the

smallest stop- loss possible so if you

were entering a trade here you might

want to go with a stop- loss like this

but if we still have open price ranges

and there are still areas below that the

market could trade into such as a

smaller demand down here then sometimes

it's better to just go with the wider

stop now if you're in an uptrend you've

got a lot of potential to take this

trade higher but taking your position

like this once again utilizing that

invalidation point for your stop-loss

positioning so putting it under the

previous higher low is going to make

sure that even if the market trades down

into some of the extreme lower areas of

this trending move you're going to still

be in the trade if you've got that super

refined stop yes your risk reward is

looking good but if the trade flips on

you like this and the low that you're

relying on gets liquidated then you can

be stopped even when you're still right

on the trade and a lot of the times

using more conservative stop losses is

still going to provide you with a good

risk reward of four five or 6% so

there's no reason to try and push it to

10 and kill your win rates in the

process that is the safest way to

position your stops okay now let's talk

about going break even so this is where

you move your stop loss to your entry

price or just below or just above

depending if you're selling or buying to

make sure you limit all of the risk on

your position turn your trade into a

win-win scenario where you either win or

get out gotot free should you go break

even at this point that we're trading at

right now where we have just made a

small push away from the entry well on

the majority of positions I would say no

because at the moment we haven't

actually made a new structural low none

of this range here has been broken we

still have some structural lows intact

which basically means this Market can

still range this push down doesn't

actually mean a lot Until It Breaks

previous lows it's possible for the

market to do this mess around a bit

before finally making its movement down

so if you go break even this fast you

will promise you save yourself from a

few losses but you will also and I

promise you this too miss out on a

massive amount of profit by getting

stopped out at break even before your

trade moves into your favor I'm sure you

might have encountered this yourself if

you've already attempted the break even

strategy so how should we be going break

even then well the simple format is to

wait for the market to form new lows so

if we take a look at this Market where

we've actually pushed down and formed a

new low pretty much from this point

onwards here we could go break even okay

we've seen the market form a new low now

it is only a wick but we are just

trading here we're not using this for

entry confirmations because we've seen

the market form this new low we can go

break even safely because if we

reconsider the structure of the market

now we have this High we have the low we

have the lower high and we have the

lower low so at this point if the market

pushes above pretty much this Supply

Zone that I'm plotting out here we

wouldn't really want to be in this trade

right if the market somehow built the

strength to push back Above This high

it's likely that it's going to push the

other way with some strong momentum

because we're obviously seeing

considerable strength in that market so

you can start to go break even when new

lows have been broken which in this case

is going to be around this point here

that is where you would break even your

trade and make sure you don't lose and

it's recommended to not do it any

earlier than that because if you start

break evening too fast you're going to

run into that problem I've already

explained so now let's talk about

trailing how would we Trail our stops on

this position we we want to follow the

same structure format we have the high

the lower low the lower high the lower

low the lower high and now the lower low

so at this point the trade is already

moving pretty close to the targets and

we have clear structural format of lower

lows and lower highs so because we're

moving very close to targets we at least

want to make some profits on this trade

so we could put our stop loss above the

previous High which is going to be this

level just here this means at worst case

we are going to pull around 2% profits

out of the market which is obviously not

as good as the full 7% Target but it's a

lot better than 0% or minus one then

subsequently every time the market goes

and makes a new low so for example now

that we've came down to this level we

could Trail our stop in to the previous

low just above that Wick there now

obviously in this instance we kind of

Consolidated and then hit the target so

you wouldn't need to Trail but if we

were extending this profit Target out

for example it would be wise to follow

price action with our trailing stop-

loss now something I also like to do is

more aggressive stop-loss trading so

let's say we are going for a larger

Target but we're getting pretty close to

the Target now this is only for trades

where we're getting close to take

profits if we're already 5 6% into

profit I'm happy to take that anything

above 3% I'd be happy to take so I go

for a more aggressive stop trailing

method and that is by following each

candle once a new candle forms so we

have here a bearish candle as we can see

that is Then followed with another

bearish candle when the next bearish

candle forms we can place our stop- loss

above the previous bearish candle in

this instance would be this candle here

then when we get another bearish candle

we could move our stop to this candle

here the previous bearish candle this

way we are following very tightly along

with price and many times the market

will just run down and you'll just Trail

your stop behind every single low until

you get all the way to or very close to

your full Target but sometimes the

market will flip on you like this and

when it does it pays to just get out of

the position and avoid turning what is

now an already very profitable position

into a loss now this is going to be a 5%

profit trade at 1% risk if you risk 2%

that's 10% done in a single position and

yes you were reaching for more but we

are not trading in a perfect world here

we are trading in in a unpredictable

Market where uncertainty is literally

the only thing that's guaranteed so

using these trailing stops to safeguard

positions is a really good way to make

sure we take profit from a trade even if

it doesn't reach our full Target so make

sure when you get into your trades

you're always prepared on how you plan

to get out if things go bad and make use

of that stop-loss trailing to minimize

the losses you take and turn your trade

into a win-win scenario I talked more

about this in my free course there's a

link at the top of the description for

that that's going to help you to build

your first successful trading strategy

and if you don't want to do that then

just check out this video next that's

going to help you to progress on a

similar topic as well so thanks for

watching I'll see you in the next video