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  • So we go in at 48 we set our stop loss.

  • I realized for you you're not buying but if this was a bi level for you, your stop loss would probably be pending on how much portfolio.

  • Want to lose a couple grand below, for example profit taking.

  • How do you go into looking at it?

  • Do you average out the profit taking or and again it probably varies, but what's a basic way of thinking about it?

  • Okay.

  • I I personally believe in averaging and averaging out of positions, right?

  • Because I think that every lot less stress when you have less on the table, but even if it's the full amount that you plan to and you're totally comfortable with that, every time you tell a little bit, take a little bit of profit, you reduce some of the stress on that position.

  • Um And like I said, We all talk about lines on charts, maybe 42 grand, but that's kind of 42, Right?

  • So it's sort of a zone.

  • So what I'll do if I'm looking to enter is I'm bidding that entire area, You know, 5 to 10 different bids spread out rarely do I feel the whole position because usually it doesn't get all the way down to the lowest ones.

  • But if it does awesome, right?

  • Um So I'll do the same thing on the way out.

  • It can be using Fibonacci retrain, it doesn't matter what your strategy is.

  • Fibonacci retracement drawn, horizontal resistance levels that you like.

  • That's what I usually do.

  • It can be just mathematical every 10% I'm taking 15% off the table, you know, every 10% rise, whatever it is, but every time you take a little profit on the way up, you kind of reduce the stress of your next decision.

  • And I think that a lot of the mistakes that we talked about already earlier is because people view every position is binary, I got in all of it at this price, this is my target.

  • I'm selling it all well if you sell it all, that's when you foma backed in because it goes higher.

  • But if you still have 50% of the table or 30% of the position, you have the upside if there is more of a runner in that trade for me because crypto has such outsized gains.

  • You know, I used to trade stocks and if I made 1020% of the year, I'd be super psyched now in crypto, people feel like if they didn't make 10% 20 minutes after they entered that it's a it's a loss.

  • Um but so you have these 10 20 X 100 X moves depending on how long you've been here and what you grab, I love to take the last 10 20% of a position and moving into my investment portfolio and never look at it again, just in case it's an utter Moonshot and a couple of years later I come back and that has turned into a, you know, a significant player in my portfolio.

  • So sometimes I never exit the entire position if I have some of the houses monies left that I can ride.

  • That's super helpful.

  • I guess last question about kind of stop losses and profit taking, Do you believe that once the trade becomes profitable or reasonably profitable, you should always make sure that that's a profitable trade with marketing.

  • So that means you'll adjust your stop loss up with it.

  • Uh This is the only time I'll change my stop losses into profit.

  • Never down well, you know, unless you're shorting of course, but uh, is to move your stop loss into profit at a certain level.

  • And that can also, somewhat we managed with profit taking right?

  • You take a little bit of profit now, even as you move, even if you kept your stop loss, your, you've reduced your risk and you're going to take a smaller loss if it drops but generally depends on the chart.

  • If you've broken a key resistance level, flipped it to support, will now move my stop loss up as if I was taking the trade at that level as opposed to the level below.

  • So I give myself a few percent below that new support.

  • Uh, and sometimes I'll have measured stop losses as well.

  • I'll keep some of the stop loss where it was, I'll move up some of the stop loss, I'll take a little profit.

  • It's a lot of management and you should have that generally planned in advance.

  • Um, but yeah, there's a, there's a lot of ways to skin this cat, but there's nothing worse than turning a major potential win into, uh, full loss.

  • And that's what happens to a lot of people if you don't take profit and you see it, rock it back down and fully stop out.

  • So I don't necessarily think you should move it right to your entry because you know, you want to get some profits, maybe a little bit above your entry lock in some profits and then you're no stress.

  • All right, That's super helpful.

  • I want to ask you about news, the media, how you consume news or make sure you don't consume news because that's important these days too.

  • But before we do, you mentioned charts a lot and it sounds like you look at them a lot.

  • Well, you look at them somewhat and maybe you can talk about how people should engage with charts, especially people new to the market who probably never seen a chart before and some of them get really complicated.

  • First of all, does a trader need to look at charts at all.

  • Second of all, can you go down the chart rabbit hole and never come back out.

  • Um, And third of all, what's the middle ground and does that vary by person?

  • I think the middle ground is probably the most sensible and that it varies by person sort of as you touched on.

  • So I have friends who are equity researchers and had hedge funds, uh, you know, they're not necessarily executing trades are looking for levels, but who basically trade for a living and have never looked at a chart in their lives, right.

  • They're analyzing the fundamentals of the company, they're listening to the quarterly earnings call, they're deciding whether this is a fundamentally strong position and buying accordingly or selling if they believe that it's not, never look at a chart.

  • So there are plenty of people who are incredible fundamental analysts and trade that way.

  • You know, I think most people who are traders, especially if you're trading on any lower timeframe below the weekly, monthly um, do look at a chart and then once you dive into looking at charts, there are a million ways to do it.

  • I can tell you that in my early years, I like to joke that if you look at one of my charts, it looked like you were on acid at a pink Floyd laser light show or something.

  • There were so many lines and colors on this chart and indicators.

  • And with time, the more you do it, the more you realize, as I said, you're just looking at human emotion and trying to make very simple decisions and your charts become very, very clean, right?

  • You have a couple of lines, you make your decisions based on that.

  • I think most, it's really important to note that most people who have gotten wealthier markets since they've existed, not only have they never looked at a chart, they probably don't know that charge exists, right, The wealthiest investors in the world have found good assets, they've used money that they don't need to take out to buy them and have waited most of their lifetime and gotten rich right.

  • And it's such an important distinction because you get into trading and you think you need to know the exits and the entries and you've got to find that and learn how to chart.

  • And none of that really matters if you're patient and you picked the right horse.

So we go in at 48 we set our stop loss.

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Scott Melker Explains How To Make Gains & Reduce Stress When Trading ?

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    林宜悉 posted on 2021/09/07
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