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  • And I want to show you how to take the profits.

  • All right.

  • And this is the most important part.

  • And again, you've got to lock your profits and you'll probably see this graph here and you can see, you know, a lot of people buy in, you've got a target of what when you want to get out and you've got the peak price and then you've got a place where it's too late.

  • Right?

  • You can see that on this graph here.

  • Most of you are trading with the to late scenario, Okay.

  • We know so many people out there that held onto crypto and watched it go up 80% and go back down all the way to those levels.

  • And this is the problem.

  • So in this part, I want to show you how to lock in your profits with something I call a reward to risk ratio.

  • Let me repeat that.

  • It's called a reward to risk ratio.

  • This is a really important concept that you've got to learn right now.

  • And let me just define what it is.

  • A reward to risk ratio states this simply, how much do you need to make on every trade versus how much can you afford to lose on every trade.

  • This is important.

  • Now, based on the previous section, We have agreed for the, for the time being that 1% is the maximum we're gonna lose on any single trade.

  • Okay, that's on one trade, you might have four or five trades on right now, but the most is 1%.

  • So what's the, what's what are we looking to gain on every trait.

  • Now that has to be based on your ward to risk ratio based on that ratio, you'll know how much you're going to gain now.

  • That ratio can be a range of things.

  • But what we like to use inside the defi academy as a rule of thumb is a 2 to 1 reward risk ratio.

  • That means when you go into a trade we're always looking to make twice as much as we are ready to lose based on that information alone.

  • When you go in to put your trade on, you put a stop loss 1% below and you look to take gains when it gains that 2%.

  • That rule alone will probably make all of you better traders by 10 X right now just by doing that.

  • I mean honestly putting a stop loss in will make you all 100 times better trader putting a profit taking scenario double the size of your stop loss will probably make you 1000 times better trader right now.

  • Okay so that's the concept of the reward to risk ratio.

  • Let me go deeper on that.

  • You might say brian but why not make it 10 to 1.

  • Come on.

  • I mean why limit ourselves, why not go big?

  • Why not 10 X.

  • Like Grant Cardone says right and I love Grant and uh I love that concept but the truth is it's not very realistic in the crypto markets if you go in with that same Bitcoin trade with a stop loss 1% below With uh, not taking profits until you see a 10% gain.

  • You could be waiting around for a long time and you'll probably get stopped off all the time before you take your gains.

  • So there's a point where we need to be realistic and lock in profits.

  • That's one of the biggest mistakes I see new traders making.

  • First of all, they don't stop themselves out and they don't lock in profits, which means over a period of time they never actually make any money.

  • They just talk about it and then they buy a hoddle t shirts and then we never hear from them again.

  • That's not what we're looking to do inside the academy.

  • And again, I'm all for having a core position that you hold on your cold wallet for the long term.

  • That's great.

  • But I'm talking about trading when we trade, we do it with discipline and we do it with stop losses and we do it with gains.

  • So let's talk more a little bit more about this reward to risk ratio because it means that every trade we put on, we're gonna always try to double our, our, our rewards versus are lost.

  • Now this puts into something that's very interesting as a scenario.

  • First of all, it gives us an idea of where we want to start taking profits.

  • So that means my students like Brendan, I mentioned earlier with, I think it was an 83% gain, He said Brian, I already took my profits on Solana, I took them actually even before it crossed 100.

  • Now you might say, oh that was stupid.

  • You should head onto 1 15, but he already locked in his profits, which is what we're trying to do here.

  • So again, by averaging averaging out, we know that over time we only have to be right one third of the time in order just to break even, which means you don't have to pick every single trade right?

  • Even one out of three winners, which means you're already going to be above board.

  • And if that can go to one and two or even one and one, you're going to start printing massive gains.

  • Which is why my students inside the defi academy are doing so well this month because they're using the trading discipline.

  • And again, what's most important here about taking gains is going back to our basic trading rules and I'm gonna throw up Our eight step trading checklist and you can take a screenshot of this if you want or we will have this as a downloadable asset soon.

  • I'd love to build that tv forward slash defy and look at rule number four and let me read it out to you again, once you have it a profit in a trade, never let it become a lost.

  • Let me repeat that once you have profit in a trade, never let it become a loss.

  • So once you put that trade on.

  • First of all, we trade like the terminator, we've already got our stop loss and we've already got and also a market order where we're taking our gains.

  • So that means from there on in.

  • We already know that over time, uh, we've got a two x reward to risk ratio, which means that we only need to be right.

  • One out of three trades already puts us in a great position and it means that once our trade goes into profit, we can also start moving those areas around.

  • So if our trade goes 1% into profits, we can actually bring the stop loss up to where we already know we're not going to lose money on the trade.

  • And that's why having that mentality of taking profits of making sure that once a trade goes into profit, we don't let it go below to a loss is crucial to the success that we're seeing inside the defi academy.

  • And again, it's all about having the discipline and taking those gains and remembering that reward to risk ratio is crucial.

  • You're not waiting for that big, you know, doubling in price to make your money.

  • And we're also making sure that we limit our downside.

  • And so again, as some final trading rules, you want to choose your coin, you want to get your position, You want to put that stop loss in, say 1% below the market.

  • You want to put the prophet tricky taking order in 2% of all of the market and then put your phone down, stop trade checking on the prices of Bitcoin every hour, every every two hours.

  • See how that trade plays out and start to understand this is how a disciplined trader approaches the market.

  • And it all comes down to that phrase that I've quoted before and I'm going to quote again and it comes from Sun Sue the chinese general and he says this and I'll put it on screen again.

  • Every battle is won before it's ever fought, Every battle is won before it's ever fought.

  • And that is the idea of this discipline.

  • We go into a trade and we've already won because if we stick to our disciplines and limit our losses and maximize our gains, we know over time we are going to win in this market and that's how we're creating the incredible results that are happening inside our defi academy right now, we couldn't be more proud of the trading discipline of our students.

  • And this is something we break down over the course of four weeks and four modules module for is why I go really heavy on trading discipline.

  • Uh we've got rules, we've got strategies and we've got a whole group of people that are watching you to make sure that you follow them and that's why I think they've been so successful.

  • But again I have to give the success to them.

  • They're the ones that are making it happening and they're keeping the gains as well.

  • And so I want to cut to just a sneak peek of a video from the module inside the defi academy where I talk about this concept of reward to risk ratio.

  • You can check it out right now.

  • The truth is this if we can execute consistently and successfully on this simple 2 to 1 reward to risk ratio over hundreds of trades, your portfolio gains will become exponential.

  • Let's look at an example from our original purchase of one Bitcoin at $50,000.

  • We know that our maximum loss is now $2000 or 1% of our portfolio Based on a 2-1 reward to risk ratio.

  • This means you would take profit at $54,000 with a sell order placed to lock in your $4,000 gain.

  • Both stop loss and profit taking orders should be placed at the same time as the original trade.

  • In order to prevent emotions from changing a principled trading decision.

  • Not every trade will go your way.

  • And with these limits, not even half of them will be wins.

  • But if you limit your losses and maximize your gains over time, you will achieve long term success.

And I want to show you how to take the profits.

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When & How To Lock in Profits: Become a 1000x Better Trader, now! ?

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    林宜悉 posted on 2021/09/16
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