al-brooks-course
51C - Losing Because of Mistakes
Raw transcript and slide notes for 51C - Losing Because of Mistakes.
Overview
- Slides: 16
- Transcript segments: 338
- Status: 自动按 slide 时间线归档；核心概念和长期笔记可以在每个 slide 的
Study Notes下继续整理。
Source Media
Transcript 001
Time: 00:02
Bilingual Transcript
00:02 - 00:03
EN: This is Al Brooks.
00:03 - 00:05
EN: Thank you for watching the Brooks Trading Course.
00:05 - 00:09
EN: This is the third of four videos on losing because of mistakes.
Slide 001
Time: 00:11
Bilingual Transcript
00:13 - 00:16
EN: I’m going to give some rules on how to avoid big losses,
00:16 - 00:17
EN: which is very important.
Slide 002
Time: 00:18
Bilingual Transcript
00:21 - 00:26
EN: One of the problems with a big loss is that it wipes out many good trades,
00:26 - 00:29
EN: and it takes a lot of good trades to get back to breakeven.
00:29 - 00:32
EN: It’s very important to avoid big losses.
00:37 - 00:42
EN: On any reasonable trade, you have a 40% to 60% chance of making money
00:42 - 00:46
EN: and a 40% to 60% chance of losing a least a little bit of money.
00:47 - 00:52
EN: Great scalpers, they are rare, but they can win 90% of the time.
00:55 - 00:58
EN: Let’s say for example that you see a bear trend,
00:58 - 01:02
EN: and now you see a Double Top bear flag, a Lower High,
01:02 - 01:04
EN: and you sell, which is reasonable to do.
01:07 - 01:09
EN: You put your stop just above the top of the bear flag.
01:09 - 01:13
EN: You sell on a stop below the low of this bear bar and you get filled here.
01:20 - 01:24
EN: It’s reasonable to get out above this bull bar because you have the possibility
01:24 - 01:28
EN: that this will be a profitable Higher Low Major Trend Reversal.
01:28 - 01:31
EN: We have a bear trend, a strong enough minor reversal to break
01:31 - 01:33
EN: above the trend line, and now we have a pullback
01:33 - 01:38
EN: that has two or three legs down – one, pullback, two, pullback, three.
01:38 - 01:41
EN: Some computers will see it as a Wedge Higher Low.
01:41 - 01:44
EN: Others will see it as a High 2 – High 1 and then High 2,
01:44 - 01:46
EN: and it’s a good buy signal bar.
01:47 - 01:50
EN: If you’re short, I think you have to get out above this bull bar.
01:50 - 01:54
EN: If you’re flat, you can buy this, looking for a swing up.
01:54 - 01:59
EN: Any time there’s a reasonable opposite signal, it’s usually wise to get out.
01:59 - 02:03
EN: If you sold this Double Top bear flag, bear trend,
02:04 - 02:07
EN: and then you see a reasonable buy setup, it’s better to get out.
02:08 - 02:12
EN: If there’s then another sell setup, you can take that other sell setup.
02:12 - 02:17
EN: But it’s better to be out of your shorts when the bulls have a reasonable buy.
02:25 - 02:29
EN: Any time that you’re clearly wrong, you always should exit,
02:29 - 02:32
EN: and don’t sit there hoping that the market will go your way
02:32 - 02:36
EN: or go your way at least a little bit, enough to reduce your loss.
02:37 - 02:41
EN: If you did not get out on the stop, now we have a reversal up
02:41 - 02:43
EN: with a decent bull bar and we have a good follow-through bar
02:43 - 02:46
EN: after this bull breakout above this bull flag.
02:47 - 02:50
EN: We also have 4 consecutive bull bars and we have two closes
02:50 - 02:52
EN: above the top of your Double Top.
02:52 - 02:54
EN: You’re clearly wrong.
02:54 - 02:56
EN: You have to get out if you did not get out already.
Slide 003
Time: 03:00
Bilingual Transcript
03:04 - 03:08
EN: The single most important thing that you can do to protect against a big loss
03:08 - 03:12
EN: is having a protective stop in the market, not in your head.
03:15 - 03:17
EN: The stop protects you from yourself.
03:17 - 03:21
EN: Some traders will see where the stop goes and not put it there
03:21 - 03:25
EN: just in case it goes a little bit above the stop and then reverses back down.
03:25 - 03:27
EN: That is a mistake.
03:27 - 03:30
EN: You have to have a price on the chart that tells you
03:30 - 03:32
EN: that you’re wrong, and you have to get out and take the loss.
03:36 - 03:38
EN: The single biggest problem with having a stop in your head
03:38 - 03:42
EN: and not in the market is that it tends to stay in your head and it never gets
03:42 - 03:46
EN: into the market, and the result is you watch the market go against you
03:46 - 03:49
EN: further and further and further, and you never exit.
03:49 - 03:52
EN: You end up getting a loss that’s far greater than you ever should take.
03:57 - 04:01
EN: One big loss can wipe out the last 20 good things that you did,
04:01 - 04:04
EN: and it might take 20 good things over the next week
04:04 - 04:07
EN: or two to erase this big loss.
04:07 - 04:10
EN: Therefore, you cannot take a big loss like that.
Slide 004
Time: 04:15
Bilingual Transcript
04:17 - 04:20
EN: We have a bull trend and we have a High 1 bull flag.
04:20 - 04:22
EN: It’s reasonable to buy above this bar.
04:22 - 04:25
EN: Not ideal; a little bit of a parabolic Buy Climax
04:25 - 04:28
EN: and then a bear bar and a bear buy signal bar.
04:28 - 04:32
EN: However, it’s reasonable to take that as a pullback in a bull trend.
04:37 - 04:39
EN: However, let’s say you held long
04:39 - 04:43
EN: and then you see this bear breakout and a follow-through bar.
04:43 - 04:45
EN: What are you thinking about at this point?
04:46 - 04:50
EN: An expert, if he made the mistake of holding long through all of this,
04:50 - 04:54
EN: he would get out at the market or above the high of this bear bar.
04:54 - 04:56
EN: What would a beginner do?
04:56 - 04:59
EN: Well, if the beginner did not have a stop in the market
04:59 - 05:04
EN: or a stop down here or a stop anywhere and he sees this, he might think that,
05:04 - 05:08
EN: “On television they talk about averaging in; maybe I’ll average in.”
05:08 - 05:12
EN: Averaging in – in other words, buying more in a losing position
05:12 - 05:17
EN: - is a great strategy if your premise is still valid, if it’s still a bull trend.
05:17 - 05:21
EN: However, once it’s clearly a bear trend or clearly no longer a bull trend,
05:21 - 05:24
EN: averaging in does not make any sense.
05:29 - 05:32
EN: The beginner, he might buy more here, arguing it’s a High 2,
05:32 - 05:35
EN: maybe a Trading Range, and he’s ignoring the reality.
05:35 - 05:38
EN: We’ve had 8 or 9 bars down without a bull body.
05:38 - 05:41
EN: We’ve had a strong bear breakout, and we have a follow-through bar
05:41 - 05:44
EN: after the breakout bar and it has a bear body.
05:44 - 05:46
EN: The odds are we’re going lower.
05:49 - 05:53
EN: There are a lot of personality traits that all of us have
05:53 - 05:56
EN: that are very effective in dealing with problems in the world,
05:56 - 06:00
EN: and one of the things is we’re genetically bred to be hopeful.
06:04 - 06:09
EN: What I mean by that is that people long ago who were in trouble but gave up;
06:09 - 06:13
EN: died, and so did their genes, and the result is people
06:13 - 06:16
EN: who give up tend to disappear from the gene pool.
06:16 - 06:20
EN: Their genes disappear, and people who are hopeful and hang in there,
06:20 - 06:25
EN: their genes survive and they make up a bigger percentage of the gene pool.
06:30 - 06:34
EN: You had a much better chance of surviving and passing your genes
06:34 - 06:37
EN: on to future generations if you were hopeful and you never gave up.
Slide 005
Time: 06:40
Bilingual Transcript
06:44 - 06:48
EN: If you exit with a loss, you’re a quitter, and nobody likes a quitter.
06:51 - 06:56
EN: Beginners refuse to give up, and therefore they’ll often add to the trade
06:56 - 07:01
EN: even though at some point it’s clear the trade is no longer valid.
07:01 - 07:04
EN: Once you know the trade is no longer valid, you have to get out.
07:04 - 07:08
EN: You cannot be adding on hoping that you’re going to be able
07:08 - 07:10
EN: to make a profit or avoid a loss.
07:15 - 07:18
EN: There’s also a social stigma against quitting.
07:18 - 07:21
EN: It’s bad not to keep trying.
07:21 - 07:23
EN: Only lazy cowards give up.
07:29 - 07:32
EN: However, experienced traders know that it’s better
07:32 - 07:34
EN: to be a live coward than a dead hero.
07:35 - 07:38
EN: The goal is to fight for money, not for principles.
Slide 006
Time: 07:40
Bilingual Transcript
07:44 - 07:46
EN: When a person starts out, he has a small account.
07:46 - 07:49
EN: He worked really hard to get the account,
07:49 - 07:52
EN: and he has the dream of becoming a successful profitable trader.
07:55 - 07:58
EN: The money in his account is symbolic.
07:58 - 08:01
EN: It’s symbolic of the birth of his new life as a trader,
08:07 - 08:10
EN: and his greatest fear is an early death.
08:10 - 08:13
EN: He focuses entirely on risk.
08:13 - 08:16
EN: He does not want to lose money because if he loses his account,
08:16 - 08:19
EN: he loses his dream of being a profitable trader.
08:26 - 08:27
EN: He focuses on risk.
08:27 - 08:31
EN: The Trader’s Equation has three variables: risk, reward,
08:31 - 08:35
EN: and probability, and you have to be thinking about all three
08:35 - 08:37
EN: whenever you are structuring your trade
08:37 - 08:39
EN: and then once you’re in a trade and you’re managing a trade.
08:40 - 08:44
EN: Risk is the distance to your stop, reward is the distance
08:44 - 08:46
EN: to the target that you’re hoping to achieve,
08:46 - 08:51
EN: and probability is the odds of making money before your stop is hit.
08:55 - 09:00
EN: Avoiding risk, focusing on one variable, is not a profitable strategy.
09:00 - 09:03
EN: You always have to be considering all three variables.
Slide 007
Time: 09:10
Bilingual Transcript
09:12 - 09:16
EN: You’ll sometimes hear traders take about a “blown account.”
09:16 - 09:20
EN: A blown account does not mean the account went to zero or went below zero.
09:20 - 09:23
EN: It simply means that the value of the account fell
09:23 - 09:26
EN: below the broker’s minimum level for trading.
09:26 - 09:29
EN: If your account does not have a certain number of dollars in it,
09:29 - 09:32
EN: the broker will not let you trade.
09:35 - 09:37
EN: One of the problems of only focusing on risk
09:37 - 09:42
EN: is you assume it’s the only danger – risk implies danger – but it’s not.
09:46 - 09:49
EN: You also have to consider reward and probability,
09:49 - 09:53
EN: and you need to think about all three when you’re structuring a trade.
09:59 - 10:01
EN: You need to take profits that are big enough
10:01 - 10:03
EN: to make the Trader’s Equation positive.
10:07 - 10:10
EN: If you take a trade that has low risk,
10:10 - 10:12
EN: you have a low probability of making money.
10:12 - 10:15
EN: That means you have a high probability of losing money,
10:15 - 10:20
EN: and if you’re only taking low probability trades, you must hold for big profits
10:20 - 10:25
EN: because you need those few winners to overcome all of those losses.
10:25 - 10:28
EN: If you don’t get the occasional very big winner,
10:28 - 10:30
EN: your account is slowly going to disappear.
Slide 008
Time: 10:35
Bilingual Transcript
10:38 - 10:41
EN: There’s only one thing that you can do to consistently make money,
10:41 - 10:43
EN: and that’s do the hard work of learning how to trade.
10:44 - 10:46
EN: There are no magical candlestick patterns.
10:46 - 10:47
EN: Nothing is easy.
10:47 - 10:50
EN: You’re competing against the smartest people in the world.
10:50 - 10:53
EN: If something was easy, everyone would be doing it.
10:53 - 10:55
EN: Every trade needs someone to do the opposite.
10:55 - 10:58
EN: There would not be enough smart people willing to do the opposite.
10:58 - 11:03
EN: Therefore, you’re looking for an edge, a slight mathematical advantage
11:03 - 11:06
EN: that will allow you to consistently make money.
11:06 - 11:10
EN: Because the edge always has to be slight – you’re trying to take money
11:10 - 11:13
EN: from very smart people – you have to be consistently good.
11:16 - 11:19
EN: You cannot blame anyone else for your mistakes.
11:19 - 11:21
EN: You have to assume responsibility for your mistakes.
11:25 - 11:28
EN: At the same time, you should never be hard on yourself after making mistakes
11:28 - 11:32
EN: or after losing money, because everyone is going to have losing trades,
11:32 - 11:37
EN: and if you keep focusing on what took place 5 minutes ago, 5 days ago,
11:37 - 11:40
EN: you’re not focusing on what you should be doing right now at the moment.
11:44 - 11:46
EN: Great traders make mistakes.
11:46 - 11:48
EN: Great traders have losing trades.
11:48 - 11:50
EN: The difference between a great trader and a beginner is
11:50 - 11:55
EN: that the great trader is quick to see his mistake, and he gets out.
11:55 - 11:57
EN: When he knows he’s wrong, he just gets out.
11:57 - 11:58
EN: He doesn’t care if it’s a loss.
11:58 - 12:00
EN: He knows he’s wrong and he has to get out.
12:03 - 12:05
EN: That’s what you should do when you make a mistake.
12:05 - 12:06
EN: As soon as you decide that,
12:06 - 12:10
EN: “maybe this isn’t working out the way I thought it should,” just get out.
12:10 - 12:13
EN: Take the loss and move on to the next trade.
Slide 009
Time: 12:15
Bilingual Transcript
12:18 - 12:21
EN: Fear of death or the fear of death of your account
12:21 - 12:23
EN: is a tremendous motivating factor,
12:23 - 12:27
EN: and it will make traders do just about anything to avoid it.
12:33 - 12:36
EN: One of the first things traders do when they start out is,
12:36 - 12:38
EN: they look for some kind of protector,
12:38 - 12:42
EN: like a trading guard or guru or some expert who will help him.
12:42 - 12:45
EN: They’ll turn on television and take trades
12:45 - 12:48
EN: that somebody on television mentions – and that’s just dumb.
12:50 - 12:54
EN: TV, internet, magazines, they’re filled with trading advice,
12:54 - 12:58
EN: and it’s useless, right? As a trader, you eat what you kill.
12:58 - 13:00
EN: That means you have to make the money yourself,
13:00 - 13:03
EN: and nobody else is going to help you.
13:07 - 13:09
EN: Just because somebody on television says,
13:09 - 13:12
EN: “oh, this is a buy,” does not mean you make money.
13:12 - 13:16
EN: Not only do you have to buy to make money, you have to manage the trade,
13:16 - 13:19
EN: and as it unfolds you get more information,
13:19 - 13:22
EN: and that makes you adjust your management decisions.
13:22 - 13:26
EN: The guy on television is not telling you what to do after you’re in the trade.
13:26 - 13:30
EN: A lot of times as soon as you get in, you decide it’s a bad trade.
13:30 - 13:33
EN: Also, sometimes he’ll say on television it’s a buy,
13:33 - 13:36
EN: and then tomorrow some overnight event will have happened,
13:36 - 13:40
EN: either with your stock or with the market, that makes it a terrible buy.
13:40 - 13:42
EN: He’s not there to help you.
13:42 - 13:44
EN: You have to make the decisions yourself,
13:44 - 13:46
EN: and you have to learn how to make the decisions.
13:46 - 13:49
EN: Sometimes your decisions are going to be wrong.
13:49 - 13:50
EN: Just get out.
13:50 - 13:51
EN: As soon as you think you’re wrong,
13:51 - 13:55
EN: as soon as you think your premise is no longer valid, get out.
13:59 - 14:01
EN: That guy on television, you’re asking him
14:01 - 14:04
EN: to give you a fish so that you can eat.
14:04 - 14:05
EN: That’s not how it works.
14:05 - 14:09
EN: Hoping that someone gives you a fish is not a plan for survival.
14:09 - 14:11
EN: Learning how to fish is.
Slide 010
Time: 14:15
Bilingual Transcript
14:18 - 14:21
EN: You have to spend time to learn how to trade.
14:22 - 14:27
EN: However, once you become successful, life can become magical.
14:27 - 14:31
EN: I’ve heard from many, many traders over the years who were losing money
14:31 - 14:35
EN: for protracted periods of time, and then they finally became successful.
14:35 - 14:38
EN: The amount of money that they made was astonishing.
14:38 - 14:40
EN: They couldn’t believe how much money they were making.
Slide 011
Time: 14:45
Bilingual Transcript
14:46 - 14:49
EN: I’ve talked many times about how beginners focus on risk
14:49 - 14:52
EN: and how they want minimum risk
14:52 - 14:54
EN: because they’re afraid of losing their entire account.
14:55 - 14:57
EN: However, because of the Trader’s Equation,
14:57 - 15:03
EN: you know that if there’s small risk, then the risk/reward is fantastic.
15:03 - 15:06
EN: You’re risking very little money and you’re hoping for a great reward.
15:06 - 15:10
EN: You also know that whenever there’s fantastic risk/reward,
15:10 - 15:12
EN: the probability is low.
15:12 - 15:15
EN: Chances are you’re going to lose most of the time.
15:15 - 15:20
EN: It is impossible to have a small risk of making a reasonable profit
15:21 - 15:24
EN: and having a high probability of achieving that goal.
15:24 - 15:28
EN: It just cannot happen because everyone would take the trade
15:28 - 15:30
EN: and there would be no one left to take the opposite side of the trade.
15:30 - 15:33
EN: If you’re getting fantastic risk/reward,
15:33 - 15:36
EN: the institution taking the opposite side of the trade
15:36 - 15:38
EN: has a high probability of making money.
15:38 - 15:40
EN: You have a low probability of making money,
15:40 - 15:43
EN: and that means you’re going to lose most of the time.
15:48 - 15:51
EN: Let’s say you see a Wedge Bottom in a bear trend
15:51 - 15:54
EN: and a decent reversal up, and now you see a Higher Low.
15:55 - 15:57
EN: Is it reasonable to buy here? Yeah.
15:57 - 15:59
EN: It’s probably better to take a second entry buy
15:59 - 16:01
EN: after 3 bear bars, but it’s reasonable.
16:06 - 16:10
EN: A beginner, he’s going to put his stop below his buy signal bar,
16:10 - 16:13
EN: thinking that “Oh my gosh, I don’t want to lose any money.
16:13 - 16:16
EN: If I’m going to lose, I don’t want to lose much.
16:16 - 16:17
EN: This is my signal bar.
16:17 - 16:20
EN: I’ll place my stop just below my buy signal bar.
16:20 - 16:22
EN: Therefore, my risk is very small.”
16:23 - 16:25
EN: Whenever you have small risk,
16:26 - 16:28
EN: the probability is high you’re going to get stopped out.
16:29 - 16:33
EN: That is just a fact, because you cannot have small risk
16:33 - 16:37
EN: of making a reasonable reward – in this case you’re hoping for a big reward
16:37 - 16:41
EN: - you cannot have a fantastic risk/reward situation
16:41 - 16:44
EN: and a good probability of achieving your goal.
16:44 - 16:48
EN: The probability is always going to be low, and that means chances are
16:48 - 16:50
EN: if you buy above this bar and put a stop below that bar,
16:50 - 16:53
EN: the odds are high you’re going to get stopped out.
Slide 012
Time: 16:55
Bilingual Transcript
16:59 - 17:02
EN: If you’re taking low probability trades like this,
17:02 - 17:05
EN: you’re going to bleed to death from a thousand papercuts.
17:05 - 17:06
EN: Think about this for a second.
17:12 - 17:15
EN: Let’s say you win 10% of the time.
17:15 - 17:18
EN: When you do win, you win 20 times bigger than you lost.
17:18 - 17:21
EN: Well, that’s mathematically acceptable.
17:21 - 17:25
EN: But the problem is if you take 10 trades like that and you get one winner,
17:26 - 17:28
EN: you have to manage that trade perfectly to make up
17:28 - 17:31
EN: for the nine losers, and that’s unrealistic.
Slide 013
Time: 17:40
Bilingual Transcript
17:43 - 17:44
EN: An expert trader might take this buy.
17:44 - 17:46
EN: He certainly would take this buy.
17:46 - 17:49
EN: In either case he would put his stop here,
17:49 - 17:52
EN: below the bottom of the Wedge, below the bottom of the reversal.
17:52 - 17:56
EN: He’s risking more, but he’s also giving himself
17:56 - 17:58
EN: much higher probability of making money.
17:58 - 18:01
EN: He’s allowing for the possibility that the market might pull back,
18:01 - 18:04
EN: and maybe even pull back more before it goes up.
18:04 - 18:06
EN: All he knows is he thinks it’s going up,
18:06 - 18:10
EN: and he knows if it goes below the bottom of this bull reversal,
18:10 - 18:13
EN: then his premise is probably wrong and he wants to get out.
18:17 - 18:19
EN: Here he could take profits at the end of the session.
18:19 - 18:20
EN: He bought here.
18:20 - 18:23
EN: He did not get out; he relied on his stop,
18:23 - 18:27
EN: and he ended up making many times more than his Actual Risk.
18:27 - 18:32
EN: His Actual Risk was from his entry price above this bar right here
18:32 - 18:34
EN: to just below the low of this bar.
18:34 - 18:37
EN: His Actual Risk is small compared to his reward.
Slide 014
Time: 18:40
Bilingual Transcript
18:45 - 18:49
EN: The beginner who bought here and put a stop here is risking very little.
18:49 - 18:55
EN: It’s far easier to make money if he trades small and uses a reasonable stop,
18:55 - 18:59
EN: even if the stop is far away and the risk is relatively big.
18:59 - 19:01
EN: Much easier to make money.
19:02 - 19:05
EN: Use the appropriate stop and trade as small as you need to trade
19:05 - 19:08
EN: so that you don’t worry about the amount of money
19:08 - 19:09
EN: you’ll lose if your stop is hit.
19:10 - 19:13
EN: If the amount of money is too big, don’t take the trade.
19:13 - 19:16
EN: If your stop is too far away for you
19:16 - 19:19
EN: to be comfortable losing that amount of money, do not take the trade.
19:19 - 19:21
EN: Wait for a trade that’s in your comfort zone.
19:25 - 19:30
EN: Low-risk trading is very low probability trading, and that is a losing strategy.
19:35 - 19:40
EN: Again, you have to manage those rare wins perfectly to make money,
19:40 - 19:43
EN: or you have to be correct 70% of the time.
19:44 - 19:48
EN: If you’re taking a low-risk trade, the only way you can make money
19:48 - 19:50
EN: is be right a very high percentage of the time.
19:51 - 19:53
EN: As a beginner, that’s just not going to happen.
19:59 - 20:01
EN: Since a beginner cannot manage perfectly
20:01 - 20:05
EN: and since he’s not going to be right 70%, 80%, or 90% of the time,
20:05 - 20:08
EN: he should not be taking low-risk trades.
20:08 - 20:11
EN: He cannot make the Trader’s Equation positive,
20:11 - 20:16
EN: and with a negative Trader’s Equation, by definition it’s a losing strategy.
Slide 015
Time: 20:20
Bilingual Transcript
20:23 - 20:26
EN: Experienced scalpers sometimes will use tight stops,
20:26 - 20:30
EN: and that’s because they know where a high probability trade is
20:30 - 20:32
EN: and they know how to structure a high probability trade.
20:37 - 20:41
EN: A really good scalper, he’s going to make money 80% or 90% of the time
20:41 - 20:44
EN: with his trades, and that’s absolutely impossible for beginners.
20:44 - 20:48
EN: It’s actually absolutely impossible for most really experienced traders.
20:48 - 20:52
EN: There are very few experienced, very profitable scalpers.
20:52 - 20:54
EN: Part of the problem is, first, it’s hard to do,
20:54 - 20:57
EN: and the other is it has to suit your personality,
20:57 - 21:00
EN: and most traders would not be comfortable with that style of trading.
21:06 - 21:10
EN: The math is better in this case buying here.
21:10 - 21:12
EN: We have a Higher Low Major Trend Reversal.
21:12 - 21:15
EN: Two or three legs down – one, pullback, two, pullback, three,
21:15 - 21:19
EN: or High 1 – High 1, High 2 – and a Higher Low Major Trend Reversal
21:19 - 21:21
EN: with a good-looking buy signal bar.
21:25 - 21:28
EN: In this particular case, you have a good-looking buy signal bar.
21:28 - 21:30
EN: You have a Wedge bull flag.
21:30 - 21:33
EN: Small bull trend, bull flag, Higher Low Major Trend Reversal.
21:33 - 21:36
EN: It’s reasonable to buy above this bar and put a stop here,
21:36 - 21:38
EN: or you could still put your stop down here.
21:38 - 21:42
EN: However, if this trade is good, after three attempts down
21:42 - 21:45
EN: - one, pullback, two, pullback, three – if it goes above this bull bar,
21:45 - 21:49
EN: it should not go below the low of that bull bar if the trade is good.
21:49 - 21:52
EN: If it goes below the low of this bar, the trade is probably not good.
21:52 - 21:56
EN: This is an example of when you can use a tight stop.
Slide 016
Time: 22:00
Bilingual Transcript
22:01 - 22:05
EN: In this video I talked about some rules for avoiding big losses.
22:05 - 22:08
EN: One of the most important rules is you always have
22:08 - 22:10
EN: to have a stop in the market, not in your head.
22:11 - 22:14
EN: Another is if you think your trade is unfolding different
22:14 - 22:17
EN: from what you were expecting, get out.
22:17 - 22:19
EN: If you think you’re clearly wrong, get out.
22:19 - 22:21
EN: Just take the loss and don’t worry about it.
22:22 - 22:25
EN: Finally, avoid low-risk trades.
22:25 - 22:26
EN: Use the appropriate stop.
22:26 - 22:29
EN: If the stop would result in a loss
22:29 - 22:31
EN: that is beyond your comfort level, do not take the trade.
22:31 - 22:35
EN: Just wait for a trade that would allow you to use a smaller stop.
22:39 - 22:40
EN: I’m Al Brooks.
22:40 - 22:42
EN: Thank you for watching the Brooks Trading Course.
22:42 - 22:46
EN: This is the third of four videos on losing because of mistakes.