 Hey, what's up YouTube? It's Z2CryptoMinded and today we're going to be talking about the mindset of the stop-loss. Let's get into it. All right, you two, we're back. If you're wondering what a stop-loss is, what is a stop-loss? A stop-loss order is simply an order that closes out of the position at a specific price. It controls your risk by limiting your loss to that price. If you buy a stock at $20 and place a stop-loss at $19.50, when that price reaches $19.50, your stop-loss order will execute preventing further loss. So to explain exactly what that is, if I buy a stock at $20 and I set my stop-loss at $19.50, if it reaches that price, it's going to automatically sell for me. If I'm away, if I'm out playing sports, if I'm on the airplane, when that price hit that specific price point of $19.50, it's going to automatically sell that stock at $19.50 and I don't have to risk falling asleep at night if you're trading forex or being on a plane or away for business or somewhere where you don't have signal. That stock just plummeted from $20 and it had its market open and then it drops all the way down to $15. You do not have to worry about missing that much percent anymore by setting a stop-loss. Sounds simple, right? Wrong. You will only start to understand how difficult of setting a stop-loss and sticking to it is once you start day trading or if you're a swing trader or even if you buy and sell stocks every now and then using Ryberhood or NY Finance or any brokers that you use, you'll actually see how difficult it is to of the mindset of using your stop-loss. The stop-loss would be such a simple thing if only use a robot and brought no emotions into the trade at all. In fact, the topic of stop-loss deserves a book itself. Honestly, it really do. The interesting twist on the stop-loss is that even though we're nowhere wrong 50% of the time our ego behaves as if we have to be right 100% of the time. So without any further notice, let's go ahead and dive into the mindset of the stop-loss. When people say that they don't believe in the stop-loss what they're actually saying is that they don't like to admit that they're wrong and they are often actually aware that there's something wrong. Yeah, they are willing to take on more pain and more agony than ready to admit they're wrong, hoping that things will turn around and go back into the profit. Many times it don't because it's being profit means being right that means losing money logically means that you're wrong. Therefore, any loss is a self-attack constructed by your ego itself. And since your ego always wants to be right and always wants to protect itself at any cost, we sacrifice profits. And why you're doing that? You're suffering pain the entire time. Your ego. We are not born eager to take profits early. Quite the country in fact. Beginners luck stands for taking big risks on a low probability event. Something no seasoned player would never dare. We become risk adverse after a few painful losses. We seek profits evaporate before our eyes and we want to keep some of it next time. Basically, risk to reward. People would take profit at five ten dollars while they're in profit. That's what I do. I take profit when I'm five ten dollars in, but without a stop loss, they're willing to risk 40 to 50 dollars losing, hoping that that market, that stock that ticker symbol would turn back around. So you're willing to risk 40 to 50 dollars is going down 40 dollars down 48 dollars. Now you're down 50 dollars hoping that it would turn back around just so you could break even. So your mindset is that you would take profit at five and ten dollars, but when you're losing five and ten dollars, you won't take your loss and move on to the next ticker symbol just so that you could get back into the market and hopefully make your money back, but you're actually keep moving your stop loss down or you don't set a stop loss at all. Now you're down 20 dollars. Now you're down 25 dollars. But when you could have just cut your losses at five ten dollars, if you're willing to profit five and ten dollars, why not just cut your costs at five and ten dollars other than let it just keep going down. So that's a big mindset that I have when I first started day trading or swing trading is that I would let it go down. I didn't have a clear goal on my take profits. I didn't have a clear goal on my stop loss. So stop loss is very important. Do not risk more than you're willing to gain. Okay guys. So if you want to profit 15 to 20 dollars, do not let it go lower than 15, 20 dollar loss. Do not let it go down to 30, 40, 50 dollar loss to sitting in there taking it, hoping that the market turns back around. So that's number two right there for you. Alright, here's another one. If someone handed you the keys to the sexiest car on earth, but whispering in your ear, the brakes do not work. Would you still drive it? No, you will not. The stop loss is the brakes. You might not like them, but they would keep you alive. Do not remove the stop loss once you set it. So you're asking when should I set a stop loss? How do I set a stop loss? You should always set your stop loss at least five minutes or a minute before you actually take a position in that trade. Stop losses are necessary to calculate position size. If you do not set a set limit on how much you can afford to lose, you may fail to appreciate what the market has in store for you. Do not trust your brain into setting a mental stop loss because your brain would trick you to moving that stop loss down thinking that the market might turn around because your brain would be like it can't go any lower. It can't go any lower. When I actually add it, it goes lower. So let's dive into thinkorswim and take a look at actually how I go about setting my stop loss intake profits before I actually enter a trade. Let's get into it. Alright guys, here we are. I just pulled up thinkorswim. Let's get into it. Alright, so this is thinkorswim, the platform I use to set up my trades. As many of you guys know, if you subscribe to the channel, I love trading AMD. I follow it in everything that they do. So let's zoom in a little bit on the five minute one day chart. Actually it is the five minute five day chart. If we look here to yesterday's low was around $28.03. So let's draw yesterday low right there. And yesterday's high was at $28.85. So let's say if the market opens tomorrow at 20 where it closed at $28.30 and I want to enter a trade. I would set my stop loss maybe one cent below yesterday low at $28.03. I would set my stop loss at $28.02. Alright, so what I'm saying is that once I set my stop loss at $28.02, I'm not going to move it. Why did I pick $28.02? It's because it's one cent below yesterday low. And if you actually look at it, my profit of margin of profit is 2% if it rise all the way up to yesterday's high. And if it falls, I will only lose 1.92%. So my margin of profit outweighs my margin of loss. So I see that as that's how I set my stop loss. My stop loss is all my profit will always outweigh my stop loss by a few percent or by a few bucks or so. So that's how I set my stop loss. It's pretty simple. It sounds simple. But once if the market opens right here and it dips down a little bit, a lot of people would say, Oh, it's there early in the stock market and might recover later on, but it could it could just tank. It could just tank and keep going down. So no one really can predict the stock market. All you could do is read the charts and pretty much hope for the best. Okay, pretty much hope for the best. So yeah, YouTube, that's it. That is the mindset of the stop loss. Go ahead, like, comment and subscribe. Comment. Have you ever had any bad stop loss situation down in the comments below? But I'm going to be upgrading my channel pretty soon. You guys already say I got a new mic, so go ahead and subscribe to the channel. Peace. Bye.