 All right everybody well welcome to the book map for a trader webinar series. It's going to be a Unique series all week long that we have going on with All the different professional traders today. We have Jay trader stocks trader with both small caps and large caps as you guys know and He's going to go through how he manages trades in book map and This is such an important element within trading. So really looking forward to it Jay trader is one of the best that I have come across At being able to cut the trade quickly if it's a loss This is a skill that most traders it takes years to develop. So this is something that Really a treat pay attention to so let's go through the disclosure Or the trader's bio Is fine So yeah, so as you guys know Jay trader's been with us for quite a while and trading every week Wednesdays just trade. He just changed his time to 9 a.m. East coast time here, but he's been trading since he was 18 years old and the volume that he's been trading has been really You know Another level He's just gotten better and better over the years and offers lots of different services and mentorship within the US equities trading and options in his small caps room. So Anyway, the go through the disclosure and then we'll just let Jay trader take it away. All right, so All book map limited materials information and presentations are for educational purposes only and should not be considered specific investment nor Recommendations risk disclosure trading features equities and digital currencies involves central risk of loss And it's not suitable for all investors past performance is not necessarily Thank you very much everybody and take it away Joseph So, thank you Bruce. Thank you book map for this opportunity Right here. So I know that the market is hot this morning if you are following I shared a Couple of trades we've made But today we're gonna have a different lesson. So risk management. So I prepare some special lesson for the book map Public over here. And then if we have time, we're also gonna dive in live market so there's a lot to say about risk management and I think is one of the Points is traders need to understand if you want to become good in trading It's not only about your strategy. It's not only about, you know, pressing the buttons So it's not only mere tactics, but it's also Part of a bigger I would say a Bigger overview which includes risk management and also mindsets and discipline In this case, they are different points when we're looking at risk management. So what is is this vacation? Stop loss targets are okay. Let's start with this diverse diversification Over here a road is diversification is the practice of spreading your investment across various financial instrument basically if you have let's say a starting capital of Let's say X amount of dollars say $10,000 You don't want to invest only in one, you know future or stocks or only one asset But you need to divide because what is? probability of the the big numbers, so maybe you're that one investment won't go good and Instead if you divide your capital per five six even ten assets tickers Okay, you reduce the risk of exposure, of course on every single ticker that you trading and you can have a better performance So essentially is a way to lower the risk How many times we we hear stories about the trader that put out the money? All in one asset only one ticker maybe the ticker, you know give him like the money of a year But also I can simply blow up your account very very fast if that is a wrong decision, which can happen So first point for me is to spread how we say your capital across Different tickers. They could be the same Market like stock market or could be even like you know a series of assets like maybe futures bond real estate So to lower your risk another concept and soon we're gonna see a couple example on large-cap and small caps of what this is a stop-loss orders, so Seems like you know something that everybody should use But when I mentor traders or I talk to traders still a lot of traders the new stop-loss They say they have an idea where they want to bail out if things go wrong But they actually don't set it up or sometimes they have an idea, but they don't have clear when they have to get out and that's Very bad thing because it expose you at such bigger losses So seven in a stop-loss orders help traders manage their risk by providing a clear cut-off point for a losing trade And this is what I suggest whenever you're thinking about trading The first thing you should Do is to protect your account protect your capital how you can first with Acid diversification Second with a stop-loss order and before taking a trade you always should ask these three questions that I always tell to my student One what strategy are you trading? So what is the setup? Second where is your stop-loss and of course it's not only about a technical level of stop-loss But also it's about how much you're gonna risk in terms of dollars for your investment and Third where is your target and then once you're in a trade also? It's very important to ask yourself always do I still have green lights to hold the trade because maybe we're the reversal pattern or I Would say a reason to get out Now this is our first example that I've put over here in this case with a small cap This is from this year. So we're talking about the last couple of weeks or recent trade In this case we start looking about where to put the stop-loss, okay? I don't know how many traders trade small caps over here. So if you do just like a reach out on on Discord or reach out over here in the YouTube session so we can you know Go over this together But this was a stock wiza that was up on day one. You can see over here This was the the 17th of April and then the 18th over here of April We had over here an unwind and then this was the the 19 so the 19th started to push this is a After the gate around 930 and you can see that the price over here started to push from this low around 550 the majority of these Dots, okay are green. So this is what this means We have a lot of volume over here a lot of buyers demanding control and we started extending from 550 Up to 750 where we have this high liquidity Level of heat map. So almost two points in about 30 35 minutes And you can see the volume also be here, okay? We have the majority's volume. They are buyers You can see also the volume down here so Being that in small caps, we have a lot of short sellers Short sellers will start to short at key levels and this is important because you want to short not the front side But generally you start looking at the key level once a price form a lower high and you start seeing like sellers shifting so from few Sellers you start seeing more sellers price stalling rejecting sometimes these stuffs You can see over here on the book map. You have a first major Level of resistance on heat map 750. So sellers over here are placed Then we have another one over here around 740 745 and the price gets rejected So let's say shorts will start to get in over here 730 All right between 740 and 730 Now this is the point where putting a stop loss saves your account so in this case We have a key level of book map that tells us the correct point to put a stop loss So just above that 750 generally I like to risk few cents because sometimes what they will do They were like on purpose Fake out the 750 so trap over here bull traders giving a fake break out Rock pull so fake clear out and then it will unwind all the way down That's the reason why I tend or to risk, you know, really the 750 so let's say we have 40k shares when it goes back to 10 km out or I risk few cents above There's a parent cons I mean you have to be careful because if you risk few cents above and it's a very strong Breakout you can your stop loss can simply get run over Sometimes get filled on a partial not even get filled because it's you and now there may be 100 or 1000 of traders trying to get out bail out and you won't get filled That's the reason why if you put a marker or you will get filled but you will have a spread So you will have like a slippage in where you want to get out 750 was a technical level where We had previously the price bounce over here. You can see the bounce price bounce again over here rejected So that is the reason why we had 750 as a clear Possible level where the price could reject You can see that the first Start over here the trade it was working because we had the 750 rejecting goods So we were simply away from shorting this side, but once the price over here It start to reverse you can see again the volume Starting to push over here the buyers. So we got a over here stop of 15 20 cents and that's correct because often some of these stocks can run a couple of bucks So you still have a loss, but that loss will be totally smaller versus the possible. I would say big Run stop loss that you can have in a big loss for the day Two things to understand over here concept of stop loss which saves your account and also saves your we say Mental energy because sometimes you don't use a stop loss and then you start fighting the trade So having a stop loss you simply cut right away the wrong position and you don't have end up You know following the trade hoping and praying that the trade will go back into your direction But you simply now can reset look for another level to trade or simply change ticker to trade Concept of risk management So in the next Char that I will share we're gonna cover a large cap and We're gonna cover a large cap that we traded last week. It was Netflix So over here a few things to say to understand risk management in stock trading. It's essential to grasp Various strategies that can safeguard investment and optimize results returns Here we'll explore key concepts as diversification Stop loss order profit targets the importance of thinking in terms of our so not really to think about in PNL so much money you're making or losing But thinking about are and that really brings away your attention from an emotional side to more a systematic process Following price action and utilizing tools like book map to analyze order of flow and liquidity Let's get now to this example. Okay, so we have Netflix. I don't know if anybody traded this last week But remember Netflix, it's a high-price stock. So a lot of traders will try to trade this for example with options Be careful even when you trade option because sometimes it can be spreading. So You have to Learn first how to trade options With very very small size practice first in demo and then you can switch to a live account Net also options. Remember, they are very remunerative But also they have we say wider risk, especially for new traders Netflix this was an example that we took in the room and Look over here the concept of moving the stock to break even So it's not only about placing the stop loss. All right. So over here you can see that in the morning We had a drop. This was 930 and then we start bouncing Over here into the 560 So looking at book map, you can see this Double bottom we started to come over here near the 560 where we have liquidity stacked So we have buyers over here waiting to get filled Supporting over here the price and then when it starts to curl the price You can see this curve then we start seeing like buyers getting in Increasing volume. So we took over here along At 568 568 and 50 which is near this arrow that we are Putting on the chart of book map and then once the price Got into this level of liquidity So this I call it often catalyst because catalyst is like a magnet where the price often can be attracted to okay, so Magnet at 571 and you can see once the price reject the 571 over here We started to unwind Few things to say about this The first stop loss we're gonna put over here. Okay, so once we enter 568 We're gonna put the stop loss at the low of the bar or even over here risking the 560 Where we have book map now it really depends in terms of dollars what you want to risk But we will consider this one our risk and after we're gonna have some more thumbnails Some more examples where we have to plane that difference between trading in terms of our in terms of P&L But essentially over here if this is one our trade We won't get out at least till to our off trade to our return on Netflix Over here, we can measure now one hour in about six points So means that to make to our return Which is the minimum that we want to see for the first exit would be 12 points the price over here Doesn't go to 12 points. Okay should have been a 580 But we can see that the star rejecting the 571 and we decide to cut the trade. So this was the first trade over here So and this means like understanding order of flow Not only helps you to Have a better risk management But it helps you to distinguish between a stock that is going up So a long play and then when to bail out so moving your stop loss to break even in order not to risk profits Imagine if we would have held this trade from even small wind that we had this would have turned into a major loss So how to understand over here went to cut your position Well, when we take the trade I Like after one hour one hour and a half to take to move the stop to break even that's generally my rule could be like some different patterns for example, if we trade Stuffs or different type of reversal, but generally after one hour one point five far I'm gonna move my stop to break even and here Bookmap gives us Reason then to move the stop to break even and Once we see the price getting to break even we simply get out now you can Get out and if you're only trading over here along simply don't trade anymore or like in this case happened We start seeing a new seller over here. So a new level of liquidity at 570 So another level where they were topping out the action because you can see that over here They tried to push above But it was always rejected and sellers started to join you can see over here seller joining so When the price crossed the 56570 sorry 570 to the downside then we started like looking for a short play In this case we want to always measure our risk. Oh, we're gonna put our risk At the relative high so at this 572 and then of course we're taking out Let's say one third at 2r 4r and then we're gonna trail the rest So before we spoke about asset diversification second we put the Stop loss as the main parameters to protect your profits But also protect your account if a trader doesn't work that's necessary and third over here we put the We say attention to moving the stock to break even because how many times we'll have a stock there for example We long this goes up. Maybe 3 4r comes all the way down and You end up break even with not even taking a partial over here. So knowing where we have levels of catalyst That in this case are like magnets and from where we have the price reversing That is an important key in trading because knowing that you can start taking profits and then moving your stop to break even All right, so it's not only a concept of all right 2r I will sell 25% that 5r. I will sell 50% at 10r I will sell the remaining or trailing let's say with the moving average on high lows But as actually using in this case order of flow to spot those levels of liquidity where you know there can be Irreversal and What else is Missing okay, what has the method else that is missing over here? So we spoke about stop loss moving the stock to break even and now concept of profit targets Okay, so remember what we said in the beginning once we're looking at the trade or to take a trade Don't enter in a trade and then think about okay, where's my stop loss? Where's my profit target? No calculate in advance because before you take the trade you have already planned the risk-reward ratio Okay, so how much I'm going to risk and I'm not I'm going to take the profit too and That is called our return So you need to know where to put the profit targets So setting profit targets another crucial risk management strategy this involves Identifying a specific price in which you will take profit and close your position This help traders lock in profits at an optimal moment before market condition can reverse those gains It's just like what we explain right now, but I want to make another example in this case on AMD so MD last week Trade Here we have the price and 930 Fading you can see price opening over here 930 Start to fade. So we were 153 and 50 came down to the 150 and 50 so at this level that you see over here on book map and then Once we had you can see also this fake break them, right? So we broke the support start bouncing back up. We came all the way up. So Buyers are stepping in over here You can see buyers are stepping in over here and they move the price back again at the open level now the What I want to explain over here is where to set the risk and where to set the target profit. There are different Ways to do it. There are different like your strategies One for example is taking profits at key levels using book map. So scaling out One is for example taking a partial at set Our return, let's say to our taking 25% for our 50% and so on one is looking at for example the key levels on the daily chart and then having the Confluence with book map if we have liquidity stack over there to scale out in partials so the best way I believe is that you test and see which one works more for yourself so that you can You know find the the best entry and the best exit for for your strategy and also for your personality Over here the price you can see has a pullback Comes down and another pullback. So we form a high and then a lower high And over here we have our entry pattern. So I put over here a risk Exactly at this one 52 and 20s and why at this level? So first of all, I remember before we are talking about the fake breakouts and fake breakouts, right? So here we have a level which is a whole dollar number 152 so market traps are Not any more market makers, but our algorithm that studied the behavior and the mindset of the trader So they study a chart pattern the months of the trader and they know exactly where the trader will enter and They use these levels to trap the retailer So with an order of flow over here, I can see a clear liquidity of resistance at 152 At this point they clear out that liquidity So they form of a hero breakout often this breakup can be really Given and made from the market maker so from the algorithm that want to trap the retailer So they invite the retailer over here to enter long and then once we see this They start liking that selling their position the algorithms or even going short So this is could be a algorithm could be a big hand, but essentially it's like a how smart money Wants to trap the retailer So we have a key level 152 We have over here a level on book map at 152 and Then once the price shift below the 152 and you can see also this green line Which is the heat map shifts below 152 and 80 we can take our position So how we measure our risk? If I'm a short in 151 and 80 so on the cracker the V-wap after fate break a key level fate break awesome book map I'm risking 40 cents That is gonna come be considered our one hour risk. So 40 cents is One hour risk could be 40 45, but essentially this is one hour So you have to back test your strategy. So looking for example, do we have a 60% 50% win-rate strategy, okay, then at least you will need a 3R return Even more to have a decent profit on the long term, okay So let's say you want is return over here are or profit factor 3 plus and Now we have to measure where's the target? so the target generally I'm looking for the Previous support from where the price bounce or rejected and we can measure over here 150 and 50 this also is Back up and confirmed by a catalyst that we have over here on book map So you can see that 150 and 50 over here. We have some good liquidity in This case, we're risking 40 cents in order to make 1.20 1.30 bucks. So this potential return Okay, is it least 3R and that's why I'm going to take the trade But I need to do this before I'm taking the trade not I'm in the trade for example I treat over here my feeling maybe as late as bad I have doubts I chase and then I start thinking okay now Where is my target and maybe at that point your target is still over here But you have like one hour 1.5 hour return So try to measure everything in advance and this comes only for example with retraiting That's the reason why I always say record your book map Replay it on Sunday on the weekends where you have free time to start looking at your analysis While for example you're retraiting one good tool that I like to do is like I retrade and Then I look at book map replay the same time So that I focus on those key levels that I see on book map to determine also my Profit targets and also my stop losses, okay So it's not only about it's a previous slow or a key daily level But it's also looking at what we have in Confluence with the key daily level on book map at this slow so 130 120 cents risking 40 cents is 3R and that is gonna be a valid trade again over here a concept of Moving the stop to break even after one one point five are Personally I like to put a stop to break even as we reduce the risk while in a trade now Sometimes you will see that this won't work Because for example the price can go one hour in the money You put a stop break even you get the stop out So you're getting stopped out and then goes back and maybe goes like five six hour of return It can happen and that's part of the game personally When that happens always evaluate if when it gets to break even I have a big level where it can risk for example on book map Let's say in this case you can see that we have a usually critical level came over here So this could be for example my trailing, okay? If the price goes back up, but otherwise as I said I stick to my rules because I back tested my system like that in a very systematic way and I Trade based on data. So everything that I trade is based on a precise playbook now Concept of diversification concept of stop loss Concept of targets moving the stop to break even and now we're gonna think about What? the risk and not the PNL so Thinking terms about our okay Focusing on our Means risk reward instead of merely looking at profit and loss Encourages traders to think about how much they are willing to lose on a trade level relative to their expected gain so You don't have to be like surprised when you have a loss because you have to Think in advance and calculate advance. What is your stop loss? Technical so where you have to place it, but also how much you're gonna lose in terms of dollars This is often expressed as a risk reward ratio where the trader might risk one unit of currency To potentially make three or four or five remember could be We're talking about a risk in terms of dollars So I want to risk 500 bucks in a trade or 100 bucks in a trade or I'm gonna risk for example 0.1% of my account This approach helps in making calculated decision rather than emotional ones based on the fluctuating value of their portfolio Because how many times you'll see why I'm making a good PNL, right? Oh, let me cut the trade and maybe let's say just for for an example Maybe you made 1,000 and that's where you are very good trade and you simply cut in your position You bank $1,000 and maybe the trade would have gone 3,000. So first of all Trading based on emotions is never gonna pay you because you're not gonna have data and Strategy on your side, but it's gonna be intuitive is gonna be like Stressful is gonna be also frustrating many times. So don't trade emotionally, but trading instead on calculated decisions Which is a systematic process Also treated if you have any questions Retail I'm here to help you and answer your questions. Let me know also if What we're doing over here is it's clear if it's useful for you Yes, of course, okay so This I mean, it's really great. I mean, it's kind of harkens back to the days when we did the webinars together and you know, I would just be there to answer questions or ask questions and Having the risk reward like and the theme of this webinar series is trade management There is one step that I recall vividly Beforehand, like we would cover this is the edge that you have in the trade You have to have this part first And then you think in terms of risk reward and not P&L So if someone does not have that edge They have not they don't even know the strategy that they are trading Well, then this isn't going to make too much sense Yeah, you can still manage your risk, but you don't know if you have an edge exactly you can be taking the trade over and over again So just I just for for all the newer traders out there. The first step is to have an edge And I was just wondering quickly or how do you quickly determine? You you determine your risk and rewards in your your and your point sizes, but how do you determine your? Your risk in terms of the shares that you're going to trade. Yeah, so personally, I like to use hot keys that I have for example with my platform where I can simply set the Dollar risk that I want to have let's say I want to risk 100 bucks on the trade and platform Automatically calculates and take the trade based on where I put the stop loss You will calculate how many shares or Let's say constantly if I trade options, I'm going to buy in that case It's the system is the platform doing it for me, but we can simply have you know a calculator I want to have let's say $100 risk. I'm gonna risk. Let's say 30 cents Okay, let me put everything and I will see how many shares then I have to buy for me is like The best way because I like to always know. Okay. I know today. I'm gonna risk. Let's say for trades of 100 bucks each and then I can simply think about My max dollar risk per day, which is let's say 400 bucks. There are other ways to do it So for example, I see a lot of traders that in small caps They have for example to one to $3. They're gonna trade 1000 shares because they know that usually they're gonna risk Let's say between 5 and 15 cents $3 and $6 600 years $6 and $9 200 years or the other traders instead. They put a dollar Amount of investment per trade. Let's say I want to trade everything with $10,000. So being there is a $1 stock being there is a Tesla The the platform of course will invest $10,000 and you know calculate the shares for me Which one is the best? I will say to traders to experiment, you know, maybe trade very very small in the beginning and See which one you feel better with if you need help in hotkeys depending on the broker that you have or Setting up just just reach out and and I help you You welcome so Risk is the most important thing now risk-reward ratio when you have for example platform that Calculate your performance you will see this as a profit factor In this case, we're gonna cover now one small cap and one large cap We're gonna see two patterns using book map as you know Why is that we were talking it before is a stock that likes to extend so as a history of former runner I also placed over here. You can see my you can call them fractals exact, but essentially are serious of higher relative highs and relative lows I want to cover In this case how the price over here shifted from along So this was the first part where you can see every single time we're making higher lows and higher highs While at this point over here, we're setting the first lower high and Higher low so there's a contraction over here and on book map. We'll see over here So before in the previous example, we covered how this was the short remember 750 at this area and the price then Push back up again, and you can see if we wouldn't have stopped. Let's say a 755 760 the stock would have gone still for another 60 cents, okay till $8.10 over here in this case Price you can see the majority of these Dots are green and that tells us a lot of buying over here a lot of demand And then how I like to look for the backside I like to look for the backside when I set my trend line and we start with exactly the trend line so $8 in this case precisely 790 and 750 are to key daily levels at $8 we have also Stack liquidity of wall of a wall of sellers. You can see that when the price starts rejecting in this area We have one resistance second and third. So we have sellers placed over there and Is this point this point this point? So we have sellers. So I have over here a High a lower high and also sellers over here stacked And then I start seeing this trend line break which essentially over here And once we get to this level we can look for a short play Okay, so this is a you know set up that I like to trade so lower highs or lows I start I start seeing over here a shift between buyers and sellers We have over here huge amount of buyers. So all the dots are green over here starting seeing you can see sellers No buyers again more sellers and I start taking the short Now it's time for me to calculate the risk overall ratio So where I'm going to put the risk and I'm going to put over here above the the heat map at $8 I'm going to put over here above the relative high or I simply going to risk over here like 10 cents for example Different ways to do it according to the strategy that you trade So I can scalp. So if you scalp, of course, you're going to risk like 10 15 cents, maybe even less sometimes. I Day trade so I can place my stop loss over here relative high or even over here using this side Of course the higher I put my risk the Less amount of shares I will be shorting because my shares are calculated based on the Dollar risk that I want to lose and of course the more We say cents I have to do to make my three three point five are and Here where I have The edge the edges in here. I Start seeing this liquidity Which I consider as my stop loss. So we're gonna put SL and I like to put here my risk above the relative high Because like this I know that my Target that I want at least a two are the first target Okay, I'm talking about the first target. It's gonna be like sooner that if I put my risk over here So my risk is gonna be over here around 790 And then I'm looking for the target. So I see no big Buyers over here no big liquidity The first major level is at 650 and we're talking about over here So when I'm taking the trade, I know already that I'm gonna risk in terms of cents, okay I'm gonna risk over here something like 25 30 cents and The potential over here. Let's say that I get filled around 765 760 to 660 more or less All right, we're talking about $1. So let's say we're taking over here 30 cents risk Making $1. We're talking about more than three are and that for me is a valid trade to take based on the profit factor that I want to realize and Then of course every single time that I'll be in the trade that I'm holding the trade I'm looking at do I have over here Seller stolen control or we have like a shift and I can see That once the price over here starts getting into this small liquidity areas, especially you will see this in half Dollar number 757 650 and so on the price simply washes Like a big sweep over here boom wash Another one over here you can see push into the liquidity fake out boom sweep wash That tells me I use a mouthful selling pressure that tells me buyers that what that were over here Now are getting out because now they're afraid that let's say they're long over here They're gonna have nothing anymore left and their price is gonna go back to break even remember our you enter long over here It's coming down and sometimes you get over here still didn't take profit No, they're taking profit over here. They're taking profit over here or could be that we have buyers Stepping in over here trying to dip by and they're stepping out over here Okay, so we can have two different scenarios, but the point is was that once we see these sweeps over here okay, so these breakdowns and Fast wash of the the price. We know that this is gonna go down That's our confirmation that the market over here is heavy and I'm waiting for that catalyst As a matter of fact, this was what happened on Wisa, okay So every single time that I'm seeing over here a trend line break and then I start seeing this rejection With this kind of scenario on order flow, which is called stair step down pattern. I like to call it like this I know that we're gonna fail Remember over here We can have more liquidity and this can start bouncing. Okay, so remember price, especially small cap land can React very fast in change in a matter of seconds Maybe you are like up four or five hour boom You're gonna get break even in two seconds because they like to squeeze so fast Now the example on on large cap And this is Amazon What is the best are so over here? using this This simple tool that in this case reading view has but you can do with any other platform is Looking to put the stop loss and showing in terms of our you can see over here. This is 3r Where to put the target so very simple Dynamically here of the of the setup. We have a stock that is unwinding We form a high a low a lower high lower whole lower low lower high and so on On book map We see the pattern that we are saying before often remember once we get the whole dollar number We get to have the numbers daily levels Remember before we're looking at the daily level They push They Ran over the liquidity and over here I believe that we had buyers looking to get in on this break of the VWAP at one seventy seven And then once we see the break boom We have major big sellers. So probably big hands or some big hand over here. That is like Stalling the price one second then watch I was looking at this they started like for this was Thursday or Friday This was Friday. They start like for about 10 seconds. So for about 10 seconds the price was there There was like absorption So they were like buying buying buying the price was not going up and I said, okay if they do like that As soon as they see the field over here of the base of the one seventy seven This is a classical boom. They're gonna drop it. What happened 10 seconds 20 seconds later They dropped it so over here at this point I said, okay now the longs that bought above the breakout of the one seventy seven They were looking for the break of the VWAP. They're like underwater and what they're gonna do when they see the next bar And cannot push they're gonna simply bail out so the The point over here is to look again for the entry so we started seeing the entry after this beautiful Shooting star this is also a pattern that you can see one bar second bar third bar in the three-minute chart is called evening star So we have a confluence of factors and this is another important term that you will see me talking very often We have the VWAP. We have the fake breakout of the liquidity, which is a short pattern in this case We have the J lines third signal We have the shooting star evening star which is a candlestick pattern for signal and then we have the confirmation That they cannot reclaim on the next following bar again the previous resistance one seventy seven So we have a conclusion of five factors that tells me over here. Okay, we're ready to go for a short But besides the setup itself I wanted to put your attention to where to put a stop loss of course. This is where we got Risk because I'm gonna risk that level if you want to be a little more aggressive This is also a good spot as soon as we break the one seventy seven Now why this because we have no more buyers. They are looking to buy above the one seventy seven the buyers over here Are like on the water. They're like exhausted but Now where's the target? So always think if I'm putting the risk over here at least I want three are for your strategy could be four five six Are so you have really to calculate this and I'm always looking for the previous slope Then I saw the here that the price was getting to this Liquid area you can see that we came over here and they start a little bit absorbing and This air was one seventy six. This was three are okay three are we can take the first partial of our trade So entry risk target in about one second You have to do this mentally and you can use it your advantage book map in order to take your your profits What happens over here if I'm in and let's say after one are Often we'll see the price breaking down and Goes back up. So one are we here is really the limit where I will put my stop to break even or Still hold it with the previous risk, which was this relative high So I have to understand that by rules after one are I put a stop break even But also I'm looking at what book map is telling me if we have huge amount of bar stepping in So if I start seeing let's say North Seller all or just like a small pullback that there are these pops They tend to fail so by looking at that I decide if I'm moving the stop by my rules one are stop to break even an out or I keep it over here Risking one are okay. So this is very important and it's something that is still systematic But is decided at the moment using book map over here So we called the first thing diversification second thing stop loss moving stop to break even targets, so profit, okay, and also where to put the targets and also the risk overall ratio, okay, so not thinking in terms of P&L and Instead thinking about the R concept of price action Price action trading involves analyzing the movements of the price itself as opposed to relying solely on technical indicators It requires understanding the market sentiment reflecting the price movements and using it to forecast future prices Traders use patterns in price charts to make educated guesses about upcoming highs and lows And this gets back to what Bruce was saying about having an edge as it could be formed by a Strategy that is to get the width risk management strategy of entry based on chart patterns indicators using order flow confirmation confirmation and so on and This is the example Sorry that I wanted to put out It's not about today. I know that Agba is also today up Agba is a small cap is a very tricky stock. It likes to trap both long and short For example this morning traders. I'm just looking right now the price We had a move from six o'clock 125 to 220 Okay, so in about what three hours this stock went up over here from 125 to 220 and The the first day over here faded from 160 all the way down to $1. So very very volatile very manipulated And now we're gonna look at the same concept that we saw on Amazon before Open in this case we have breakout traders That are moving the price above 160 and again often these moving small caps being that I'm looking at these since 2017 so it's about seven years. I'm tracking the patterns in small caps They tend to be here to give fake breakouts and right away. They stuff them so you can see over here the fake breakout and Then the confirmation comes when you see the clear seller stacked at 160 So you can see this huge amount of sellers over here placed and once they come Drops so at this point We have the confirmation the second bar and this is beautiful because you see over here huge amount of buyers So don't front side short Let the move over here show you where to enter and once we over here They collected enough liquidity what they do they generally like trigger their offering So a lot of these stocks have a lot of dilution. They have no cash or low cash They generally have a low institutional ownership. They tend to have zero to no revenues So generally they are like shell companies, okay, and they use offering So they they hire firms to make this eater to make this path in order to raise money for the company Because many of these are by the company. So they don't have like earnings like or a net profit Let's say like Pfizer. Okay, and they have to experiment new drugs. So what to do over here? What I'm doing this case over here You have to wait the moment that shorts and longs are trapped and then you can trade it Okay, so always wait Traders always wait for that moment that you see One side is trapped. We're strapped over here. This is where you start seeing immediately This is a fast dump And over here if you simply wait You're gonna get filled down here, which is a very bad feel We're talking about cents Over here. You can really short the huge amount. So 30 40,000 shares 50,000 shares So you can make a very good return in a fast two minutes But remember, there's a big difference short in 160 and short over here 135. That is your profit So make a lot of sorry retraining They make a lot of practice So, this is how Sorry If I can just jump in so like that's a really Fantastic to develop on looking for the trap traders Are you looking for it only in stocks with no? Institutional ownership or do you look good for it for all stocks? I? Looked in for those for all stocks But I found out that we have this kind of We can call it manipulation and stop hunts on at key levels In small caps, I see them also in future in large caps. Okay but in small caps is very very is happening very very often and personally I Always think that in order to trade Small caps you definitely to have book map otherwise you have no edge Because you cannot see this with a normal level 2 You cannot see this of course with the chart on chart You will see the technical level and then you will only react later But with other flow you can see in that moment What's going to happen and you can see different than the level 2 already where you have your catalyst So when I'm taking this trade Bruce over here I know ready that this is going to be my target because I know that that's a catalyst over here And you know ready that over here have another one When I'm over here on the level 2 I cannot see that it's so one sex 160. I have a resistance I have a seller stacked But on book map I can see that so if I'm still holding the shore. That's the point I simply can relax and say okay. I'm putting my stop over here I'm risking my profits the worst case scenarios that I'm gonna get out They say break you in for the day, but if it goes down like it over here all day This is gonna be a huge winner So we don't need a big capital to trace small caps Really even five thousand shares. This is like a seven thousand five hundred dollars you can make like a couple thousand bucks on trading something like Agba and It's really like it's really like trading options basically on Tesla. Okay So they're very risky. Yes So there's a big impact of risk and that's the reason why I try to show we start very small But it's a good tool that when you become good you can grow your account very fast Traders in case you have questions On YouTube also we are live so feel free to to reach out The price action over here and after we'll see another example, but look at this the point here is understanding Where longs are trapped? So we need to use or shorts are trapped key levels on order of flow Order of flow trading is a sophisticated approach. You know, we're talking about book map So they give a visual insight in both historical and live market data Showing where order place across the price spectrum. How many times you see a key level that for example We have on Tesla this morning. I was looking at Tesla. We had 140. Okay price was 140 145 and We took along using book map. I can share over here So this is our team this morning. We had this 140 they broke that 140. We had a big heat map of it Here, let me bring up Tesla But this level is A key technical level from really months and months and months and this morning I Was looking first for a short, but I always know that Tesla is so tricky So it pushed up over here We had a breakdown of the 140 it came down. It started to be here. You can see Giving fake break on this one 20 29 and Was breaking down reclaiming breaking down reclaiming breaking down reclaiming at a certain point They put a big heat map of it here at one 39 and 50. So it was still like the last a moment or I would say the last level where they were trying to hold this down and then we started making an under over or Red to green move This sort of here Started 141 Once we clear this 141 Okay, we said this is the morning reversal pattern price came to this resistance it Start dipping into that open level over here I alerted the long for the whole room exactly this 142 clear out and then we started to take this But how many times you see this hold on our numbers or key? technical levels so important and book map is already there showing that high liquidity So that is the reason why I wrote over here that involves reading that real-time flow to predict short-term price and both Historical and live market data. So it's not only story because not only Oh, I'm looking at months ago. I know that that was a resistance where we rejected over at a double top No, also gives you that confirmation that a technical level historical is still actual today pre-planning this is the I would say The sum of everything we did this morning. So I wanted to collect all the examples in one This is GCM D. It could have happened on a large cap on Options on a small cap GCM D as a small cap is a $3 stock Is a stock that we traded last week. I wrote the four points That in this case we have one Calculate the risk reward before entering the trade and as you said as we said we have to know in terms of dollars How much we're gonna risk? Okay To have always in mind your playbook set up to trade the edge without that You can calculate and have three four or five ten our returner and know the stop loss But if you have no ads So if your system is not profitable if you don't know how to read order of flow if you do not want to trade You're not gonna be successful Three know where you have to stop out so know it and personally if you are newbie always place your stop-loss order now Remember if you place a stop-loss order or take profit in pre-market after hours won't work If anybody has dust, I know a way how to make it work. So just reach out. It's a free tip that I can give you For follow order flow once in the trade because as usual like this morning, you saw Tesla We are breaking down the 140. So I personally was thinking in pre-market today. We're gonna get to 135 We reclaim the 140 141. Okay, we went along. Okay, so you always have to have this open-mind Bias because you start thinking only one way you won't see the reality of what the market is giving you In this case is the last example for today we have an open so market pushes and over here we see a rounded cup and What do we see over here? Again, the first part of the move you see buyers So our intention because we know the focus of the company We know this is like not the best company to invest for the long term They were selling in pre-market We have the illusion Many other things so the news was fluff. So we don't sure when it's going up We don't sure when we have like buyers You don't front shy short this morning Tesla when it's about 141 is pushing strong But instead you want to look for a short when the stock is telling you okay Now we have sellers. This is that level Technically we have a general rejection We have sellers over here in bookmas my confirmation We started having a first breakdown over here Second break and also over here on book them up You can see they start bouncing from the two fifth again the half dollar number and then sweep again You can see a fast wash this washes 25 cents in about over here less than one minute like 30 second boom drop And this was like so fast and then again another sweep you can see also over here boom drop So is understanding price section right remember what we said before over here what we have high Low lower high lower low lower high lower low lower high Lower low lower high and it's continued and you can see the same over here high Low lower high lower low lower high lower low lower high, and then it will continue I don't see on this any kind of big buyers even over here if we have this bounce I Know this is often A bounce from covers a bounce because we had a big wash You know over here short sellers are trying to get out and cover their position, but then again Drops again and then dropped again and from this point to 25. They still drop 40 45 cents in terms of percentage This is a big person because it's dropped from 270 To 180 we're talking about almost $1 Okay on a $3 stock So that's a big 25 30 percent unwind in a few hours over here. We're talking about three hours move So stock very liquid you can trade decent amount over here. We are talking about in the first bar around your cape per minute So that's a big trade book map few things about over here So we always talk about book map visualization visualization platform That allows you to see the market dynamics and liquid in real time through heatmaps. Okay? There are also the tools the market pulls and other I would say add-ons tools are very sophisticated But also very easy to understand it can help you in Improving your I would say understanding of the market and they can support your strategies Today we use all of that or part of that but integrating these This with techniques of risk management So it's about combining the right tools as I read as I wrote over here with a disciplined approach to making form trading decisions Okay So Trader I hope that I Help you out today in in explaining some of the Major concept of risk management. There's more. There's not only about this Okay, so if you have any other questions Reads out that I'm very happy to to help you out me and Bruce and and hold the team over here You know like how do you Well just first off what comes to mind is how do you coach beginners? Because you know you want to build confidence as a beginner trader So do you you know I know in the past you would scale in and out of your trades Then do you recommend for them to? Calculate their risk, you know first off look for their edge then calculate their risk and then stick to their target and Just take just take that hit the single and move on to the next trade or do you say like look, you know You've got a good one. We're gonna scale out over time. We're gonna help pull for a runner You may scale in or add to it. How do you usually coach? So the first thing I would say is I like to have an interview with a trader and also understand his personality how was his trading up to now and What he likes to do so if he has more inclined like to a scalping way So like you know hit-and-run is the best decision if he's more instead inclined for day trading then an approach based on you know technical Precise targets and stop loss that we discuss I would say is the best Then it's about practicing and in the beginning There are like some tests to do so practicing both ways see where the trader can be more I would say Good at if he likes more to scale out in partials or more to get out the only one point personally I see that the majority of the traders they're more like skin out especially when it trading stocks in multiple I would say Percentage let's say a 25% 25% 25% 25% 25% percent or 30 30 30 30 30 40 So not in all in in one, but I see that they like one or two entries But again, there's always different traders. I have traders. They're doing like, you know Scaling in and skin out multiple times and that requires a little bit more. I would say practice Especially because whenever you do this you have constantly to monitor your average your size That you don't over trade and you're also the new oversized in your trades So it's something to evaluate together based also the stats that a trader brings because all the trading that now is 2024 and on is for me based on statistics So that's the most important thing looking at your journal Keeping your journal every day and looking at your performance. I see a lot of Twitter They are still not doing this and then they pretend to be We say profitable. No, you have to track everything traders. You have to track The trades that you're taking but not only the setups that your strategies delivering The profit factor your win rate the green red days When is the best time for your performance? Let's say between 9 and 10 10 11 so on. Oh, so Till what size you're comfortable to trade because a lot of traders are like very good to trade Let's say till a certain amount of size and then they have difficulties because emotions starts like kicking in So I would say there are a lot of aspects Take a journal and start like putting all the dot in Ah Bruce we have over here a question from Vlad. Hey, are you able to check PDD holding stock? It's not the place. It's up 5% today and just wondering what bookman may have picked up on it Yeah, of course So it makes me suspicious that Vlad is trying to pump stock in here, but Anyway, I don't know if you can if you can bring it up. Yeah PDD made a morning over here V pattern At this point and there's a ton of liquid over here between 119 and 121 So look at the order of flow over here From the open always made higher lows in our highs But also you can see that we have the majority of these dots Green only when we started getting at this point. We started life seeing some sellers and Over here huge amount of liquidity between 119 and 121 So no big sellers over here. Instead. They started to support of it to the price section. So book map in this case What I've told you buyers over here Supporting the bid supporting the bid supporting the bid and then instead once we've got over here We have seller stack seller stack more of a here wall of sellers So that is the reason why up here. We started seeing like this this pullback for now. It's not a reversal for now It's a pullback How do you deal with your trade management when especially in small Small caps these things happen very very quickly so You know, how do you recommend? traders like to You know deal with some of these quick moves and how to be unemotional with their trade management So first of all is I would say start with one trade at a time and one stock at a time I see especially beginners they want to do too much too soon So I see beginners. They're treating like four or five stock at the same time They're trying to manage too many position and then they end up like, you know Making errors being confused and it's normal because you still don't have like that Ability to cover so many stocks at the same time So one stock at a time and then take one position at a time like that is your only position and try to Like we said before Have your edge. So know your strategy good Track it to see how many times will work or not find the best seniors when it will work know where's your risk where's your target and Use order of flow to manage the position Then the second thing I would say is be very fast when you're treating small caps now Even if you can see Agba remember we were talking also before in the presentation Agba is a stock that is a small cap It's about the third day that is moving. It's fluctuates 30 40 percent up and down a day and Right now is moving slow. So you will tell me today. There's no problem over here. You know, I want to take a trade Let's say I want to place my Long over here. I'm getting get filled. I put my stop loss and everything Well, just know that small caps in about of a second They can wash all the way down fast or they can squeeze all the way up And that's the reason why it's not only about, you know, looking over here the order of flow but it's also having a good understanding of the Char patterns the price action that is doing like before we saw all those fake breakouts the gate and then fail so Knowing that those pattern exists tracking those patterns. You're gonna be able to understand how small caps work and Of course joined the community because you will learn so much and I guarantee you that And Okay, so For me it depends from a playbook Let's say this morning. Let's go on the example that we had over here on Tesla. So Tesla play Personally, I like one maximum two fills and then taking the The trails like in parcels So if the playbook that I'm training is an a-plus setup Then I will because that playbook setup is high win rate for me high return low risk Then I'm gonna take one full-size position If the playbook, let's say it's a B setup, then I will reduce my position and start with a starter When I'm training small caps generally will be one first started position if I take shorts and then adding the full-size and Also getting out in partially specific levels So before I was scalping much and I was trading a lot of volume. So the reason why when I was trading Italian market, I was Making a lot of commissions paying a lot of commission also making a lot of volume trading per month is because I was trading capital like 100 200k position every single time, but like 20 30 times in a day so very very Multiple multiple trades for even like only 30 seconds one minute two minutes So getting small persons of return, but multiple times now is different. I like to take, you know Breathe a little bit more. I'm older So I like to invest more time to teach and explain traders and followers like coaching them then to trade for myself So I prefer, you know, like when I say a good trade, I take the trade and manage the position and I share that Different way to do it. It's just like about how you feel also There are like traders who have a personality. They like to trade so much and I see in the room like in about one hour They can take 50 60 feels like in and out maybe only in two stocks scaling in scaling out multiple times Or there are traders who take one or two position for the day and they're done Both are good ways to do it. Just like, you know, what do you prefer and where you're more talented and We are more like I would say good at So then do your entries are based on Market orders No limit orders, but with hotkeys So I like to buy on the bid when it's possible. Let's say I'm looking to buy a support I will try to get filled over here On the heat map support and they're looking for a bounce if instead we have a momentum trade So I need to get in right away. Let's say like over here on this break. Then I'm gonna buy on the ask Generally the maximum offset. I'm gonna have on the ask is a plus 0.05 plus 0.10 if we're talking about stocks above 250 bucks When I'm trading small cap short, I like to shorten ask ideally So add liquidity even because with a lot of brokers, you can have rebates and that lowers the ECM fees that you might have but if you trade stuffs with the Short of ask you won't get filled For example stocks, they are doing like this like we're seeing before in the presentation You have to trade on the bid and you have to be very fast Especially that's the reason why I use hotkeys Otherwise you won't get a feel over here and you probably get a shady feel not even a feel and the price will go down Without you. So for me is limit orders because I like to keep my Good average market order sometimes can be a little bit too much of slippage And I don't want to get a bad feel so limit orders again You need to have a very fast connection fast broker being yourself pretty fast. So you have to I would say Improve your timing in the entries and that's way. That's why I suggest to traders to do a lot of retraiting Using replay book map then doing retraiting. Okay, so use the two things Together because it's a skill, right? It's like if you play video games the first time will be very slow You have to kill, you know, the The monster level the first ten times you wouldn't do it thirty next times You won't maybe the fifth time you will be able to do it And why because you became faster more skill more experience and now you know exactly what to do You have to know your set up extremely well and your edge and then Once you do your trade management But you have to be able to act immediately you have to be able to have patience Waiting for the setup waiting and waiting and then you have to act Yes, it's a it's a rare kind of combo Yes, true and sometimes you have to wait Bruce all day for that pattern and You feel like you know frustrated Because like patient patients and you know, I want to make money. Maybe you have like friends They made already like a good day and you did nothing because maybe your play was different Maybe because you missed it and you're getting patient and then maybe you know You took the setup that you shouldn't have taken the setup Because it was not part of your playbook But you know something convinced you or you try to see that something was not over there And that's the reason why you have to be very patient very disciplined having the risk management so good and It's it's hard. It's hard every day to be that perfect, you know, like we're normal. We human we doing errors And that's the reason why all we sale traders try to trade the more systematic with a clear process as possible and Use tools to help in this hop keys order of flow A trading system in terms of you know, like could be even like, you know, I'm only looking for under over the moon Looking for be what bounce, okay But strategies that you have that testing you trapped and you know that they work So if you don't do that, you don't have an edge and mark will simply like run you over Excellent. Excellent. It's really really great to see and hear like that your expertise on your trade management and order flow Together here the way you're using it. So it's a really great combo because like like you had said like You look at your candlestick charts. You look at your other charts. It's just blank. You don't know Where these where these levels are where the other traders are who's trapped who's getting stopped out, etc You won't be able to see those details Exactly it's like over here today. We were long at this point and Every single time we broke the heatman. We went up and then let's say We know the price section like we're saying before so we're talking about Higher lows our highs our lows our highs and then we form a high Then still a higher low But then at this point we form the first lower high and then the first lower low so this point we know there's a potential trend change and then we start rejecting the heat map and Then where is the target? Well? I would say right away I know there's a catalyst over here and over here. So at least I would wait to scale out at these levels Now maybe the stock will unwind 10 points more maybe goes to 130 I don't know that you know, I see only levels in the daily chart But at least I know exactly where it can start scaling out and over here. I can have an idea. Okay. How is reacting? Are we bouncing? Are we making now a new hard lower hard high or we're still creating lower highs and lower lows and unwinding? So that for me is the concept Being able to use the liquidity heat map like that and understanding your price structure within it Just key Exactly All right, is it any more questions Dan? Do you see any questions over on on discord? I'm sorry. I didn't see any here Really really nice presentation, Joseph, but you know, thank you so much. It was Long long time coming. We needed to cover this. So in fact, we may consider maybe You know, I'll reach out to you but consider now like You know some of the Training that you do pre-market Preparation you're filtering and then looking at the the setup in in bookmark When the market unfolds You know the open because I know that you've covered this many times in the past and it's so critical to your trading Especially with these small caps But that that again is not only the setup you're looking for but this preparation beforehand is just crucial For you, I imagine and would would love to I think Everyone would love to hear more from you on that. Okay. We can prepare a little bit Like another presentation on that that would be Think will be very helpful for for so many traders. I mean the the war is won in advance, right? So, let's see any last last pearl pearls of wisdom and things to Advice for for traders moving forward Yes, so Just this morning. I was personally asking Bruce Where I can check where I can look traders for, you know annoying more about the bookmark tools that that we have So go to bookmark.com over here and then click on Over here education. So we're going to put this bigger and So that you know, this is a You can see over here getting started. Okay, so there are like a lot of videos that are are very Explain authority, especially What's the ones on trading over here? And then if you go back on bookmark learnings You can see the at ons so one of the major Feature over here that I was looking this morning was the market pools. So take a look at that It's very very useful and really I think there's so much to cover on that And then also the live streaming events. So you can see also over here the live streaming events that we have for The following week. So you can see everybody that is going to be on today This is still on the construction. So it will be even made better But you know, you can simply start looking every single day who's on and this is a very very good tool Yeah, excellent. Thank you, Joseph Yeah, and if you guys are interested in more from joseph, he's on every wednesday at 9 a.m. east coast time and you know, he offers many different Levels of service for coaching and mentoring and community. So You can always reach out to joseph At the what's the link joseph? Uh j trader dot co So I'll put that into the chat there And uh, yeah And then also you're having an event in New York City here. So Looking forward to meeting up with you and going through You know some of your Mentorship in the in the big apple here. Yes will be in september traders. So you still have like some time to sign up The class is already getting full We're gonna have a three days live trading together We're gonna use book map is gonna be small caps large caps and options We're also gonna go one day all to the new york stock exchange with So great partners including book map. So looking to see over there more information reach out at j trader dot co Thank you very much guys. Thank you book map Have a good one