 What's up everyone? My name is Alex. I'm one of the co-founders of MyInvestingClub.com and I want to let you guys know about something special we're doing for our viewers on YouTube. So the most common question we get asked is, you know, how do I start day trading? So what me and my mentor about is we create a free two-hour mentorship course for the brand new trader. It's going to be available at MyInvestingClub.co. The link is going to be right here. This is a free webinar that reveals our 12 secrets that every single brand new day trader should know before they start. I also want to let you guys know about something that's very unique to MIC. So if you have any questions about trading or you're curious about trading or you don't know if MIC is the right fit for you, now you can text our head mentor, Tosh, whose number is going to be right here and he'll answer all the questions that you have in less than 24 hours. Thank you and enjoy the video. Ladies and gentlemen, children of all ages, it is May 19, 2020 and we're here for another episode of Large Gaps. All right, so let's talk about the old market today and if some of you are not caught up to speed yet on what's happening in the old market, we've been running mainly on the old Marna, Marna mRNA, which got smoked today to say the least and I don't know why I didn't have this on first red day watch. To be honest with you, I just totally don't give a shit about this company. I just don't care about this company. In my mind, I keep looking at this and I'm like, okay, it's 18 bucks, 18 bucks to 87. It just seems like a little much, a little too far, but that's what can happen in these times. Granted, now there's really like no reason for them to even stick around because of the news that happened, which was the whole cause of the market tank. Apparently every time a company gets some kind of, now this is the market that we're in. Every time a company gets some kind of funding of some type from the government, it pumps the overall market when it has to do with coronavirus, when it's a vaccine or whatever it is. Oh, this company has got a potential vaccine and then everything's like, yay, we're reopening. And then yet again, it's another let down, which I think that's one of the only things that the WHO was truthful about was the fact that we're not going to have a vaccine for at least 12 months. Okay. Again, I'm not going to get all political and why I think the WHO was full of shit in all of this, but they said themselves, we're not going to have a vaccine for 12 months. When does the 12 months start is my question. Yeah, we got hydrochloroquine, yeah, whatever it is. They're just doing butt funnels like it's college again. Yeah, exactly, Sean, yeah, if we go down that route, but this webinar is going to be three hours long and I'm going to try to keep it to an hour today because these two hour webinars are just exhausting and I think they're exhausting to watch. Let's start cooking. MRNA had bad news. So MRNA is back on scan now, back on scan. Now that the news is out, the market is reacted. Now it's back on watch. So now we start to look at our levels, right? We start to look back and we start saying, okay, well now what do we got from here? MRNA, the news is out, the market reacted. Okay, what's the next step? 65 becomes a big potential line. 65, 80 from there. Now we're going to fill this gap when we get below 70. So obviously 70 is going to be aligned tomorrow. So 65, 70 and 80, those are going to be key levels for tomorrow. We can go ahead and save it. And now if we open up my trusty handy dandy notebook. So before we react and make a plan on this, we got to know what's going on tomorrow. Okay, so that's what a lot of people ask me always. They ask me, let's go over, watch this. What are we doing for tomorrow? And I'm like, well, I really don't know until we get to the pre-market. To be honest with you, pre-market dictates what I trade that day. Yes, there it is. The real guy, the real dude, what was his name, Steve? Or was it Joe? Who was the good one? I think Steve was the original. And then it was like, they like, yeah, Steve, yeah. And then, and then they switched over to Joe and I was like, okay, Joe, you suck. You're bringing a bad name to all of us Joe's out there. You're the worst blues clues person in the world. Anyway, so 65 becomes a big line. So tomorrow, if we open under 65, 6450 to 65 should bring us a lot of resistance potential granted, granted. It's going to be a pretty wide scale zone. So it depends on where it opens. So this is going to be a bit of a recap. And I'm just going to clear up some things as far as process goes. Whenever we open, let's say we open tomorrow at 6430, right? That's not far enough away from this line for me to really have a lot of faith in it just based on my own personal experience with how I plot my lines. Okay, you could play a line much closer if you want to. You can play a lot, you can stare at the tape and know when they're going to sell and what they're going to do when the buying comes in and when the selling comes in and hotkey, hotkey, hotkey, give me a, give me a, give me a. Dude, that's not me. I'm just going to be a hundred percent when it is not me. I just don't care about that. That's too much stress. That's too much focus. I prefer just coming into the market, already have my lines, just wait for those levels and I don't even need to look at the tape. I don't even need to look at a timeframe. That's daily chart. Okay, cool. Daily chart, level one, level two, that's all I need. It's all I need to see. As long as I know my pivot points, I don't really need anything else. I know my pivots. I know my lines. We're good. So Myrna, Moderna, the company. So tomorrow if we open under 65, yeah, I'm highly interested in a short on this seven because of how far we came in such a short period of time. Okay. Over the span of, you know, three months, nearly, we've literally almost tripled Steve left because of male pattern balding. I'm sure they could have gotten a wig. So yeah, MRNA is going to be all watched tomorrow. And that's related to the market. All right. All right. So I want to explain the difference between expected value and risk reward. Okay. Most people always say, oh, I'm only been taught to take a trade. If it's two to one, three to one, four to one, right? Those are the good opportunities. Okay. But every day is not a good risk reward situation. Great risk reward trades are few and far between. Knowing when to act on those is what makes people like Alex so great at what they do is he knows the difference between just scalping with small size until a great risk reward opportunity comes along and then he puts the money on the table. So the problem is that most people will approach it with like it's the same. Right. If you ask somebody, well, what, how much money would you risk on a first red day or a death line or a first bounce or first screen day or fucking whatever your bread and butter is, whatever you are most comfortable trading. Most people would be like, if somebody trading decent size, they would be like, well, I'm going to risk a thousand bucks on that trade. Okay. And then if you ask them all of a sudden on their worst on their red days, what is their average red day? Chances are, chances are it's probably going to be the same as that thousand bucks, which is wrong. Okay. So people are in between the good risk reward opportunities are scalping with too much size because they keep, they have this number in their mind that they have to make. And so if you put it in relation in terms of like a percentage, okay. Somebody like Alex in a good risk reward situation, he's going to make probably 40, 50 grand on it, right. And then other days, he's going to make a thousand, 2000, 3000 bucks. Sometimes maybe a little bit less and that's it. So what is that in terms of percentages? Somebody that makes 40 grand in a big ass trade that makes on average, let's, let's round it up to like, it's probably like 2,500 bucks, right. 2,500 bucks divided by 40 grand makes 6% of his biggest days on average. Every single day thereafter, right. And so if your max loss on a first red day setup is a thousand bucks, what are you going to make in between in all of those little scalping days? Right. What are you going to make in between 60 bucks? That's you. The 60 bucks is not a lot of money. Yeah. Okay. Well, I agree. I fucking agree. But guess what? Making 60 fucking dollars for 90 days straight and then all of a sudden getting the chance to hit it hard and make a G in a single day. There you go. That's the difference between recognizing consistency builds the ability to take bigger risk when the risk reward is there. It's not just one thing. I'm not just like every single trade has to be greater than two to one. Every single trade has to be greater than three to one. Every single trade has to be four to one. No, no, no fucking no. So I'm going to prove it with math. Okay. For you non-believers prove it. I want you to answer me a question. What is the most profitable strategy? First is a strategy that wins 90% of the time, but makes the same as it loses. Okay. So it's a one to one risk reward, right? It makes a hundred. It loses a hundred. It wins 90% of the time. Okay. The second strategy has a 70% win rate. It wins 70% of the time. So roughly three out of four and it has a two to one payoff. Your wins are twice as big as your losers and you win roughly three out of four times. Which is the more profitable strategy? All right. So let's prove it with math here. All right. So a strategy that wins 90% of the time and only loses 10% of the time and makes a hundred bucks a trade, but also loses a hundred bucks a trade on average is going to make $80 every single time it makes a trade, including its losses. Okay. And in the same scenario, something that's 75 and 200, 125 now. Okay. So number two is the more profitable strategy in the end. It is the more profitable strategy. 75% and two to one ratio is very hard to achieve. And it doesn't happen very often. Thank you so much for watching our video. If you want to see more of our videos, please subscribe to our YouTube channel by clicking the button here. We do our best to post a new video every single day. If you have any questions about MIC or any general trading questions, please text Tosh using the number here. Also, stay up to date by watching some of our most recent videos right over here.