 Hey X-Traders, and Happy New Year, welcome to 2023, and let's kick things off by looking at some practical tips in your everyday day trading. Let's take a look at a very simple topic yet extremely important, which is when you are taking a trade, and I don't know if you use this trade tool, so it's a trading view feature, so trading view is free unless you get the paid plan, and so you have these long and short position trade tools, and I should not, I'll leave it. So what you do is, let's say you've already got your levels identified, so it bounces off the support, bounces off the support again, you figure okay, this is obviously a good support, so what I'll do here, let's imagine this isn't here, so you come over here to your short position, because you're going to go short, because what are you expecting, you're expecting this to, it was tested once, tested twice, and if it's tested a third time and it breaks, then it's probably going to go down, so you just click on that, and because it's a short position it gives you the red to the top, which is going to be your stop-loss level, and it gives you the target to the bottom in green, alright, so what do you do, alright, well this is the level that has been identified, this is the one that you identified as possible support to be broken, so bounce once, bounce twice, test the third time, if it breaks it's going to go down, remember you don't know anything over here, so what you're probably looking at is this level right here, you know, let's just adjust this, okay, that is probably going to be your next support level, okay, so you would adjust your target tool to that support level right there, and you would obviously adjust your stop-loss, now this is where the whole risk and reward, you know, risk and reward slash risk management, you know, kind of thing comes in, you, you know, it gives you your risk-reward ratio right here, it's 1.11, so okay, fine, so it's like 1, alright, so do you want a risk, 1 to make 1, you know, that might sound fine, some people probably want to take advantage of a bigger reward and a smaller loss, you know, or risk, so you would look, and I remember we're at around this level here, we don't know what's going to happen, so let's actually shift this over, alright, so the market is about to open here on this day, so you're thinking, alright, well if this thing breaks below this level, it's definitely going to go to at least this level, more than like it's going to go to that next, you know, I use the 2 pixel line as a larger time frame support, the dotted ones are inside the daily, and the thicker the line, so you know, a 2 pixel line versus a 1 pixel line means that it's coming from a much farther point in time, so it's probably more important, so what we want to do is, okay, if it breaks this level, so what are the levels above this level, okay, that we can currently see, you know, given this scenario here, it's okay, that this might go over and hit, you know, some sort of resistance, alright, so it looks like we have something here, now if you can follow my line here, there's a wick right there, so there's probably, that's on the 15 minute, there seems to be some bouncing around this area right there, another couple of wicks here, which seems to have bounced off of that level, and so is this one, and some goofing around going on here after hours as well as pre-market, alright, so this actually, you know, it doesn't look like too bad a level, so let's go ahead and say, okay, I want to be a little bit more conservative, right now it's 1.4, alright, so let's bring this down a little bit, to something more in that range, alright, and that gives us 2.16, alright, so the whole idea is you want to be able to take advantage of a large reward and a small risk, alright, so what is it that you're saying here, while you're saying that your risk is going to be smaller than your reward, now why is this so important, why did I want to bring this point up, is because a lot of times we will get out of a trade early, you know, let's say somewhere in here, let's say, you know, let's say that this level was actually down here, okay, now look at that, the risk reward just went up to 3.2, alright, and what we're saying is that we're basically making, you know, three times as much, we could make three times as much as we are risking, the thing is once you set this trade plan in motion, you want to make sure that you get enough reward for what you have already risked, alright, now what does that mean, that means that if this thing, look at how price action breaks into here, okay, and let me get out of here so I can, yeah, there, okay, then it goes to, you know, whatever this 379, maybe something like that, and then let's say that you get into this trade, let's actually switch over to the five minute to get a closer look at that, alright, so there it is, here it is, okay, so at this point in time it breaks and it closes below your entry level, so let's say that you get in right around here, okay, this thing comes down, okay, and it hits this level, which you have marked on your chart, and it starts to go back up, now at this point what have you made, so let's take a look, at that point if you mark it there, you've made 1.7, alright, that's your reward given the risk level, given by the stop loss that you have chosen, now that might seem fine if you want to get out, okay, but remember if your original plan was down here, you know, where it was 2.6, then you want to wait for this thing to go lower, so that it actually, if let's say that 2 is your threshold for risk reward, then you want to make sure that you at least reach your reward, because you've already risked this, alright, what happens is if you start getting out of your trades too early, then what's going to happen is you've already risked, you know, this much, if you get out of this trade here just because it bounced and started going back up, well then at this level your risk and reward is actually 1, okay, so you haven't gotten your full reward based on the risk that you have already taken, so it's very important to, if you map out these these trade plans using this tool, it's very important that you follow your trade plan to completion, because that is when you will get your full risk to reward, okay, or your 2.6 reward, okay, because you're risking this, no matter what happens down here, you're risking this amount, so you better make sure that you're risking it for a big enough reward, because if you cut out here, you know, or, you know, it hits down here and you end up, you exit here, then you either missed your exit, which you shouldn't have, because at this point if that is your exit, if that is your target, then you should be scaling out of your trades, you should, if let's say that you took two contracts on this, you should have gotten out here, you know, and possibly left a runner to here, you should not be holding on to both contracts if you're hitting here, if you've already cleared two of your targets, you know, then you're not following your trade plan, at least not efficiently, not professionally, you should get out of, at least one of your two contracts when you reach your first target, and you should get out of your runner, or maybe if you had three, you could get out of a second one once you reach your second target, and anything that you haven't labeled, just because you didn't, you know, you didn't eye it anywhere in the chart, then you should consider it a runner, and you should have exited here, there's no reason for you to be holding on to any contracts back up here, all right, but the point is, and I want to make sure that this is clear enough, we want to make sure that if this is our trade plan, we've already risked, the minute we get into this trade, this area is at risk, okay, so if you're gonna cut a loss somewhere up here, just because you saw a green candle coming back up, then look at what you've done, okay, you've completely changed your trade plan, you were, you decided to get into this trade because the reward was quite large, okay, and the risk has not changed, so this means that now, even though you risk this, because you risk it the minute you get into this trade, then your reward has shrunk quite a bit, all right, and you're not, this means that you're not looking at enough levels, that you're not looking at enough price action to give you a clearer picture of a more profitable trade that you want to get into, because again, if you do a two to one risk reward, and you take three of these trades, and you only make, let's say that you lose one of them, all right, so you lose one, this goes, you know, against you, and then the next one you only make, I don't know, you know, 20%, 30%, then this area here is gonna be so much larger than two of these green areas, all right, so you lost one red area, all right, and you profited one green area, or two green areas, because you profited on two of your three trades, but because you did not follow the trade plan properly, because you didn't set up your risk reward properly, you ended up losing more than, sorry, here, you ended up losing more than you ended up winning, even though you won two times out of three, all right, so just make sure that when you put these trade, use this tool, this is a very handy tool, make sure that when you follow this, that you, sorry, that when you set this up, that you actually follow it to completion, all right, and the other thing, just because we are actually doing quite well with time, which I usually don't do, the other thing that I wanted to make sure that I covered is this, this is a three, let me see, this is on the five minute, let me go back to the, let me see the daily, no, not the daily, let's go to the one hour, okay, that's a lot better, all right, now look at this, I'm looking at this one here, I'm not looking at, let me actually erase this as well, I'll put that back in later, okay, so this has basically rocketed from 370 something to 380 something, all right, so this is looking like it is over extended, if you zoom out, you will see that there is this down trending line up here, up above, where it might hit and start to reverse, okay, and now look at this, if we set up this trade tool for short position, the risk-reward ratio here is 351, okay, that means it's quite a large ratio, I mean it's, you know, you're risking one to make three or so, right, three and a half or so, okay, so that's actually quite good, but it is also on a one-hour time frame, okay, so when you go down to the 15 minute, if you take a look at this, and this happened to me today, I actually got out of this trade, okay, this is where I go in at 383, all right, and the stop loss was 38389, right up here, okay, as you can see, that's where you can see that level on that trade tool, now if I go down to the 15 minute or the five minute, let me see if I can zoom in here, okay, then again, this is a good 351 risk-reward, okay, but I set this up looking at my one hour or even my daily, all right, that's a much larger time frame, okay, so what does that mean? It's important to keep time frames in mind, because if you set up this tool looking at the one hour or even the four hour daily time frames, then you are expecting this thing to reach your target on a one or four hour or daily price chart, okay, it's gonna do a lot of different things in between, so if you zoom in to the five minute, then you're gonna see that I got into this trade, I'm not sure if this is the exact time, but let's say that that's the time that I got it, which is about half the trade, halfway through the trading day, look at how high this thing went, okay, and that was, if this was five minute, which it is, that's one, two, three, four, five, six, seven, eight, nine, ten, eleven, twelve, let's say that's like 14 candles, let's say it's 10 candles just for the easy math, so that's 15 minutes, that's about an hour, 15 maybe an hour and a half worth of trading day here, right here, okay, so this went against me and it actually popped up above my stop loss level right there, okay, you can see it, it closed above and then it started going back down and it still closed above, all right, so this, I think this is where I actually got out of the trade, okay, I got out for a small loss because I was following my trade plan, that's a good thing, don't misinterpret what I'm saying, but what I'm also trying to add to that is that you might get stopped out if you looked at this and developed this 3.51 trade plan on a daily or an hourly chart and then you followed it up on a five minute, because on the five minute it's going to do a lot of this, all right, but eventually it's going to come tumbling down as it did, right, so I would have actually profited on this trade if I would have waited till the last minute down here, all right, because I looked at it on an hourly timeframe and here these 15 candles, when you're in the trade, you know, you start to worry, you start to get anxious, you're saying to yourself, this thing is going completely against me, all right, but if you look at it, let's just zoom out into the 15 minute, okay, this is where I got in, all right, then it's only four candles out of which, you see, one, two, three are green and the third one is not even that convincing because it's got a wick to the upside, not to mention the first one, and then the third one is the fourth one is red and it's definitely negative, it's definitely bearish, okay, so if you zoom out even more on the one hour timeframe, let me see if I can zoom out properly, all right, on the one hour, which is where I was looking at this, look at that, this is where I took the trade, after that trade, everything went red, red, red, okay, so it's important to keep in mind the time frames that you are looking at, if you draw, if you look or spot a pattern on a one hour or four hour, then make sure that you follow up using the one hour or the four hour or the daily, but don't go down because if you go down, then the five minute is going to tell you a completely different story, the five minute is going to say to you, you know, whoops, look at how much this thing went up, we can measure it against you ever since you got in, so if you get in right here, this thing went as high as, let's say as high as that, that's 84 cents, okay, against you, which might not seem like much now, but when you're trading, that's a lot of money, I believe I got out of this trade at about $25 or $30 of loss, okay, that's what accumulated through here, but my mistake was I looked at this and I set this thing up on the one hour and then I came and I started following it every five minutes, rookie mistake, it should not have happened, but it did and it happens and I'm sure it's going to happen again, so it's also a good idea to keep revisiting those errors and basically review your own trades whether they went south or not, I am in another one, by the way, which was also an alert on today's, on today's analyst alerts, which was the Netflix, I believe I didn't, yeah, I don't think I have the trade tool on here, I used it on a different account, but I believe I got into this trade somewhere around here, I want to say, I want to say, I can't believe this is the five minute, yeah, it should be here, but it's not for some reason, okay, so looking back at this, this is probably what the plan probably was, okay, and again, this is on the five minute, I shouldn't be doing this on the five minute, so there, now let's go back, let's look at this on the one hour, see what that looks like, okay, well actually here's the daily, the daily was, this is, the idea was, well this is, it hit the bottom of this trending channel, of this trading channel, it went up and it had a big wick today from the top down, so, and this is, you know, you got a good resistance here that has built up, you can see the volume profile back there, so the trade was valid for me, so I'm expecting this thing to go back down, the market also had a rally today, so I would honestly expect it to go back down at the end of the week, which is also the last trading day of the year, so if you go down into this one hour, okay, then you can start to see, okay, yeah, this thing, you know, there's a trend line from here to here, this thing is trending downwards and it just had a reversal right here, rally, base, drop, you know, you would expect this thing to keep going down, if you go into the 30 minute, I don't like, let's go into the 15 minute, all right, and this is what this trade is doing, all right, and I would definitely expect this trade tomorrow to, to fulfill, it's 6.36, all right, but again, I'm not going to be following this every 15 minute, although it does expire tomorrow, so, but I might follow it like every hour, all right, and this is what I'm going to be looking at, look at that long wick up here, okay, which is right off of that point of control line, the purple line, this thing should be heading south tomorrow, so this is what I'm going, this is the timeframe that I'm going to be looking at, so just wanted to review those concepts real quick with you guys, don't forget to subscribe to our channel to stay notified of all the videos and other educational information that we put out in the Xtrades Discord community for you guys, and also don't forget to drop any comments if you have any questions on what I covered today, and I'll see you in the next one, have a great one.