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Ep 60: Risk Management and Money Management in the Stock Market

Welcome to the Rapid Recap, I’m Sasha Evdakov, It is November 5th 2015. Thank you for joining me this week and if you haven’t seen the Rapid Recap it’s really about teaching or giving you some insight to a lesson in which case you can later apply to the market.

It’s not just about stock picks it’s about getting better improving and just evolving your trading. This week’s discussion is all about risk management and money management in the stock market and I’m doing this recap of this topic really because one of you asked for it so Marcello was the one that asked for it in one of the comments love to do a topic discussion.

Now in this topic of discussion just because of the limited amount of time, I’m really going to concentrate and focus on one risk management topic and just give you an idea. It’s just to give you a concept because I could probably go into multiple hours on this topic.

I could probably do a whole course on this whole subject matter but the point is to give you some insight, to you to think about risk management, to get you to think about money management in the stock market.

That way you can take that little concept that seed and continue to evolve it to make it your own, to continue to grow it into something new and to something different and something that works for you.

That’s really what my goal is today because I just won’t be able to cover all kinds of different topics and strategy so my focus is going to really just simplify things, to simplify things for the masses.

Also just to give you some insight of how this business really works, and of how you can reduce your risk and how you can manage that risk and manage your money in the market so that’s what we’re really going to focus and talk about.

Let’s get into the groove, let’s get going and first let’s cover a few stocks, a few discussions on some stocks that are moving acting behaving and some of the trades that I’ve been in and then we’ll get into this risk management.

Let’s get into the groove and for me personally I like to listen to some music actually when I do these recaps, it’s actually on my headphones and we just go ahead and speak and flow and go with the groove so whatever it is they gets you in the flow let’s get going.

First things first let’s talk about Amazon and Amazon was a huge win for us this week in terms of trading in terms of investing, in terms of retirement accounts for all the different spread strategies, shares that we’ve purchased.

Looking at this stock there’s a handful of opportunities that you have but take a look at the weeklies we’ve been doing a stair-step pattern here and the stair-step patter really worked out really well.

Now typically I don’t trade during earnings so we do get out before earnings and her notice all the different opportunities, now of course you wouldn’t catch all these runs if you don’t trade earnings because you’re reducing your risk which is going to be the key in this week’s discussion.

Looking at it if we zoom in on the hourly just to see what happened, our earnings basically happened right here on this twenty third time frame so this was where the earnings where the stock popped up and then slowly we had a slight little sell off .

We had a slight little sell-off to this area right here. Now your initial point was to really use this line, give it time to digest and use this line as a stop because here we have a large gap.

If that stock got back in here that range could have been a huge risk so you want to be mindful that this 20-30 point bounce you didn’t lose out on so you would use that as a stop if the stock gapped up.

Typically in earnings look at what happens that stock opens high, sells back off and then continues to move and this you know for this type of stock or this type of earnings this is how it behave and sometimes you need to give it one or two days or learn to read how these move before taking a position.

Now in this case it tended to work out really well so what we wanted to do was get into the stock right here at the lows because this was our first point, our second point was right here. You can get into the lows and get let’s say 100 shares to make things simple and for conversational sake.

Let’s say you got a hundred shares as that stock continues to approach these areas you could take off 50 shares so you reduced your risk 50 shares and then as the stock powers higher or breaks this, this kind of confirms your move so you just let those 50 shares ride comes back, stock potentially bounces.

You could add back another 50 shares so this could be another potential opportunity to add or what you could have done is taken these highs right here and then added those 50 shares right here. So this could have been your adding opportunity for those 50 shares.

You continue this process in a stair step approach and this is just a thirty minute to give you an idea. This would be for a very active person or a very active trader. If you weren’t as active the way that you could have done it or the way that you could have approached, it was simply to nibble.

Let’s just say you got your 100 shares right here, you got into that stock right there allow it continued to run and somewhere around this region you take off 50 shares so now you have 50 shares remaining and you let the rest ride and you continue moving your stop higher as that stock continues to move up.

That was another way to do it but Amazon here was acting and behaving just moving really well and you can see here this is the daily and this is the break and from that breaking point even if you entered a little bit late you basically had a 40 point gain in just a week here pretty much a week and a half time frame.

Tesla, also had earnings here we had a nice pop but looking here it has a lot of week overhead supplies so if you’re going to get into this one just you know nibble a little bit then watch it closely because it’s a little overextended especially as you start looking at this monthly chart.

You can see that we’ve been consolidating kind of sideways here on this chart but nevertheless it’s a powerful company. So just watch it closely how it acts and behaves. Just be patient wait for the right setups.

Facebook also had earnings popped but this one didn’t move like Amazon. So if you look at it here we had a pop slight little moved to the upside and then after this move to the upside it went back into the gap so your point right here went back into the gap, made a little bit of a low here then came back got over this line right here.

Then we kind of hanged around right there in this level, bouncing at these points. Now with this stock this is looking at it really on the 10 minute short time frame so that’s a short time frame. So do you need to get it right this second?

No you don’t but looking at it on a weekly you can see that this stock on a weekly is moving, acting and behaving just the way it should.

There was your entry point, here is another entry point. The volume right here we’re on the weekly we still have one day to go so it’ll probably get to about 165 to 175 we’ll see how things move but here looking at this one you know you had a few opportunities this was a little bit of a bad sign right here because we came into the lows with that major sell-off.

This is one of the reasons why you always want to peel shares off in the strength because you never know when these things happen. You don’t know when these stocks are going to pull back on major volume and when they pull back, they pull back hard. They don’t pull back soft they pull back hard.

GoPro take a look, see what happens and these companies when they start selling off they continue moving lower and with GoPro there’s a lot of hype that went into this company you know great cameras.

I talked about it because really the main shorting point for this company was right around this level right here there’s a lot of opportunities you could have shorted it here by now the stock is already starting to level off just because that short run is coming to a close slowly.

Meaning that short run is extended to the downside so the remaining move is not as much as it could be or the potential is a lot less.

The reason I say that is because some of these companies I mean they’ll continue to move like Groupon. Even though this one is at 22 – 25 and it’s a popular website but some of these companies I mean look at them even though they’re popular that doesn’t mean the stock prices are great investment or the big guys want it.

This one’s at $3 and when you look at GoPro, I’m comparing Apples to Oranges here but when you look at it I mean this one was also at ninety five dollars and now it’s back at $24. So don’t get wrapped into the hype of what people are saying. Trade the trade but don’t trade the market.

Even though the market if we look at today’s market it was down about a point here or the SPIDERS here when we look at it just a tenth of a percent really wasn’t moving but when you look at some of the companies, amazon here is up basically $15 and this wasn’t even on earnings play.

Taking a look at Apple here here’s Apple its struggling to get over this one price level right here and this is really what’s causing it to some trouble but if it gets over that on volume this would be the entry point.

Here’s the thing about risk management and money management, we basically cleared it a couple days ago and then we dropped back out under it today so for me the way I look at it is that was a loss. So you get in it stock comes back a little bit higher, start selling off not continuing, no follow-through sometimes you hear me talking about second day follow-through.

If there’s no follow through of the second day, it’s acting weak then what happens, well that stock’s rolling back over and you’re out that means you might go into it a second time here or a third time.

It may take you three or five or seven times until that stock breaks out but you know you’re waiting patiently and you might be getting stopped out multiple times until that trade is profitable and that’s just part of the business, its called risk management money and management.

Being patient that’s what this business is really all about. So we’ll get into that here in a second Hawaiian Holdings here this one’s been breaking out really well. So here’s the descending trend line moving acting behaving exactly as it should.

It was in that critical charts so looks good, definitely take profits into strength.

Here Priceline same thing here as we look at this resistance line, entry point was right here at around the $1400 range. Stock’s holding up, good 60 point gain even though today were down six dollars.

Remember for these big stocks $6 little retracement or pause you know that’s even a twenty-point little pullback on a $1,500 stock is not a huge deal If it was $100 stock and you had $5 retracement that’s pretty big.

McDonald’s we talked about a few weeks back still holding up well and when a stock’s holding it up especially after popping higher for one of these kinds of companies kind of one of the more stable companies that’s a good sign because not selling off, it’s not selling off huge.

It’s holding up well and just use these lines as a stop or if you want to give it a little more room right here, if you got in on the break lucky you but those were earnings so probably chances are you just either got lucky.

If you got in after the earnings then you might want to use that 109.82 as your stop or even the lows of that day of 1022 and that would be the 108 about eight so 108 price levels so be mindful.

IBM continues to move lower just as we talked about the stock has just continues to move lower 122 would be a good price point for it to get to we’ll see if it gets there but continues to move lower just like CMG even though we had a slight little pop today of a dollar forty six I mean since this break here we’ve basically went down about 92 point.

Those are the stocks I wanted to briefly touch on so let’s talk about risk management and money management in the stock market mostly let’s talk about risk management.

I’ll give you what I can give you here in the next 10 – 15 – 20 minutes and just talk about some concept about risk management because I know this business is really all about risk management in the end.

It’s about money management, it’s about being disciplined there are a lot of factors it’s about the probabilities and you can be very number oriented about this business or you could be a little bit more spiritual about it.

You could be a little more emotional intuitive about it whatever method you choose is up to you but you still have to manage your risk, you have to understand how stocks act and behave and what’s possible. So using a simple example, let’s just take CMG for the time being just because we have it up right here.

Just using this stock as an example if you’re driving a car and let’s just take this run for example, if you’re driving a car and you’re driving it fairly normal at normal speeds then you’re making progress and you’re moving ok and you’re getting to your destination but as you start accelerating really fast and s you start moving very quickly eventually something’s going to happen.

It’s kind of like those motorcycle riders that ride on one wheel on the highway going eighty or a hundred miles an hour. So as you’re going really fast something may happen with time. If you do that long enough eventually something is going to happen either your tire blows out, somebody emerges into you.

Just whatever it is you get tired, you slipped, the wind catches something’s going to happen and then you have to slow down or you fall and you know the worst case scenario I mean you could die.

There’s a lot of danger behind it and this is where a lot of emotions happen in the stock market is right there at this point because we have this very happy moment of driving going, getting to our destination quicker making more money and then weakness comes in and we sell off and this is where all the trouble happens.

Most people don’t understand this because they assume or think that stock is going to continue moving higher but that’s it’s always the case, the stocks don’t move in a straight line, they pull back or they retrace and that’s healthy and then they’ll continue moving and then again they’ll sell-off and retrace.

So because you have this wave pattern and you understand that now they don’t move in a perfectly straight line, you need to be taking money off the table so there’s a few different ways to do that.

I’m just going to share with you one of the easiest ways that I can get the point across and then you can slowly modify it.

Of course as you get more advanced and you have multiple trades going you have options going there’s a lot of different ways to hedge, hedge meaning protect your risk, so protect your money, protect your account, so you can hedge it with puts, you can hedge it with option spreads, you can hedge it with other investments.

There are a lot of other ways to do it but I want to share with you the one of the simplest and easiest way. Let’s just take the run of 624 to 724 for conversational sake. Let’s say the stock moves from 624 to 725.

Let’s say 625 – 725, there we go. So in this example you can see that stock right here. So this is the one we’re going to be discussing just for the time being and in this case, this stock is moving and moving to the upside.

Let’s just say you got in at 625 and you purchased 100 shares so that was your investment that was your trade you got into it with a hundred shares. Now you’re in the trade and now if that stock goes up $1 you make $100.

If that stock goes up $5 you make $500 so in simplicity sake every time that stock goes up you’re making a huge profit, you’re making a one-to-one kind of profit because for every dollar that the stock goes up you’re getting $100, for a $5 you’re getting $500.

If you’re looking to protect your investment, you need to be constantly doing one of two things or both things. You need to constantly raise your stop and people talk about this why don’t I just continue to raise my stop as that stock continues to move I’ll continue to raise my stop and then if that stock hits it at this point I would be out.

This would be my out point because I’m continuing to raise my stop. Now in this situation this would be a great way to manage your risk because what you’re doing is you continued to move, move, and move and here in this situation we have a hundred-point gain or let’s say 122.

Here we have a hundred and twenty two-point gain and we have 100 shares so with this would bring me to 12,200, so 12,200 dollars so that would be my profit right here on that investment. Hundred and twenty two-point gain, hundred shares that’s what I have $12,000 gain.

Then the minute it hits this point I would be out. So right here I would be out. This would be the typical area or the typical mindset of most people is that they’ll continue raising that stop and that’s a great way to think about it because you’re constantly moving your stop point or exit point.

Now unfortunately this isn’t the best risk management and the reason I say that is because you’re still fully invested and anything can really happen in the market you can get major sell-off, your emotion start to take place.

The better approach the way that I like to get people started into thinking about risk management is to always peel some shares off. So if your stock continues to let’s just talk about it from here, if you were doing the same kind of concept from this level right here so we’re going to talk about from this level.

Let’s say you got into the stock here and you got in it right around this point, for whatever reason so here that stock continues to move and you have a stop but that stop is already down here and your entry point might be over here so you’re almost at breaking even.

Here’s where things become a huge problem is when you start moving, let’s take this move. As you start moving in this range and you start moving your stop up-and-up there’s certain times where you get a major one day drop like this one or like this one.

You get these major drops all in one single day and you’re saying well that’s CMG its big, it moves fast but there’s a lot of companies that do this and it could be for whatever reason. I mean you take Facebook which doesn’t move as big as CMG.

Here look at these drops, look at these drops right here. Let’s take Alibaba, I could pick any stock any stock it doesn’t matter they all have major drop. If you take a look at the longer term right here this is where everybody here was all excited about this company.

Then look at this major drop right here and the problem is we get too emotional as if we got into the stock right here, we get into the stock right here and then that stock starts rolling over and then we start looking at and saying well at least we’re still even and then the stock drops and then you’re still holding onto.

Well it can probably get back up here, it can probably get back up here but then it rolls over and we continue moving lower. So that’s what happens with stocks and then you’re underwater on a major position or you start adding to it and you’re doubling your shares into it.

That’s really where the problem lies so instead the better approach is to peel some shares off meaning you take some profits into strength.

Let’s just use Alibaba as an example since we’re here. So let’s just take again our 100 shares of Alibaba and we have 100 shares. So we purchased it for conversational sake let’s just say sixty dollars over here at this level so by 60 dollars.

Now as we start moving up so let’s take a look at this as we’re moving up so here this stock moved up let’s say six or seven points, seven points so on seven points, seven-point gain on a hundred shares you make $700.

Again, 7 points, 100 shares that’s 700 dollars in profit so what you can do is taking half off. So after you get those seven points you take half off. So out of those hundred shares you take 50 shares off so taking profits you take 50 shares of profit and this would be your seven points that you gain.

You profit amount now seven times five is 35, so 350 and so your profit now is $350 from that 50 shares so that’s your profit. Now you have 50 shares remaining so you still have fifty shares remaining that you can allow that stock to continue to run.

With those 50 shares now remaining you let that stock and you continue to allow it to run so now you have another 14 points, 15 points so let’s first simple sake let’s say 12 points so you get twelve points gain so twelve times fifty so take out a calculator here twelve times fifty you get 600.

Now you get an additional profit of 600, so now you have six hundred dollars in profit plus your 350 in profit so this puts you at 950 in profit. Now you’re in profitable position of 950 but if this stock drops back down to $70 or your original entry point.

Let’s just say disaster happens a huge disaster happens to that stock and this stock continues to move lower all in a single day. What happens then is now you don’t have that six hundred dollars of profit.

This additional profit is gone so instead you still have your 350 in profit plus your zero profit from the remaining shares because you exit at your entry because you continue moving things up.

Now as you make this more complicated which you could do is do this on a more complicated scale. So let’s say you have more shares or a hundred shares doesn’t matter you do it in quarters. So as that stock goes up for every two dollars that stock goes up you take off let’s say 25 shares.

The stock goes up another $2 you take another 25 shares. Another $2, we take another 25 shares and you continue this process and continue taking your shares until you get pretty much until you’ve taken all your profits.

Now the remaining once you get, once you get to… I’m writing this out so if you want to take notes, once you get to 75 shares gone or taking profits out of 100 so this means you basically took 75 percent off the table.

You let that remaining shares or the twenty five percent of your original position ride, you let it ride. So now as you’ve taken all these profits, if you’ve taken seventy-five percent of your position right here off the remaining just let it ride, just let it ride and it’s free money and if it comes back right here to this level you’re out.

That’s it no negotiation nothing, no hoping, waiting for it to potentially get back up higher because these things can come back whipsaw and they can come back right down here no problem and you’re at the 70 level even though you took profits here but at least this gives you a $10 cushion.

$10 cushion on 25 share count so you got 25 shares at $10 so this would drop you back down at a negative two hundred and fifty. So you’re at negative two hundred and fifty dollars on that but remember you’re taking 6 dollars here in profits and this one will be even more because remember it’s $2 going up.

This is $2 that it went up then this one actually went up $4 and this one actually went up six dollars. So in total you made $10 plus the other two so that’s $12 that you made a $12 run times you know your share count.

You calculate it and get the results, let me calculate it for you and I’ll give you the result. Alright so it did those calculations for you here while I pause the video and basically here’s all the calculations for you so you have $50, $100 and $150 with all your profits and your total profits here you know you basically have $300.

From a simple one hundred 100 share position because you have 150 + 100 that’s 259 plus the other 50 that’s 300 simple basic math. Now remember if you made this a lot larger, or if you traded more shares you can always add an extra 0 on this.

Now you’re starting to take more profits so let’s just say you continue to take profits and you continue to raise your stop so now you’re taking you taking profits of $500, $1,000, $1,500.

Now you start continuing to add things up more and more and as you continue to add these things up you basically are just taking money off the table and this is how you continue to reduce your risk

Now this is one of the simple strategies to apply especially if you’re brand new, if you’re a beginner. Now in terms of your stops where do you place your stops?

Well let’s just take Amazon for conversational sake again. Let’s just take a look at this one I was watching to add to this position actually on the breakout so I’m waiting for this break out and you could see it started to almost break out right here.

Again for another time and the reason I’m using this example it’s just because I’m very familiar in this we heavily loaded in this trade so very invested in it. Here I am waiting for the break and you could say okay.

Now for me personally we didn’t add here but let’s just say you got caught a little bit early right here at this point because you’re watching it or even let’s just say right here you’re looking at this stock and you were adding it right here at this point.

In this situation you’re looking to add so you’re looking to add right here at this point after the break out because we have resistance here, we have resistance here so these are some of our resistance points. The stock is starting to break out here so I went ahead and let’s say I added at and I gave it a little room.

Here was 655.35 and normally for these stocks I would say let it pop an extra $2 before you add because they whipsaw because they’re already heavy priced. So let’s say I would get in at 657 that would have been my entry or 656 and that’s exactly why you do this because they’ll roll back over in a $1.

Let’s say you got an early, let’s say you wanted to get in early, you were little antsy. So let’s say you got in at 655.69 or 78 right here and then you got in and the stock goes up $1.35 and let’s say your risk management was $2 so the stock goes up to $2 for every $2 you take some shares off but this stock now went back under.

Within just let’s say twenty minutes, fifteen minutes right here the stock rolled back over and you’re stop was also $2. So from here if you go down, you didn’t fully make $2 but let’s say it hit $2. If it hit $2 you would be completely out and yeah that’s a losing trade, you’re taking a hit on that $2 so you took a $2 hit of your 2,500 or 100 shares whatever it is so you took your hit.

The next time it happened again let’s just say it happens again a second time you take another $2 hit okay so that’s $400. Let me break this down on a risk management profile for you. So if we take a $2 hit on a stock especially as big as Amazon so a hit or a loss just to write it out in case you want to take notes.

If we take a two dollar hit on a hundred shares, this basically is a loss of $200 and if we do this loss two or three times let’s say three times just for conversational sake just to show you how things work out and how things really balanced out.

Let’s say three dollars and I didn’t plan this example at all beforehand so $3 times your $200 loss three times, times your $200 lost you get six hundred dollars in losses. It may sound like a lot for many of you and that’s ok we’re just using it for numbers sake and you can use this example for your own purposes and apply it to other charts stocks and so on the math is the same.

Then what you do is you look at the stocks how they move, how they act and how they behave. So in this stock the move was $32, so the move was $32. So here I am risking $2 hit three times which is technically a $6 hit to gain 32 plus so it potentially could go even much more than $32 so I’m risking and that would be a late entry.

Right here that’s a 32 to 30 dollar gain right there. If you got in a little bit earlier you could’ve been on forty five-point run. So you’re risking $600 for let’s just say for conversations sake again you got your 32-point gain times a hundred shares so now you have your $3,200.

You can see that in this situation taking six hundred dollars in losses but gaining $3,200 is a huge win of course you’re going to have some losses from time to time but look you’re risking $600 to potentially make $3,200 and that means you can really make three or four of these mistakes maybe five of these mistakes if you’re really cautious.

Five times three mistakes, 15 mistakes and just have one solid winner. Now of course you will be taking profits and the strengths ok so maybe this is 2,500 but really there’s a lot of mistakes that you can be making as long as you’re taking profits in to strength then you can do the math how you would calculate this out.

Let’s just say for every two dollars that stock moves up you take some profits. So you’re taking some profits and then continues to move up you take more profits and more profits until you get to let’s say 75 if you’re just starting out, I would say 75% of you are holding.

If you traded a hundred shares you want to be left with just 25 shares and let the rest ride. If you’re more experienced, if you’re good at technical analysis you can Iet this go with maybe let’s just say 25% profit-taking so you can allow that stock to continue to run and you only take profits on 25% that means you let 75% ride.

Now as that stock continues to move higher and higher you want to take more and more profits and the reason for that is because things get over extended, so looking at let’s just take Apple because it had a good move and you know the extension and so on.

Here in this example you can see that this stock ran from here to here, we had a run of 83 points and by the way from here to here we had basically 79 to 80 points as well. So the A to B, B to C and C to D pattern for those of you that took the technical analysis course.

In this example here’s what I want to share with you is let’s say in this example we started with 100 shares right here. We started with a hundred shares and as that stock continues to move higher I may take 25 shares off so I’m reducing 25 shares.

Then again I may take 25 more shares off, I’m selling I’m getting rid of these 25 shares. So now I have 50 shares remaining and 50 shares gone. As the stock continues to run notice this huge run to this upside, I may take another 25 shares off right around this area even if I got it here that’s fine, that’s fine because it still had a massive run right here.

Even if I got it here another 25 shares off because the run is extended, it’s too far you’re going too fast and when you’re going too fast it’s going to pull back eventually and then I let the rest ride. So now my stop could be right here and that stock starts to roll over.

I hit that stop right here and I’m out and I took these profits, I took those profits and I took these profits and then I closed out the remaining 25 that was remaining for a breakeven right here because I’m allowing it to run.

Now if you want to get more technical what you could do is start taking ten shares off then another ten shares and then five shares so you start reducing how much you take off but looking at the bigger picture.

That’s how you do it that’s how you continue to increase your profits is by taking things off the table. If you don’t take things off the table and you wait and you had a lot… Here’s what a lot of traders do and I did it myself and I had a lot of mistakes doing this.

It was I would get into this breakout point because I understand some basic technical analysis and let’s say I got in 100 shares and allow that stock to continue starts to come back I’d say ok now it’s going back up wonderful.

I hold that stock and then I get too emotional and say oh well oh it’ll go back up its Apple and it continues to go lower because I get nervous or frustrated I sell my position right here, negative 100 shares and it’s actually below my entry point, its lower and I’m at a loss for whatever the amount.

A loss of five points giving me a loss of $500 or if you’re trading a thousand shares $5,000 so again that’s how you really don’t want to trade. Instead for simplicity sake start out the way that I explained and outlined here is to go step by step as that stock moves higher, as that stock continues to run in your favor you’re taking money off the table and you don’t use hard moving trailing stops that you know that are only that.

Instead you want to always be taking money off the table and until I got this concept, until I understood this I wasn’t profitable, I was not profitable in trading until I understood this concept because you have to take money off the table and as you trade larger, 10,000 shares or 20,000 shares the same thing you’ll take a thousand shares or three thousand shares and it doesn’t matter.

If you’re wondering about how many shares, when to take profits it almost doesn’t matter how many shares you take profits just as long as that you do. If you’re brand new just start with half, just take half off the table and then let the other half ride and that’s just because I say half just because it’ll keep your emotions out of the game.

As you get more comfortable you could take a quarter off and if you’re trading options, if you’re trading spreads, if you’re trading calendar spread or iron condors if you start with let’s say three calendars, you take three calendars and then you take one off and you sell one for profit.

Then maybe you sell another one so now you got one remaining and you let that one ride and see how things go depending on price movement and your theta and other things but you’re trading at the same way you’re trading it the same type of environment because you’re letting things run.

Hopefully this gave you some insight I mean we could go in depth into more concepts about risk management and I’m actually setting up another area here in the studio to potentially show you my hands and drawings.

That way maybe I could explain these concepts a little bit more on pen and paper where makes little more sense with drawings so maybe we’ll get that setup here soon.

Really what you want to do is just constantly take profits in the strength and that’s just one of the simplest and easiest ways to explain that risk management. Money management as you’re managing your cash flow that could be a whole another discussion but really the same concept really applies.

The concept is you’re taking money off when you’re in your trading account. So as you’re making profits you’re taking money off. So you apply the same kind of thing.

Maybe we’ll do another video more about managing the account funds on another video but as far as you know trading as that stock is running and moving this is a good starting point for many people if you have no rule or if you have no strategy for risk management.

Start with this and then you’ll evolve. So hopefully this made sense. I hope you had a great week and you know it’s been a great week here so far I did some raking and you know we’ll be going out for dinner just taking care of a lot of other things, going to get a new desk here as well for the office.

We’re going to make some changes we’ll be doing podcast for you guys as well over the next month or two. I have been focusing on also a lot of the options course, there’s still one or two more things I need to take care of on the business side to launch one or two of the other books that I’ve written there, the shorter books and get that out but really my main focus is the Options Course and hopefully January to February time that’ll be released it is absolutely huge, it is big and it takes up a lot of energy.

That’s my main focus that’s what we’re doing, that’s what we’re talking about education after that course will got the how to enter, how to manage your position, how to exit your trades, that main course is going to be put together, it’s going to be you basically just me talking large recap kind of like 15 to 20 hour recap or maybe 10 hour recap.

It’s going to be just kind of sitting and talking to you like a friend explaining to you how things work putting all those things together.

You’ll have to have the other courses to kind of to understand things because it’s going to compose and put everything together for you and that’ll really be my I would say probably more of my final major course to create as far as trading goes because there’s not a ton of more knowledge that I can really produce to that high level.

I mean something else comes up in the future then we may go ahead and make it but really beyond that will be making a lot of other free videos free training free material and lot of other cool stuff but a lot of it will be just absolutely just to contribute to educate and give more to your learning.

Enjoy the rest of the weekend, trade your stocks well, reduce your risk, manage your risk and have some fun go out enjoy yourself and you know make a life. We might be going to cheese festival so that might be our thing for this week.

Hopefully go out enjoy whatever you have around your area, take a friend you know contribute to someone else and you know have a good time.

Thanks again for joining me and I’ll see you next week.

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