Level Risking

     Hey everyone, This is the first of many blog posts that myself and all TrickTrades moderators will be doing. This will be where we express our thoughts and ideas to you all. Mainly this blog will be headed by Kelvin (Kelvo) but I will still chime in from time to time.
    As for the first blog entry I really wanted to talk about levels. I get asked all the time ” so what do you think $XYZ is going to do?” well shit… I have no idea but what I can say is that if there is a long signal or short signal I can tell you what $XYZ will do in the next few mins with a high probability of success.  A big misconception of new and struggling trade4rs is that professionals know what the stock in question is going to do, like they have a crystal ball or something. No matter how long a trader has been doing this for he or she has no idea, but they can tell you where the chart is headed. We must be patient and wait for the proper trigger and then and only then take the trade. You cant just randomly hit buttons and expect a good result. Waiting is the name of the game the only time i would say that waiting for a proper entry or that perfect price isn’t necessarily crucial is when you are taking a trade based on a longer time frame or the bigger picture idea. That said, you still want the best price possible because the best entry translates to a bigger profit on the trade. You will hear me say “just take the trade based off of a level” This right here folks is one of the secrets that professionals have learned through their years of trying to master the markets. There are many traders out there that even after years and years still don’t grasp this concept. so what do mean by “just take the trade based on a level.”

So let’s take this $IQV chart for an example. The blue circle and yellow arrow is the entry. So after $IQV tagged the VWAP and then pulled back and started coming down you should be watching and waiting for a higher low setup. Take the trade based off of the low of day (LOD) “level”. The one thing that most people have a problem with is the whole “what if it keeps coming down and breaks lod?” ….who gives a shit! period! stop thinking like that! you MUST have faith in support and resistance. It has proved itself twice before that so the odds are telling you it will hold again, remember….its all about odds. Now you’re probably asking yourself “well I don’t know when to take the trade.” Heres a secret guys, it doesn’t really matter! Just take the trade anywhere you want and risk off of the lod level. It sounds simple because it is. Stop over thinking these things. Another huge secret of the pros is that we let the “Big boys” do all the heavy lifting for us. So what do I mean by that??? there are certain triggers that you NEED to have faith in. Certain setups absolutely will have follow through…why? because there are literally thousands of traders watching for the same thing. Both retail and institutional traders will watch for the same thing so you NEED to have faith that it will work. Will these setups work 100% of the time???/ hahaha no not at all but they will work well over 50% of the time and that’s all you need. You cant avoid losses, get used to them and learn from them and that’s all you can do. So in a nutshell and without getting too much into it, that’s basically it. Keep your trading simple, I have made my career as a simple trader and really i do mean simple. There is a lot I couldn’t tell you about. To be completely honest I really don’t care to know about most things, sometimes the best information is no information.
I’ll give you one more example of what i like to call “level trading”

So as i’ve mentioned before in the members only video lessons and trade recap on this trade i was risking off of the $25 level. So why did i decide that was THE level? first $25 is a huge whole number, one of the biggest and second this was really starting to get overextended so for $OMER to go any higher than $25 it would need a catalyst to do so. So when i took my first entry it wasn’t near the 25 yet but i was comfortable adding in all the way up to 25. This can be a tough concept for new traders to understand but you need to be comfortable with seeing red on and in your account for that trade and really, on all trades. I’ll let you into my mindset on this trade. I really didn’t give a shit what it did all the way up to 25. I didn’t freak out when you see all of those green candles on the way up…..doesn’t matter and even better cant matter! This trade paid off and is the biggest year to date for me. You know what though if it didn’t work it wouldn’t have mattered to me in the slightest. Some trades work and some trades don’t. wrap your head around what I just said, folks.
Well, guys and gals that’s all I really have to say for now, I just wanted to kick this off with one of the biggest things in trading, risking off of a level and taking the trade.
Leave a comment and let me know whats up! so until next time…….Audios

Thanks, Pat

11 thoughts on “Level Risking”

  1. Good info and thanks. One thing I just realized while reading this…higher lows don’t happen in 5 minutes; they seem to take around 30+ minutes to develop.

    Can’t tell you how often I “see” a higher low within 5 minutes of a dip…no more!

  2. James Lambert

    Great post Pat! Lots of down to earth and poignant information, like you say it doesn’t have to be complicated and I know I have been guilty of over thinking .. trying different strategies but at the end of the day it’s all about support and resistance! Thanks for sharing!

  3. Hi, nice…
    Do you use fibonnaci levels?
    If a stock run up and stops at specific point, firsteval loks like triangle, but than just tuching top, for me is great sign for short, if a lot of times touches the resistance -top, and depending on the day, and the full number of 25, no news. And… I have one question, what if this number was $ 100 like $ DRYS
    At short, I never enter more than once, that’s my rule.

  4. Demarius barajad

    Awesome post man, thats what i need to get over, the fear of losing a trade. I feel the fear tapering off due to your vids and post man.. just accept it.

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