Stop Loss vs Hard Stops

Wanted to go over a key topic I find important and that’s knowing when to cut your loses early on a systematic approach

Hard stops are in place to limit your loses and resolute around key levels

1.Long Example
2.Short Example
3.Conclusion Image
1. Long Example

When looking for longs it’s crucial to find formed demand levels/breakers above your key levels. Stop loss placements are around previous formed swing points.

Closes below key levels are signs of weakness and make for a manual exit.

Notes on the chart ImageImageImage
3. Short Example

For shorts you want your key levels above your formed supply/resistance levels. Stop loss placements above previous swing points.

Notes on the chart ImageImageImage
3. Conclusion

Knowing when to exit and taking a full stop are two different things.

As a trader you need to have both an Invalidation point and a manual exit point. Trade management as such limits your loses and keeps you untied to your running positions.

Hope this helps.

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More from @RektProof

15 Oct

Understanding Supply/Demand vs Liquidity

Knowing what a Supply/Demand (SD) is and knowing how to use them are different. Small writeup to provide clarity, to my perspective.

Small write up to cover:

- Improper use of SD
- Suggested Use of SD
- Conclusion Image
Improper use of SD, to my perspective.

Price always has an objective. When you have 2 swing points/liquidity pockets we are moving from one end to the other.

Mocking up SD levels between those 2 points will more then likely invalidate as price has decided it will engineer stops Image
Suggested use of SD levels, to my perspective.

Normally how I mark up SD areas are at the bottom of a range/bottom-top of liquidity points. As price taps demand/ runs a low we then move onto the next area of liquidity/supply invalidating all in-between.

Simple enough. Image
Read 4 tweets
15 Sep

Broken Swing Points

Wanted to briefly cover instances when I see traders get trapped within different variations as price consolidates and breaks down and how to potentially avoid.

Small write up to cover:

- Broken Swing Points
- Potential Entries
- Conclusion
Broken swing points vs SFP's

We know the standard SFP-
Price sweeps a level and reverts to the opposing side.

What If we fail to sweep but close below an SFP?
This is when breakout traders come in and are trapped hence the manipulation cycle.

Notes on the Diagram Chart:
Potential Entries:

PO3's play a vital role when price breaks a key swing point. As long as we leave an opposing high any close below is a high probability we trap first and then go for the high second

Breakers offer good entry points for a broken low once we shift above
Read 4 tweets
8 Jul
Degen Account:

500$ Start Balance

Price Action is kinda flat so gonna mix it up a bit and break or make this account within this thread.

Need a little bit of fun.

High Risk/High Reward.

#Bitcoin ImageImageImage
Degen Account Update:

Started the account out with an L risking 20% and cutting it for -5% acc hit.

Currently long on ETH off the daily open and looking for the LTF FVG Fill.

As mentioned; high risk.

Will log the trades once they close and update.

LFG! ImageImageImage
Degen Account Update:

Not much to update been sitting on my hands the last week. Volatility is absolute 🗑️

3 trades so far: 2 L's/ 1W but up 42% on the account.
Got stopped on a BTC long but was low conviction so cut the risk in half.

For now I'm just marking out levels. ImageImage
Read 24 tweets
2 Feb

This is how Alts have played out the last few weeks to my perspective and currently.

1. Initial drive up (get people bullish)
2. Sell off into HTF Demand (Sentiment flips bearish)
3. Price gets back above with trapped funds in lock.

Examples attached.

When you see price move up early in the week and sentiment favoring a certain side its good to zoom out and mark out your untested HTF Demands as we might be engineering liquidity.

(Notes on chart)

Read 4 tweets
14 Jul 20

Range strategy

Quick write up on a commonly used setup I tend to look for when price ranges.

Criteria is as such:

- Range Forms
- Price sweep/deviation of range point
- MSB (Market structure break)
- Test of formed SD
- TP

Range forms

Price outlines two swing points in the market.

Price sweep/deviation

Following the identified swing points- price proceeds to sweep/deviate before closing back inside range

Following the price sweep/deviation; price breaks structure and shifts a new low.

Test of formed SD

Formed supply following sweep + MSB
Read 4 tweets
29 Jun 20

Here is a write up on trapping market participants to my understanding:

Using current price action as an example:

1. Accumulation:Postions Build up
2. Distribution into breakout traders.
3. Re Distribtion into liquidity pockets


1. Accumulation:Postions Build up

Postions build up, market participants chopped within a short term accumulation.

Notes on the chart:
2. Distribution into breakout traders

Breakout traders expecting another leg up are lured into filling the remaining shorts Market Makers might have. Market participants provide liquidity to the market.

Notes on the chart:
Read 4 tweets

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