When Trading and Investing, how do you protect your money? Beginner Series Video #2

Live from Music City, Nashville, Tennessee, this is your motivational, sensational, inspirational, educational, aspirational, international, keenly awaited, highly anticipated edition of the Beginner Trading series here at Real Life Trading for folks from around the entire globe, which is round. I hope you are all doing absolutely serendipitously, sensational, incredulously, incredible, wonderful, trepidatiously, tremendous. Dylan Scott's here, says, what a day. Joseph is all fired up. Michael, welcome. Thank you for being here. I appreciate it. Hope everyone's doing just so well. Man, oh man, just some incredible things going on in the markets today. I'm so excited to be here. This is an amazing opportunity. Thank you for all coming back. And what's interesting is at this exact moment in time, there's actually already more people who were here at this time yesterday. So this is great. I'm interested to see if we get more people than we had yesterday, which is if you know anything about webinars. It's very, very rare for the attendance to go up on the second day and the second portion of the webinar. So for those of you who are here, thank you. Let's dive in. Our mission at Real Life Trading is to enrich lives. We do that by educating the world on how to profitably, safely and consistently trade the markets. This is what we're at right now. The previous class was Module one. This is module two. And Module two is entitled how to protect yourself and your money. That's where we are at. So the next module will be module three, how to input broker orders and how to make money when a stock goes down. Module 4 is about building a trading plan. And then we're going to have module five, which is just entitled extra goodies. Think about that like a little bit of a gift. And you know those free brownies that come at the end of some meals? That's what Class 5. Module 5 is going to be. All right, so about me. Really quick, some pieces of intel and information. I love hugs. So if you ever see me, feel free to hug me. Therefore, this whole social distancing thing is just not working out great for me. I'm just a big fan in general of the good old hugs. If you enjoy books, you are welcome to check mine out. My book is entitled Money grows on trees. You can find it anywhere. You get books. And I have many nicknames. That's another thing about me. For some reason, people love giving me nicknames. I don't know if it's the size of my head or just the ginormous, lusciousness of my beard. I'm not entirely sure what it is, but people love to give me nicknames. So here's some of the nicknames that I have. I get called the janitor a lot because I clean up the stock market. Hey, Sir Isaac Newsome. That's one of my favorite ones. A big fan of that Nostradamus. That one just is too good. Realistically anyway, I fully believe that anyone has the capacity and the capability and the opportunity to make life changing money using the stock market, especially right now. This is an incredible time in the market. There are so many wonderful opportunities. There are incredible things and situations and movements happening every single day. And I really would love as many people as possible to be a part of it and to understand how it works and to be there and to be a part and to enjoy and to just reap the rewards of greatness. So therefore, we're gonna go ahead and dive right in. One last thing, though, I want you all to know in advance that I do laugh at my own jokes a lot. Someone mentioned on YouTube that they hate the sound of my laugh and they're really mad that I laugh at my own jokes. So just dial in. That's going to happen pretty much the entire program. I'm a laughable, lovable guy. I'm going to laugh at my own jokes a lot. If you don't like the way I laugh, you're here for free. So leave. I don't really care. All right, awesome. Let's get started. Quick recap. Here's what we talked about recently. We discussed the terms shares. We discussed equity. We discussed stocks. We covered the importance of investing. We went through different types of charts. Who can tell me the two types of charts that we talked about last night? Who wants to give me that shot? What do you all think? What type of charts did we check out last night? Line chart. Yep, you guys all got that one correct. What's the other one? Candlestick chart. Yes, candlesticks. So line and candlesticks. Those are the two types of charts that we looked at last night. Candlesticks and a line chart. Really, really beautiful charts. And we also reviewed candlesticks. We talked about support and resistance. We talked about demand and supply. What is the one candle we focus a lot of our time and attention on in the previous module? Who can remember that one? Yes. Oh, man. There comes all of the answers. Hammer. Hammer. Candle. That is correct. That is precisely and exactly what we did and what we went through. So I'm gonna click on this really quick and pull this up and let me minimize this. This is the live stream on YouTube. So I'm bringing up over here and I'm gonna bring that up over here. All right? So that is where we are. Therefore, this is what I wanna talk about with you right now. Here's what a lot of people generally do. This is the old way of investing. I'm not saying it's the wrong way. I'm simply saying with the technology the way it is these days, with opportunities, with the Internet, with the computer capabilities, with the brokers the way they are, with the overall application of knowledge that's available to every single person, especially if you are here now, you are able to learn and be able to take away some real, actual, tangible, notable, usable, strategic information. So the old way is not a wrong way. It's not that it doesn't work, it's just slower, it's just more decent. So this was a, an example of Disney. If you bought Disney back in September of 2015, you could have bought Disney for, let's say $95.50 and you could have sold Disney about two months ago, sorry, a little bit longer ago for $112.55 and you would have made 17.8% gain over that three years. Type in a one if that's good. Type in a two if that's bad. I'm typing in a one. It's not, it's not bad, it's not terrible. 17.8% over that three year timeframe trading company that most people know a lot about. It's not awful. It's not something that I would laugh at or make fun of. But can we improve on that? Is there something that we can do better? Is there anything that we can, you know, how can we improve? What can we improve? What can we do to make it even better? Well, if you have the opportunity to look at really quick, type in A3 if you noticed some hammer candles on this chart, look kind of closely. And again, if you're brand new, happy to send you the previous class Cletus previous module. But let me just point out some hammers really quick. Check out that hammer right there. Beautiful, beautiful hammer candle. This one right here. I mean that is what that is literally Chris Hemsworth coming to your house with a giant hammer and putting it on the table saying, would you want to make money with me? Like, look at those two hammers. That's amazing. So now going forward, if you use the opportunity to learn how to trade and if you take the opportunity to educate yourself, what you're doing right now. If you're able to analyze some candlesticks and spend a little bit of time educating and going through the process. What if you, instead of just settling for one 17% win, you took a 17% win three different times on the exact same stock. And you'll notice not doing anything different. All you would have had to do is buy at the exact same price and then sell at the exact same price three different times. Now, you might be thinking, well, there's no way you can do that because it doesn't work in real time. It only works in the past. The truth is, that's incorrect. Everything works, just not all the time. There are obviously situations like right now, where the market can react irrationally. But at some level, at some point, people depend on certainty. People like to repeat patterns. People like to do the same things over and over and over, especially if those things work. Type in a 3 if you agree. If you can make money doing something once, you're going to repeat that action again. Simply the way it works in life. That's why this process does work, because you got to remember, there are actually people trading this. There are real people in these markets. Here's another example. Let's take General Motors. You all know about General Motors. Everyone here knows what General Motors is. Let's say you got really lucky and bought General Motors at almost the exact low in 2011. And you bought it for $21.50 a share. And you held it all the way up until 2019, and you sold it at 34.42. So you didn't do anything other than you bought it. And then when it was at 34.42, seven years later, you sold it. Now 60% return over seven years. How was that? Is that good or bad? What do you all think? Cabria says it's good. Shirley says it's good. Dylan says it's good. Patricia says it's good. A lot of people say it's good. Eve says, better than the bank. Yeah, exactly. It's a decent average. It's a decent average. Not too terrible. But again, I think if we educate ourselves, if we go down the process of learning, and if we take time to understand the way the market works, the way the chart patterns work, the way the candlesticks work, the way that sentiment works, I'm going to propose to you that you can do better. I'm going to propose to you that you at least have the chance, the opportunity, the glimpse, the capabilities of doing just a little bit better. For example, if you want to pop in on some relatively quick, decently aggressive trades where you bought at 2150 and you sold at 2520, and you bought at 2150, and you sold at 2525, same exact prices, and you bought at 2150 and then you sold at 2525, the exact same thing three times in a row, and then you got back in at 28:10, then you got out 37, then you got back in at 28:10, you got it back out 37, you got back in at 28 10, then you got back out at 37. So all you do is you repeated the same trade twice. So this particular trade, you took the exact same trade twice. This particular trade, you took the exact same. Just buying at the exact same price over and over and selling at the exact same price over and over. It's called a plan. Now, what would that return have looked like? You ready for an astounding number? Check this out. Whoo. Uh. Oh. Oh, man. Now we're talking. That number is more sexy, I think, if we're talking about sexy numbers, that is a lot more pretty. Again, if you think about it, it's not outrageously, outlandishly impossible. The only setup in this trade was taking the exact same trade, buying at the exact same price, selling at the exact same price, and then buying at the exact same price, and then selling at the exact same price, and just repeating that process over that seven year time frame. Pretty cool. All right, another one, Kohl's. Now, I like to bring this one up because a lot of people say buy and hold works very well. And my answer is it can. It can. Unless you get one of these duds. This was almost a 20 year dud, meaning if you bought Kohl's at $66 back in 2001, it was worth $66.54 a few months ago. That's a 0% gain. I mean, what? That's not better than the bank, by the way. Zero percent. Zero percent is not specifically better than the bank. And 20 years is kind of forever 20 years ago. Well, let's not even talk about what I was doing 20 years ago. It wasn't. There were no good things happening in my life 20 years ago. But what if. Again, ready for this? You're not doing anything insane, my friends. It's nothing radically impossible. It's nothing outlandishly ridiculous. It's nothing that a giant math wizard can't figure out. All we would do is get an opportunity to buy at the exact same price. 4 different times and sell at the exact same price 4 different times. What causes that to happen? Type in A1. If you're looking at that and you're a little dumbfounded, I mean, that's immaculate. 261% gain on the exact same stock that did 0% over that time just by simply buying at the same price you bought once, selling at the same price you sold before, and repeating that process four different times. This is actually a chart pattern. This is a particular chart pattern called a channel. The reason it happens and the reason that it works so well, my friends, is because of human sentiment. This down here is a support level and this up here is a resistance level, AKA the ceiling and the floor, AKA the demand and the supply. Emilio says, what about a stock with continuous uptrend like Apple, Amazon and Google? We talked about that one yesterday. My friend Marco says the third time you bought, you lost the trade with a stop loss. You might have, you might have. So if you bought here, you might gotten stopped out there. But Marco, you're absolutely correct. Could you have bought back in right here, the exact same price? What do you think, Marco? Is that, is that a possibility? Nick says yes. Yeah, I mean, again, I'm not saying you wouldn't, you couldn't got stopped out, but if you bought there, got stopped out, you could have bought back in the exact same price two, three weeks later or, or any of the other touches that happened at that support line, you know, any of the other times that occurred. And the reason I'm appreciative that you brought that up, Marco, is because we're gonna be talking about that in this class. Extremely important that we discuss stop losses and risk mitigation. But on the flip side of that, let's also go pour in some time and go look at some support and resistance and go look for some hammers. How about we do that as well? So I'm going to pull up our nifty handy dandy tool called TrendSpider. This is the charting software that is extremely useful and very, very user friendly, especially for beginners. Let's go look at and analyze a particular company. Someone mentioned Amazon earlier. So someone said this stock never goes down, it's only going up, it's always in an uptrend. Let's go look at Amazon, let's go look at a monthly chart, let's scroll all the way out and let's kind of do what we talked about yesterday. We're gonna go draw some support and resistance. So we're gonna go draw the all time high, which is right about there. We're gonna come down here and we. You can draw the all time low if you really want to, but on Amazon it is pretty, pretty far away. It's pretty low. You don't specifically have to. Realistically, it's kind of up to you. But if you want to draw a support level on Amazon all the way back here at $113, sure. And then realistically, we're going to draw some support resistance levels where the stock stopped moving. At least you can have up to four lines. So we have two lines here. Let's draw two additional lines. Again, this is on the monthly chart, so we'll draw one right there. So now we have three lines in the middle and we'll draw one additional line. Let's just draw that line right here. So now that's the monthly time frame. Let's pop over here to a daily chart. And looking at the daily chart, if we are reviewing it, it's loading really quick. All right, so some people are asking some good questions in the chat pane. Thank you for your assistance, team. I appreciate you helping that out. All right, lovely. So here's pretty much what we have so far. And this is the support resistance lines that we just drew. So if we're using these support resistance lines, can you see kind of in a way how. Let me turn off these moving averages for a second. Are you able to see how the stock can interact with those particular prices? Yeah. Pretty wild, right? Pretty amazing. So as we're looking at this, we can see pretty clearly that if you drew this line right here, if you drew that line at a previous resistance on Amazon, right back over here, if we drew it based on the previous resistance. So back in 2018, we would not have seen any of the previous data yet if we drew this resistance, that resistance has held very, very strongly for the last few months and years. It acted as a great resistance right here. You can see it acted as a stupendous resistance right here. And you'll notice that Amazon is working on bouncing off of that support right now. So again, my question is simply this. If you wanted to verify or have an idea of where you could lock in profits, do you see a particular price that would give you at least the opportunity to build a plan to say, all right, this is where I would like to sell my Amazon, and I would argue the answer is yes. I mean, right here, that's the particular price. That's a price that it sold off of many times before. If you were Wondering, man, I have all these shares of Amazon, however many shares it is, is there any price ever that I could look to sell that and maybe lock in some profit and then try to attempt to buy it lower? And I would argue, yes, I would say absolutely, by drawing some of these lines, by having a general idea of what you would expect, assume and think could happen, you are able to simply create a plan that gives you guidance and allowance to be able to figure out what you should do in a particular situation. By the way, check out this ridiculous hammer candle on Amazon. Alright, let's zoom in right about here. Type in A4. If you can see it now, you might see a whole different one that I see, but I'm going to show you all the ones that I see. This is the one that I was talking about again. That is Chris Hemsworth showing up to your house with his Australian accent asking, hey, do you want to party? And I'm thinking maybe. All right, here's another one. This is another hammer candle right here on the green Green arrow. That's another really, really nice hammer candle on Amazon. Here's another one right there. Another nice hammer candle. Let's show one that didn't work. This one right here most likely would not have worked right there. So the one in the black arrow, not really the greatest one. Not all these are gonna work, right. This one arguably could be called a hammer candle. This one could be arguably called a hammer candle. This one could be arguably called a hammer. The point is they think they show up a lot. That's what I'm trying to get at. They do show up relatively frequently and it gives you again, at least an opportunity to say, all right, I would like to make some quick cash flow. Because remember, that's what trading is. Trading is a cash flow generation opportunity. It's not something that's mystic. It's not something that's only for rich white people. It's not something that's only for really smart people who are incredible at math and grammar and have tons and tons of money. It's something that anyone can participate in. Carolyn says, why won't it work? What do you mean? Carolyn, if you can rephrase or ask that question a little bit longer for me, I'll be happy to do my best to answer it. I think it was Carol, not Carolyn. All right, beautiful. So that's what we have going through and looking at some real life examples and some real life reviews. So now I'm answer a question from Alexis. Sorry, Alex. Alex says if a hammer is A good buying signal is an invert hammer, a good selling signal. The answer to that question is yes. We're going to talk about that in class three. Carol says you said that hammer probably wouldn't work. That is correct. Because it went below your stop loss. Carol, we're going to be talking about stop losses in this particular class right now. Paige says, how bad is an upper shadow on a hammer? I like an upper shadow on a hammer, Paige. That makes it a lot better if I find one. If it has a cute little upper shadow, it's even better. Great question. So let's talk through this some things. Here's what's really cool, what we've looked at, and some of you are starting to pick up on this. By the way. Obviously these are some pretty incredible returns that we looked at looking at Kohl's, looking at General Motors, looking at Disney. But did you know that you can make money when a stock goes down? Type in a 7 if that's always mystified you a little bit. Now most of you here probably know how to do that. They probably know how to make money in the stock goes down. But we're gonna talk about that in the next class, alright? So if you're typing in a seven, continue to stick with me. We're gonna talk about it. It's one of the coolest things ever and it's just gonna blow you away. So I'll see you in the next class. Now, what we wanna talk about in this exact program right now is how do you protect your capital? How do you protect your capital? What if the market goes down extremely hard? Is there ever a time in history recently where that's kind of happened, where the market's just absolutely pooped its pants? All right? Anytime that you can think of in recent times. So it's good to, to have some protection. That's what Safety Sam used to tell me when I was in third grade. It's very important to have some idea, some rational realization of how to protect yourself in case something wild goes down. Now let me blow your mind one more time. Did you know there is such a thing as stock Insurance? Type in a 7. If you're like, no way. No way there's such a thing as stock insurance. There is. Now here's what's even more wild. I'm going to be teaching that in the advanced section of real life trading. Now this is a great time for a sales pitch, but the crazy part is we're going to do the advanced section entirely for free. It's going to come in a few months from now, so get ready to have your absolute mind totally blown. You're going to love it, it's going to be incredible. But regardless, we're going to talk about that in future programs you can actually buy stock insurance. It's amazing. But what we're going to do now is we're going to cover some basics. We're going to talk through some really gorgeous simple steps about how to calculate risk. Now, at some point we always need to know how much money we are risking on any investment. I'm gonna repeat that again. At some point we always need to know how much we are risking on any investment. Doesn't matter what the investment is. Could be a house, could be a car. I mean, houses always go up in value, right? Not exactly. Maybe over the long enough time frame they might be able to, but it depends on how much you're paying your mortgage anyway. I'm not going to go down that road. The bottom line is you should always know precisely or roughly or pretty much with a calculation of some kind, how much you're going to risk on investment. When you invest or trade stocks, this is usually represented by a percentage of your portfolio. Portfolio is just a term that means how much money you have invested in total. That's all. Nothing crazy. Alright, here's how you calculate risk, AKA protect capital. Before I dive into this program and into this piece of the series, I want you all to know something very important, and I mean extremely important. No one teaches this for free. And not only that, no one really teaches this at all. It's the weirdest thing. It's very strange. For those of you who have been around the block and you've gone through programs and courses and webinars and series before, you've probably noticed that no one ever talks about risk mitigation. They only talk about how much money that you need to make so that you can buy your Lamborghini and your Rolls Royce and drive around and impress the ladies and go to the beach and get sunburned and drink martinis all day. I actually like all those things. By the way, I'm a big fan of Lamborghinis. I like private jets, I like Rolls Royces, I like girls in bikinis, I like martinis, I like sitting on the beach. All cool stuff. I'm a fan. But what I can definitely tell you is that you will not achieve those things if you do not have any money. Right? Linnea says, hey, what about us women? Exactly. So ladies, step up for me. What is it that you want out there, you probably don't want to do it in a bikini, I'm assuming. But the thing is, I can assure you that none of that will happen if you do not have any money. You need to have money around. You need to be able to calculate risk. It's extremely important. Very, very important. So let's go ahead and talk about how to do that right now, entirely for free, with zero sales pitch. Here's how you calculate risk and share size. The risk formula. Now, you're going to want to write this down. This is legit risk formula. This is it, by the way, in green. This is. This is the formula. So I'm not hiding it. There's no other slide. I know you guys aren't used to something like this. There's normally a sales pitch right here. This is actually it. We're talking about it right now. It's happening. The risk formula is the predetermined risk amount divided by your entry and your exit equals the amount to take the trade on. Risk is a predetermined amount that you choose. Now, when I say predetermined amount, everyone here knows what the word predetermined means. The key is you have to keep it consistent across all of your trades. Now, remember, this is not the word investment. This is the word trades. There are ways to do an investment risk a little differently. We're not going to get into that in this particular program, but bottom line, this is a trade style. This is something where you can get in and get out relatively quickly. Nate, welcome. Thanks so much for being here. Usually you get to decide the amount that you risk on your account. Oftentimes people choose somewhere between 1 to 2%, 1 to 2% of their portfolio. All right, we're going to go to the next slide. It's very important, my friends, to keep the risk the same on every trade. There should never be an instance where your exit is not known before getting into a trade and also an investment. I had someone earlier today email me. He bought shares of a particular company. And he said, man, Jeremy, if this particular company, which was Baidu, ticker symbol B, I, D, U, he said, man, if that stock had reached $200, I would have been a millionaire. And I said, well, it's not there. It's much lower. What's happening now? And he said, I never thought it would go as low as it's going now and I'm losing a bunch of money. I said, sorry, because again, you have to know where you're going to get out. If it's a trade or an investment, you have to know where you think to protect yourself. You need to know where you need to buy insurance. You need to know something before you're getting into a trade. And charting it will help you. Educating yourself will help you. This is the most crucial aspect of trading. It's risk management. This sounds obvious, but it's not about how much money you make. It's about how much money you avoid losing. If you keep the money around long enough, it will grow. Money loves to grow. Money loves to hang out with you. You love money and I love money. So we want to keep it around. We don't just want to give it away willy nilly. We want to protect it like we're protecting anything else. Trading is not about the money. It's about the process. If you get the process right, you'll get the money right. Keep that in mind because initially I know you're all coming here to make more money. I get it. I like more money. I'm a big fan. Again, I think money is an incredible tool. But trading specifically. The reason I'm saying it's not about the money is you might have $100, you might have $100,000, you might have $100 million. Maybe someone out there is a billionaire, I don't know. But it doesn't matter how much money you have now. It's about how much money you can create through building your process. My friends, ladies and gentlemen, boys and girls, for those who are here, Robert, Abby, Ariel, Brian, Claude, Mark, Marco, Mike, Tim, Sochi, Yuri and Tyler. This is a skill that you can keep forever. Remember I mentioned yesterday, you will never, the vast majority of you, 99.99% of you, will never work your way to financial freedom. You have to create an exponential skill that grows over time. It doesn't matter if you're a doctor. In fact, you know how many doctors I coach every single week? You know me, engineers and lawyers, people who do extremely well. I coach hundreds of doctors and lawyers and engineers all the time, every year. And they get paid extremely well. But they're getting bored. They're getting burned out. They're doing the same thing over and over. It's hard work. It's really uncomfortable. You know, I have a trader who says, I'm just a teacher that wants to do better. I think that's phenomenal. And is there anything wrong with that, ladies and gentlemen? Absolutely not. If you're an engineer who wants to just do a little bit better, if you're a Firefighter who wants to do a little bit better. If you're a salesperson, if you're a real estate agent, if you're a mom, if you're a dad, if you're a stay at home parent, doesn't matter who you are, if you're a software engineer, if you're a software architect, if you're a chemical engineer. I'm starting to make up things now. I don't even know what a chemical engineer does. This is a skill you get to learn and keep forever. It's yours. It's not going to get taken away from you. AKA if you retire from your job that you really, really like, however old you are, you can do it for a long time. Or what about if you are 17 years old and you never want to work for somebody? Is that a bad thing? Is it a bad thing to never ever work for someone in your entire life? I don't think so. If you're 17 or 18 or 19 or 16, this is an actual legitimate career that you could be considering. It's amazing. So I'm harping on too much on that process. Let's keep going. The R, AKA the risk unit. The R. So the reason I call it R is that R is short for risk. R stands for risk unit. This is a percent of risk per trade. Let's take two traders, Bob and Mike. And there's both a Bob and a Mike here in class. How perfect. I've chose great names. All right, so Bob. Where's my boy Bob? There you are, Bob. Thanks for being here. And Mike. So Mike takes a trade. He risks $500 on that trade and he loses $500. Was he okay with that, ladies and gentlemen? Was he good? Was that okay? Yeah, he risked 500, lost 500. Okay, cool. No big deal. So then the next trade, he risked 500 again, and then he won 500. Then he risked 500 again and he lost 500 and. And then he risked 500 again and he won a thousand total. Walk away home cash, 500 bucks. Now let's go check out our boy Bob. Bob does the exact same thing. He risks 500, wins 500, risk 500, wins 500, risk 500,' loses 500, gets annoyed, gets frustrated and goes, you know what, man? I'm gonna take this and get all of it back. Yeah, I need to make more money. I'm gonna risk 1500 on this trade. And you know what? Because he risks too much money, he gets scared, he panics, he loses it, and he actually goes negative. Even though he has a 50% win loss ratio. What is the difference between these two traders? What's the difference other than their name? It's the process. One was consistent, one wasn't. One had discipline, one didn't. One follow their plan, one didn't. One kept the risk mitigation, one didn't. Mike was simply more profitable than Bob because he didn't do anything crazily different. That's a very powerful concept to understand. It's hard to understand. It's a hard lesson to learn. But it's worth it. All right. The R system percent of the portfolio that you determine. Someone asked earlier. Is that your total cash account in your account and the answer is yes. Is the amount of cash that you have in your account percentage of your portfolio that you determine, divided by difference of your entry. Difference of stop equals numbers of shares. Generally, you're going to go with no more than 2% of your portfolio. Most traders usually start at 1% or less. That's all. Most people start with 1% or less. I think you're all really good at math. Let's just practice it. If you have a $50,000 account, what's 1% of $50,000? Let's just press the gas pedal and see how good you guys are at math. Cabria, you're entirely incorrect. Donald, you're right. Bob, you're right. Mark. You're right. Mark Linnea Cabria is finally correct. He just left out a zero by accident. That's all. He knew the answer. 500. That is correct. 500 is 1% of 50,000. But there's only seven people who answered that. So let's try this again. What is 1% of $20,000? Let's see if we get a little bit more answers. Okay, now the answers are coming through. 200. So some of you were initially scared to answer. And it's okay, I get it. But that's pretty easy math, right? That's about as high as I go with the math. That's about it. I do percentages and then I'm good to go going forward. This allows you to overcome the fear of losing money. My friends. Having a defined predetermined amount creates certainty on how much you will lose on a given trade. Certainty is one of the most basic human needs. You're gonna wanna find out the amount of money that is comfortable to you. And the R system is gonna help you with this. It also puts traders on equal footing. For example, I do have a trading room where I trade live in front of people every single day. And we walk through what trades are good, what trades are bad, which trades are crap and which trades are amazing and which trades we should take. You can see my screen. You can see our setups. You can see me talk through. It's really, really great. Let's say we have 40 traders, all total. 40 traders who take one trade, and everyone makes one R. Is everyone's r different? And the answer is probably most likely, everyone's might be a little bit different. It's gonna be hard for them to all be the exact same. So if everyone makes an R on a trade, right, that could be $50. That could be $500. That could be $5,000. It puts people on an equal footing. So if you see me take a trade, you're like, all right, well, cool. Jeremy made X amount. He made one R. He risked X amount to make X amount awesome. It doesn't matter. It keeps people in equal footing. So if you're just starting out and you have a smaller risk, you don't feel that bad. If someone made 5,000, you only made 50. It's just your risk unit keeps you all on the same playing field. Just kind of helps smooth things out. All right, type in A4 if you want to do some examples. Oh, yeah. And here we go. Bob has a $23,000 account. This is Bob setup. Very nice. Hammer, candle. Nice lower shadow. Nice upper shadow. Coming off of the support in a little bit of an uptrend. And Bob wants to risk 1%. The entry is 2219. Same entry on the chart. The stop loss is 2132. Same stop loss on the chart. The entry is above the hammer. The stop loss is below the hammer. Really easy things w rest says I've been through many educational material for a couple years. This is obviously entry level. But sincere congrats, Jeremy. Nothing even comes close. Thank you. I appreciate that. That's very kind of you to say. Means a lot. Thank you. Thank you. I have someone saying, how was the entry determined? Entry was above the hammer. That's it. Right? Found the hammer. Entry is above the hammer. Could the entry have been 2220? And the answer is yes. Could it have been 2221? Sure. Could have been 2222. Sure. So it's, you know, a penny of variance is not going to stress me out. It's, again, a little bit more art than science. You can't walk up to a painter and go, hey, I want you to paint this exact painting this exact way. And you have to follow my precise 100% exact specifications at all times. Painters, artists, they kind of have to have a little bit of a flow. Troy says, do you ever. Does your ever. Does your stop ever become too tight because of the risk formula? So good question, Troy. You determine your entry and your stop first and then you take the risk in the math formula. J.D. stone says, do you have to wait for it to get to the entry? That is absolutely correct, J.D. yep. You wait for it to get to your entry. I have someone says, can I ask a dumb question, please? I'm hoping you will. Now, while Michael is asking his question, this is the math behind the trade. Okay. 1% of his account is $230. The difference between 2219 and 2132 is 87 cents. Right. So 1% of 23,000 Emilio is 230. Is that correct? And then 230 divided by 87 cents gets 264 shares. 264 shares is the investment. Right. 264 times the price that you're buying is how much you're investing. Donner says 1% equals the price. Nope. 1% is the amount of risk on the trade. Bob has a $23,000 account and he's risking $230. Emilio. I see what you're saying. Yes. That would be 264 times this number. This should be an equal sign. I think I can probably adjust that really quick. We found an error and there probably will not be the last one. All right. 264 times 2219 equals. There you go. I like people who like math. Emilio says it's just a typo. Yeah, no big deal. I appreciate you pointing it out. It is all good. Mistakes are okay. In fact, anyone who ever works with me, if you don't make a mistake, I don't work with you. AB says that makes more sense. I was wondering where the 586 came from. Alright, cool. Deal. All is good. So that probably makes you all a little bit more happy. Any questions about the slide before I move on to the next one? Mitzi says this is awesome. Michael said the investment should be 5858. Nate says 5 8, 5 8, 16. Let me go get my phone. So I just did all the math wrong. There's a 43% chance that every every slide's gonna be a little bit incorrect. Then shouldn't be 5 8, 5, 8, 16. Not entirely sure how that was so massively incorrect. 100% my fault though. All right. Joseph said so. If you have a $1,000 portfolio, you should only invest $10. Joseph, that's a good question. Is investing $10 and risking $10 the same thing? Joseph says to me it is. Alright, well, I'll tell you that that's the incorrect way to thinking then. Investment and risk are two totally different things. You see on this number how it says investment? $5,858.16. The risk is 230. Simple as that. So if something goes to zero, then your investment is your risk. Right. If you buy something, whatever it is, doesn't matter if it's a house, a car, a job, a stool, a chair. Okay. If you buy something and it goes to zero totally, then you lose the entire investment. Diego says you were leveraging $5,000, but it's only risking 230. Nice. Yep. You are correct. Ali said. How did Bob decide his stop? Great question, Ali. Do you see this hammer candle right here? So this particular hammer candle, what we're doing is we're taking the entry and we're putting it above the hammer candle. And we're putting the stop loss below the hammer candle. Robin says, I used to get confused on our versus investment. The R does not equal the investment. No, it does not. And that's a great clarification. So that's why I want to make sure I really stay on this slide. To make sure you guys all get that we are risking $230. This is the amount that we will lose. We are investing 5,800. Remember? How much money does Bob has? Let me see if I can repaste that. How much money does Bob have? Bob has in his account? $23,000. Is $23,000 more than 5,800? The answer is yes. Okay, so are you risking your entire account on this one trade? Okay. No. How much of the account are you risking? 1%. How epic is that? That's pretty sick right now. I'm telling you, this is math that you're never going to learn anywhere else. Lily says risk amount is what we lose if it is wrong. That is correct. You are absolutely right. Shirley says. This is starting to make sense. Gorgeous. Nancy says instead of. Instead of buying on the first hammer, should you wait for the bounce? The hammer is the bounce. Nancy, it's a great question. If you find a good enough hammer, that is the balance. So you see a hammer, you can set the trade up. Chris says maybe they don't understand the stop loss. No, I think they get it. But we're gonna be talking about stop losses. That's the good news. Let's do another example. Maybe the math is right on this one. Let's find out. Let's find out. Here we go. Tina also has a $23,000 account. How crazy. Now, let's look at this hammer candle right here. Okay. Type in A1. Is that a good hammer candle? So we're talking through hammers. We're discussing hammers. We're talking through strategies. That is a great hammer candle. Has a little bit of an upper shadow. Michael has a little bit of a lower shadow. Has a nice candle body. If you look at the lower shadow, you'll notice that it just barely goes lower than right here. Right. So really frustrating and annoying people. Bell says, what time frame is this? It actually doesn't matter. That's the cool part. I know that this was a daily chart because I took this trade, but it doesn't matter what time frame. It could be any time frame. Yep. So very, very nice. Hammer candle, again, really assuming that you just barely trapped anyone who got in or got out right there. It shook those people out. Douglas says, isn't that an overall downtrend? It's a good question, Douglas. I would say no. I'd say for this particular portion that we're looking at, it's just going sideways. Abby says, what time frame is the chart? It doesn't matter, Abby, but this is a daily chart. Can be any time frame. But I know it's a daily chart. I'll show you the trade after we go look at it right now. I'll pull it up in just a moment. Mark says the math is correct. Oh, thank you. So, Doug, did I answer your question about the overall downturn? I think it's just a sideways move. So this is a daily chart. This is a screenshot of only about a month. Really? Scott said, how did you determine the stop loss? Great question, Scott, would you agree, Scott, that the stop loss is below the hammer? Scott says, yes, that step one, then all I decided to do in this particular trade is just make sure that it was below all of the lower shadows. All of the recent lower shadows. I just want to put it below all of them. So I kind of picked a price. Now, Scott, could the stop loss have been 43, $44 and 39 cents? What do you think? Scott says, okay, I got it. Well, I still want you to answer the question, though. Could it have been. I would say yeah, I think so. It could have been that price. Could it have been 4,000, 440? Could it have been 4,000, 441? The reason I made it 4,439 is because I also wanted it to have some relatively easy numbers, some relatively basic math that we wouldn't have to work too hard on. And that's pretty much what we got. Great questions, team. Beautiful, beautiful questions. Really, really good stuff. All right, so, Tina, 1% of risk entry. 4,638 stop loss. 44,38 shares. 230 divided by 2 equals 115 shares. 115 times 46 is the investment. $5,300 is the investment. All right, I'm a pause here for just a moment. What questions do you have about that? Any questions? Lily says Tina wants to invest more. She has to do with other stocks. Again, Tina, it's not about the investment size. It's simply about the risk. So if she has more money to spend, then sure. Paige says, do you want the stop loss to be a trailing stop loss, or do you keep it fixed? Keep it fixed initially. Yep, you're gonna want to keep it fixed. Very good question. All right, Joseph says, so if you have a thousand in the bank, how much did you invest? It's a personal choice, Joseph. You guys want me to tell you something crazy? You want me to blow your mind? Type in A1. If you want me to blow your mind really quick, I do not have an emergency savings account. Now, let me blow your mind a little bit more for you. You guys ready for this? All right, number one, what do you have an emergency savings account for in case you lose your job, right? I don't have a job to lose. I am my own boss. I trade the stock market. So who's going to fire me? Now, hold on. That's pretty cool, though, right? I mean, in all seriousness, I got you on that one. So, number two, I have a credit card. Like, if I need something really bad, can I just not have a credit card and put it on it? Now, I know a lot of you are thinking, wait a minute, wait a minute. You don't want to go into debt in case an emergency happens. It's like, well, I understand that, but that's what a credit card is for in case of an emergency. It's cash that's just sitting there, not doing anything. And if you pay it off that next month, and there's nothing to really worry about. Now, here's the other thing. Can you. Can you pull money out of your trading account. And the answer is yes, of course. Charles says, it depends. You're right. It depends. If it's an ira, so if it's an individual retirement account, you might not be able to, which I do have one of those, but in all over generalities, can you pull money out of a regular non retirement account? And the answer is yes. So that's where I put all my cash because I want to take all of my cash and trade with it. Because if I can make 1% a week on all of my cash, why do I put any money in the bank at all ever? Head explosion? I don't. Why I don't have any money in the bank. I mean I have like a few hundred bucks just to have it there. And then I have all of my bills just go right off my credit card. And then I pay my credit card, you know, at the end of every month type in A1. If that was just a little bit of a paradigm shift, I'm not saying you have to do that. I'm not saying you have to do that. I'm just saying that's what I do because why would I not? All right, cool deal. Chris says, don't you have to pay taxes when you take it out? Not necessarily. If it's not a profit, you don't. You have to pay taxes if it's a profitable like you're pulling out capital gains. Scott says how many trades a day do you risk that amount on? I take about three or four trades a day usually. Scott. So here was what happened to that particular chart. And what we can see is this was the hammer right here that we were just looking at it. Trade up, came down, almost stopped everyone out and then ran nicely for a good solid win. Scott says, so total 6% daily risk. Max, maybe. Maybe Max. Melio says that was about a two hour win. Very close to it. Yeah, very, very close to it. So that was kind of what ended up happening on that particular ticker. End up going high, ran nicely, did its thing. Let's go to another example. Let's talk Sharon. Sharon, where are you at? What's going on? Sharon? So Sharon has $45,000 in your inner trading account and she sees another hammer. What do you guys think about this hammer? What do you think? Is that a good hammer? I think so. It's a really nice hammer. Nice lower shadow. Look how gorgeous that lower wick came in and trapped people. Look how pretty. Has a nice upper body, a little bit of a bare body candle. So you have a lot of sellers in that candle. So if the stock goes higher, all of those sellers have to get out of their position. Really, really nice bear candle. Mitzi says the next candle had a very long tail that can take out your trade. Well, that's the thing, Mitzi. At this point, you're not into the trade. You're setting up the trade right here. But yet, you're absolutely right. What happened is this. This lower tail, this wick, the shadow took other people out of the trade. It shook out their weak hands. So you are able to go in and find this after the fact. Diego says if you have 23,000, you find four opportunities. That means 20230 times four. Yeah, that is. That is correct. Yeah. If you take four trades, that is absolutely adequate. All right, cool. We're doing well. We're doing well. I like it. I like it. So Sharon has an entry of 2095. Her stop loss is 1995. And she decided. She decided that she wants to risk only half point five percent. Now, is that. Is Sharon entitled to only risk half a percent? Emilio says no. The answer is, of course Sharon can risk whatever Sharon wants. It's up to her. It's her money. So she can risk half a percent. She could risk 0.1%. She could risk 10%, 5%. It's up to her. Totally her decision. So what I did is I just kind of rounded this one. Is that okay? I just rounded it a little bit. Make the math just a smidge easier. So I went with $230 of risk divided by $1 equals 230 shares. Angela said, is that consistent? As long as she keeps her risk at half an hour? Half a percent. Absolutely. She gets to decide that risk amount. So if she risks 0.5% on every single trade, then, yeah, it's very consistent. It's up to her what her risk is going to be. Michael says, does more space between the entry and stop increase risk? That's a great question, Michael. And the answer is no, because again, the formula is you're only risking the same consistent amount every time. Regardless of. Of how big the stop is. You're still risking your percent that you are comfortable risking. So again, in Sharon's example, let's say Sharon had an entry at 22 and a stop at 18. All right? So Sharon has this massive, massive stop. 22 and 18. What's the difference between 22 and 18? Right? 4. Okay, so if she took $230 divided by 4, how many shares would she be trading? So 230 divided by 4 equals. Let's just say 58 shares. Okay, 57 and a half. 58. 57. So does that make sense? So she still risks the exact same amount even though the stop is larger. What? This is mind blowing for people. I know, I know. I can almost see your jaws on the table. Lily says you simply buy less number of shares. That is correct. So the risk stays the same. Risk is the exact same, but you just buy less. Renee says, is bullish stop limit the same as the entry. That is correct. Bell says, do you have a risk reward ratio that you stick to? Yep. We'll be talking about that very soon. Julia says you'll end up buying less shares if the stop is larger. That is absolutely right. So if the stop is smaller, do you buy more shares? The answer is yes. Sean says, what determines your selling point? Great question, Shawn. The answer is, you do. Mark says, at what point would you consider a higher risk tolerance? What would be considered max risk? That just depends on your personality. How much money you have, how much capital you have, how much time you have, how much experience you have. Max risk. I mean, technically, 100%. That's Max. I mean, max risk is all of it, theoretically, but the max amount that I would suggest any particular person with anything under five years of experience would be 5% on a particular position. So you're gonna have to put in some time. But if you have an aggressive nature and, you know, you're a little bit more aggressive and you realize that, and you're okay with that, and you're comfortable with that, then, you know, give us some focus. But if you want to go all in, let's just play Texas hold' em together. You know, I'll take your 200 bucks, and then all is good. Julia said, I heard a saying, There are old traders and there are bold traders, but there are no old bold traders. Yep. It's all about risk, ladies and gentlemen. All about risk. All right, beautiful. I think we're getting this. This is good. So when do we sell? Oh, man, we had so many questions about this just a few moments ago. When do we sell? Boy, I wish Jeremy would tell me the answer to that question for free. So here we go. We're gonna create some exact rules for that in module 4. Right now, you're in module 2. However, I love aiming for 2 point for ours. Why 2.4? Just trust me on that one, okay? Give us some time, you'll see. Now, you can make it whatever number you want. It's up to you if you want to make it less, if you want to make it more. It's 100% your decision. It's your money, it's your call. But 2.4 hours. Let's do an example. This is an example that Beth took on Denny's. Type in A4 if you've heard of Denny's before. All right, everyone's heard of Denny's. Now, the entry. What determined the entry? Who can tell me why in the world did Beth get in at 2002? Robert Thompson says, hold up. It's hammer time. Yeah, that's the top of the hammer. See this cute little hammer right here? Nice little tiny hammer. That's just the one that she found. Now, could she have played it bigger? Absolutely. Could she have gotten in with this hammer right here? The answer is absolutely. She could have been in on that trade. But she just took this particular size, this particular setup. She felt comfortable about this trade. That's the one that she played. So 2002. Her stop loss was 1950. What's the risk number between those two numbers? Julia says wouldn't she get in at the price of the open of the next candle? Nope. She's getting in above the high of the hammer candle. Some says 48 cents and some say 52 cents. I think it's 52 cents. I really hope I did that math right, otherwise I'll be a little embarrassed. It should be 52 cents. Naveen says, how can you place the trade since the chart is moving so quickly? It's Good question, Naveen. This is a daily chart. So since this is a daily chart, you have approximately 12 hours to set that trade up. Now, I don't know how old you are or your abilities on the computer, but I don't think it's gonna take you 12 hours. Right? This is going to be one that you know you can manage. This is at the end of the day when the market is closed. You're coming home. We talked about that yesterday. Swing trading, right? You're coming home. You're sitting down, you're pulling up the computer and you're scanning for hammers. You're looking for charts. You're going through some stocks. This is swing trading in and out. Now, I will say in all seriousness, if you're getting home, do not drink and trade. I'm not a personally a big fan of alcohol anymore. I used to be. It was a very negative habit. I'm working on it. But I would. In all seriousness, if you come home from a hard day of work and you're looking to do some trade setups, don't drink and trade just doesn't work that great. All right, cool target. Someone said, what the heck does 2.4 Rs mean. 2.4 Rs is 2.4 times your risk. That's what 2.4 Rs is. If your risk is a certain number, you know the number, right? You know your measurement of risk. Does everyone follow this math with me? If you know your measurement of risk, it's simply the difference between your entry and your stop. And you want your target. You multiply it by whatever number you want. What if you want a target of 3.972? 3.972. What would you have to do? Well, you multiply $0.52 times 3.972. I have one trader says, what is the difference between the stop and the sell? The stop loss is 1950 and the sell is 2126. So if you're doing this analysis, that's what 2.4 Rs mean. So the way you calculate it is you take 2.4 times 52 cents and you come up with a number. Can everyone check that number to be correct? I hope it is. Let's throw out my calculator. 2.4 times 0.52 equals, yeah, $1.24. So what do you do then? What do you do? How do you do the formula? Newsom, walk me through it. Well, this is how you come up with a target. This is your entry. Will everyone agree? Again, my friends, the good news is this is literally second grade math. Now, granted, I messed up on it once. I never said I got an A in second grade math. I think I got a B, though. I got close. I passed second grade. I promise. This is second grade math. It's not hard. If you're frustrated by math, take a deep breath, write it down. Because if you have kids, they have to do this. You might as well have to do this also. 2002, that's your entry. So you're going to add $1.24. Where the heck did $1.24 come from? That number right there. How'd you come up with that number? It's $2 2.4 times your risk value. How do you get your risk values? The difference between your entry and your stop? Determine based on the chart. 2,126 is the 2.4 R target. Diego says you also use price and support resistance to understand trade. Right. That is 100% absolutely accurate. Joseph says this is extremely useful. Thanks, man. I appreciate it. All right. Michael says, what happens if. If you go above the 2.4 our target, then you make more money, but your goal is to sell at 2.4. That is your objective. So if it happens to go above that price, then you know, up to you. But that's where you're looking to get out at. Chris says that's your target, but not necessarily where you will hold to. Correct. That's the goal. The goal is to hold up to that price. So let me come show you how that trade actually worked out. This is the debacle that's happening to Denny's right now. They are just selling off in a firestorm. But this trade actually worked out really, really well right before it crashed. Weird. Really, really weird. All right, so check this out. I'm gonna bring this over here. I'm bringing this up here. Does this chart look familiar? It's the same exact chart. So check it out. This was the setup. That was the hammer that we were looking at. This was the stop loss. The same numbers because both her and I took this trade. So I remember this trade very, very vividly. 2002 was the entry. Did we get filled at 2002? The next day, boys and girls, ladies and gentlemen, friends and family, fans and followers, legends and legend debts. The answer is yes, we got filled the next day. When did we get filled? When it broke above 2002. Not before? That is correct. When it broke above 2002, we got filled. Now, did it hit the 2.4 R target? Yes, it did. Did we sell at the 2.4 our target? Yes, we did. Was that a good thing? Yes, it was. Because Denny's. Denny's is doing its best stone in water impression right now. This is. This is the current present day chart of Denny's. It just absolutely got grand slammed lower. Look at this thing just getting destroyed. Michael says, what if 2.4 hours is above a resistance level? It's a very good question, Michael. If the stock is in a very strong uptrend, it's okay. If the stock is going sideways. It's. It is your decision if you wanna sell at that resistance. I personally fully subscribe to the point that you can create and determine your own rules for when you sell. So it's really up to you if you wanna get out early. If you wanna get out at two Rs. If you wanna get out at 1.9, it's kind of your decision. Right? Okay, let's do another one. Now, Scott says this math helps me utilize the system for trading. Of course. Yeah. And when you say all this math, you mean the second grade math that your kid's doing? Yeah. All this helps you utilize the trading system. That is absolutely correct. All right, so let's do another example. This is Matt's trade on ticker symbol ecpg. Okay? Robert says if you drop it into a spreadsheet, it gets even easier. Whoa, whoa, whoa. Calm down, Robert, calm down. Spreadsheets. Don't tell people that you can make things easier. All right, cool. Now this is going to be a pretty easy math, but I want us all to walk through this together. We got about five to ten more minutes left of the presentation. And by the way, my friend, get a good night's sleep because tomorrow is a doozy. Tomorrow? Oh, my goodness. I could charge single handedly, like $4,000 for tomorrow's class alone. I mean, insane. All right, so Matt has a $500 risk unit. Entry 3607. Stop. 3000, 442. What is the stop value? Let's all calculate that together. What is the stop value? Mark Lombard. Well done, sir. Okay, not the stop loss price, but the stop value. What is the stop value? Joseph says, can I watch this presentation again before tomorrow? I'm gonna try my absolute best, Mr. Johnson. I'm gonna do my absolute best, my friend. All right, so you guys all are getting that answer correct. Let's see if I got it correct. Let's find out together. Hey, nice. All right, so if you wrote in $1.65, that's the stop value. How in the world did I come up with that number? Well, again, I went to my handy dandy spreadsheet and I did the difference between those two numbers. Crazy. Crazy. All right, if we know the stop value and we know the risk, we should know how many shares to buy. Who wants to do that math? Robert Thompson. Try again. Unless you're doing your own risk unit, which is fine. All right, so far I have 20 answers in the chat pane and 200 plus people here. Let's keep filling up that chat pane with the correct answer, please. So if you have a $500 risk unit, let's see if I did the math correct. 3, 2, 1. 1. Correct math 303. If you did anything different, you didn't use the calculator the right way, which is okay, not a big deal. So if you take 500, you divide it by $1.65. So just try that in your calculator one more time for everyone who did it incorrectly. So it's not a big deal, it's all okay. Being wrong is a beautiful thing. Means you're about to learn something new. That's all. Man, I would make a terrible kindergarten teacher. Hey, you're wrong. It's all right. Don't worry about it, little man. I'll give you an A anyway. Never fail a kid. No kid left behind. Leave it up to Jeremy. Everyone's getting a good grade. Alright, so does that make sense? 500 divided by $1.65. If you throw that into the calculator, you will come up with 303 every time. Cool. Deal. All right, so here's the real tough one. Now, if you get this answer correctly, you have a shot at making money in the market. If you don't get this correct, it's okay. Don't stress about it. But you're gonna want to practice a little bit. What would the 2.4 R target be? Wow, you guys are fast. Okay, keep doing it. Keep typing. If you haven't typed in a number yet, try again. Let's see some numbers in there. Alright, let's find out if I have the right number on this slide. Here we go. It's new to me as well. Here we're going to find out together. If you said 4003. Give yourself a round of applause. Well done. Right? How did we get 4003? We multiplied 1.65 times 2.4 and we added that number to the entry. We came up with 40.03. Well done. If you got that correct. I'm serious when I say this. Well done. If you can do that math, you can build an Excel spreadsheet to do that math. However you want to do that math, you can make this work. Is that good to know? The fact that you're here now, you are making it past 95% of other people. 95% of people will give up when they look at this math and go, this is too hard. I'm not going to write these numbers down. I don't want to take time to do second grade math. So we took 2.4 times 1.65, which was the difference between these two numbers. You took that number and you added it to 3607. Chris Stanley says, that's sad, man. You know what? I agree with you. I think it's pretty lame. I think it is pretty lame that everyone would just give up. Julia says, what if it doesn't go up to 2.4 R? Do we wait until we lose an R? No, we'll talk about that over time, but you end up trailing it out. Mitzi says, did you say take 3607 times $1.65? No, ma'. Am not to come up with this number. You take 2.4. So, Mitzi, do this with me. Take 2.4 and multiply it times 1.65. What number do you come up with there? So I want you to do that number with me. Take 2.4, multiply it times 1.65, 2.4 times $1.65. Mitzi says, okay, all right, we'll wait on you. I'm just gonna sit here, watch the keyboard, waiting for you to throw in that number. And anybody else who is still stuck, feel free to throw it in as well. Caesar says, can you repeat? Why 2.4? Because it works. I'm giving you a workable formula that works. All right. Linnae is crushing it. Still waiting on Mitzi, though. Lily says, how much time to give a stock for it to reach your target. We're going to talk about that in module four. Scott says, this is good. I like the way you have it laid out like this. Thank you so much. All right. Still waiting on Mitzi. Ali says, so is the target is where you sell. That is absolutely 100% correct. Jeff says, do you chase an entry on the gap up the next day? Nope. Mitzi says, I'm not doing it right. I keep getting $3.96. That is the correct answer. So $3.96. Then what do you do? So now you add 396 to the entry of 3607. And when you do that, you're good to go. Boom. Greg said, did you see my question? I did not. Greg, there's 49 questions that come in every 14 seconds. So if you can throw in your question again, I'll do my best. Assist. All right, cool Deal, team. We're moving along now. I got a real mind boggling one for you on this one Bell. Email me or email support. Real life trading email. Somebody will take care of it for you. Greg says, on the previous slide, you multiplied 2.4 times the stop value. On this slide, you divided 500 by 165 to get 303. Why? All right, let me go back and see if I can answer this question. On the previous slide, you multiplied 2.4 times the stop value. Correct. So the stop value is $1.65. He says, on this slide, you divided 500 by $1.65 to get 303. That is correct. He says, why? So far you just mentioned the things that I did, Greg, so you're absolutely right. Both of those are correct statements. 165 is the difference between these two numbers. How many shares to buy is your risk? 500 divided by $1.65. The risk amount is a different amount. So this is a $500 risk unit. So $500 divided by 165 comes up with 303. So I don't know exactly what question you have. Now, if we were together. He says you multiplied it on the previous slide. I multiplied it on the previous slide. Let's see. I don't think I did. So I'm going back for Greg. I multiplied it on the previous slide. 2.4 times. 52 cents is the target. So this was me showing you the math of how to come up with the target. So the risk on this particular trade is a. This is me showing you just how to come up with your target. That's all I did in this example. So all I do. All I did in this example show you how to calculate the actual target. That's really. That was a whole trade. There was no risk in this particular trade. Right. There's. There's no r. This is me showing you how to mathematically calculate the target. Greg says he got it. All right. Cool. Beautiful. Scott says that's why the 500 was confusing, I think. No worries. I'm saying this particular slide had no risk. I was just showing you guys how to calculate a target. But if you want, you can come up with whatever risk you're comfortable with on this trade and do the math if you want again. Yeah. So Beth, right? Beth is. There's no risk on Beth. This is the math of the target. Very valid question, folks. Very valid question. It is. All good. Now we're all caught up. I love it when light bulbs go off. That is absolutely right. Bell says learning takes time. That is correct. Steven says the $500 risk unit would be more clear if you add a dollar sign in front of it. Okay, I'll do that right now. Dollar sign. Boom. Look how cool that was. You rock. I roll, baby. All right, here we go. Let's talk about Svetlana's account. Now, I want to show you guys some really cool stuff. Did you know this can work with bitcoin? Bum, bum, bum. What? Now, I'm not going to go too much into bitcoin, all right? I have a course for it. I have a program for it if you really want it. It's available to whoever wants it. But this will work with bitcoin. So let's do a bit of math. Now, Svetlana is using 4% of her account is That a little bit more aggressive, yes or no? Yes. A little bit more aggressive. Is she allowed to be more aggressive? Sure. It's her money. She can do whatever she wants to with it. I mean, at the end of the day. All right, so what do you guys think about this trade on bitcoin right here? Is that a good hammer candle? Yeah. So pretty nifty hammer candle. Not too bad. Nice lower shadow, bearish can. Are you starting to see a pattern, my friends, where you have these nice, bearish candles with good lower shadows? I'm getting in above the candle. Bell says, is this a daily chart also? It is. You can note it by the 1D in the top left hand side. 1D stands for 1 day. So each one of these candles is a daily chart. Daily candle. Yep. This is a daily chart. Michael says. So a shaved top can be a hammer. That is correct. Yep. It definitely can be. Nice long lower shadow, nice shave top. I do like it if they have a little bit of an upper shadow, but it doesn't have to. Nate says, volume is red, but the hammer still works. That is absolutely right. We're gonna talk a little bit more about why that worked so well tomorrow. And by the way, my friends, I'm not exaggerating when I say tomorrow is a doozy. Doozy mcdooserton. Okay, so here's fetlana's entry. She decides her entry on Bitcoin, 5381.67. Her stop loss, 4379.47. This is the math. 4% of 15,000 is $600. $600 divided by $1,002.20 equals this number, my friends. Can someone buy that number worth of bitcoin? Yes or no? Philip says, not sure. The answer is yes. Now, is that pretty sexy to know? This works with bitcoin as well. Yeah, not bad. Not bad, right? I have one trader saying it's gambling. So 4% of risk. So the reason it's not gambling is because she can't lose all of her money gambling. You can lose all of your money. I gamble. I like to gamble. I love playing roulette. It's very fun, Right? But if you put $1,000 on black and it hits red or green, you lose all of your money gone. Doesn't matter how much money you put in. Put in $100,000 on green, you know, on black and it hits red or green, you lose all your money. In this particular trade, she's gonna lose 4% if she's wrong. How much can she Make. Ladies and gentlemen, can Svetlana make more than 4%? And if you guys know anything about bitcoin, I mean, you know the answer is yes. All right, ladies and gentlemen, was this one of the coolest classes you've ever attended? Yes or no? Whoo. If you loved it, give me some love on social media. This is my Twitter. If you're on Twitter, I have YouTube channels. Please follow me on both YouTube channels. If you have Instagram, I'm on Instagram. If you're on Facebook, I have face. I have all this, all the social media stuff, just go and do it. It's cool. It would help me out. Rob says ETA on this video being posted. Man, I'm gonna try to eat some dinner and then really do my best to relax for like an hour. So can you give me like two, three hours, please? Is that okay? If that's all right, man. I'll do my best. I'm gonna be working till four in the morning anyway again. So, you know, This was module two, everyone. Thank you for being here. I appreciate it. This is one of my most favorite people in the entire world. Her name is December. She's incredible. She lives in la. This is Arabia Johnson. Arabia Johnson is one of the greatest traders I have ever met. Single handedly. She is a monster. She is one of a kind. She is incredible. Both of these two ladies are inspiring. Two totally different backgrounds, two totally different beliefs, two totally different political viewpoints, two totally different everything. And look at them trading together side by side, making money. How amazing is that? That's what trading does to people, folks. It brings us together, it helps us grow as individuals. If you want to become a profitable trader, you must become a profitable. If you want to become a phenomenal human being, you're going to have to become a phenomenal person. Anything you do in life, you're going to have to become better and slowly grow and slowly improve and learn and become a phenomenal version of yourself. I hope each and every one of you tell all your friends and family I'm doing this again tomorrow. For those who are here live, if you were here for the very first time, email me if you have a question. I have two email addresses. Supportalllifetrading.com you can message me there or you can message me jeremy@reallifetrain.com you can message me there, whichever one you prefer. This one you're gonna get a little bit of a faster answer. And this one, it'll take a few days, but I'll get you. Heather says me and my dad are doing this class together from afar. I love it. Heather, that's so good. Carolyn says, I love this presentation Jeremy. Thank you Ms. Bailey. Thank you so much. Heather says it's amazing. Mark says, can I send this to other people? Yes, you can Mark, please do that. Mr. Arafat says, thanks man. Enjoy your dinner. Back at you. John says folks I'm adult but where I can point to get the recording of course it's posted we'll give you the recording John. Don't worry we'll take care of you. Julia says you are amazing. Thank you Julia. I am just simply trying to be a representation of all the people around me which are you. Thank you folks. I'll be back doing it tomorrow. I'm serious. Get a good night's sleep Tomorrow is intense. Scott, email me if you need a recording. Here's all the emails. If you need a link, email me. I will help you out. I'll give you all you got folks. You rock. I'll see you next time. Bye.