This is Why TAKING PROFIT Will Make You Go BROKE

There's a saying amongst retail traders that you can't go broke taking profit. Well, you can and you will. Taking profit will somewhat paradoxically wipe out your profits. Welcome back everyone. This is another topic that seems to contradict common sense, but like everything else in trading, the crowd are wrong about everything. Especially on this. So I'm going to explain exactly why profitable traders don't don't use profit targets and what they do instead. When I talk about taking profit, I'm including any and all variations. It doesn't matter whether It's a target three times greater than your stop loss or a 10 to 1 ratio. It doesn't matter if you're using partial closes and scaling out of winning positions, or even if you use a time based take profit. If you use any take profit strategy as part of your system, you are hurting your results and will remain a losing trader. Reader, you cannot make money in the long term taking profit. Now I know that sounds nuts, but I promise it's not. Clickbait Let me explain. As you've heard me say in other videos, it is impossible to make money from a random market. That isn't my personal opinion. It's a mathematical certainty. So unless someone has found a way to break mathematics, there isn't anyone on the planet who can make money if they are trading in a random market. And all markets are nearly completely random. Before we go any further, let me quickly explain the maths behind why random data is impossible to profit from. In a random market, whether the price goes up or down. Next is exactly 50 50. If you have a 10 pip take profit and a 10 pip stop loss, you'll hit the stop 50% of the time and the take profit 50% of the time. They cancel each other out and the net result is zero. And it makes no difference what ratio you use. If the stop is three times further than the profit target, say 30 pips versus 10 pips, you'll hit the profit target 75% of the time three times enter four, but three times ten is the same as 1:30. In random markets, it doesn't matter what your profit to loss ratio is in either direction. They all cancel each other out and leave you with nothing. And it makes no difference if you use a trading stop on the way to your target or partial take profits. All that does is make the results more complicated to calculate. But eventually all wins and all losses balance out to net zero. That is always a mathematical certainty. In random data, the only way to create a profit is when the market is not zero. Random in other words, when the price is more likely to go one way rather than the other. So the odds are not 50 50, but perhaps 60 40. Okay. Now in Forex we have the data to prove reliably that 99.48% of all price changes are random. 99.48% of all price moves are impossible to profit from over the long term. That comes as a shock to most people who are used to hearing Instagram traders brag about having the ability to predict the price with high probability. They make it sound like it isn't random at all, but hey, they are professional liars. The reality is, over the course of a 24 hour day, on average 23 hours, 53 minutes and 29 seconds worth of the market is impossible to profit from in the long run. Or from the other perspective, you've only got a seven and a half minute window where you have a chance to make profit. Assuming you can accurately identify that seven and a half minutes in the first place. That's pretty crazy when you realize the stats, isn't it? So what does that mean for taking profit? It's pretty obvious. If you enter a trade and you close it out within 24 hours, you are almost certainly trading entirely random data. If you're a scalper or taking multiple trades in the same day, in and out within minutes or a few hours, you're trading entirely random data. And that means you cannot remain profitable in the long run. Now of course people can have wins in the short term that they can stick on social media to make it look like they know what they're doing. But wins and losses will eventually cancel each other out in the long run and you'll have net zero profit. Actually, because of trading costs of spreads and commissions, you will be in a loss. The only way to profit in the long term from trading is to make sure you are in the market for all of those rare non random moments. And I can tell you right now, it's impossible to predict when they will happen. It doesn't matter how many lines you draw on your chart, or where where you draw them, or what fancy terminology you use to describe them. You are never going to predict the 0.52% of the time when a price data is non random. Especially as you're not even getting seven and a half minutes every day. Averages don't distribute so uniformly. There may be days or weeks of 100% random price moves, and then a concentrated chunk of several hours or a couple of back to back days of non random moves. There's no way to know when or where it happens, but it is really easy to make sure you profit from every single non random move. You don't need to predict anything, you just need to leave the positions open for the long term. And this is how it works. If for the sake of argument there was a uniform seven and a half minutes of non random price moves every day, if you keep a position open for the full 24 hours, you would be guaranteed to catch that non random move. Keep the position open for another 24 hours and you're up to 15 minutes of non random moves you've captured by the end of the week, you've got nearly 40 minutes. By the end of the month, it's just under three hours. It may not sound like much, but it's 100% of what is available. These are the only market conditions it's possible to profit from over the long term. So it's vital you get every second of it. This is one of the reasons you often hear people say that markets are random in the short term but less random on higher time frames. That's true, but it has nothing to do with chart patterns or anything like that. You haven't got a higher probability of being right using higher time frames. I'll leave that for another video to debunk technical analysis and chart patterns. The reason longer time frames are less random than shorter time frames is simply because the more time that goes by, the more chances there are of seeing a non random moment. And if you follow long term trends, you accumulate all of those tiny moments into your positions and that is how you make profit in the long term. And the way to do that is using a trailing stop to follow the trend. But never use a take profit as long as the trend continues and there are more and more non random moments to accumulate into your position. You want to catch as many of them as you can. You already know non random moves are few and far between, so never limit what you can take by taking profit early. All that will do is harm your profits. There's a link in the description and the end screen to a full trading system that will teach you how to maximize your profits with the best type of trailing stop loss. Obviously this series of videos I'm doing are note frills with no examples or animations. So I won't try to explain the trade and stop loss here. Watch that other video because I show full examples on charts so you can see exactly what I mean. What I hope I've explained in this video is why taking profit especially on an intraday basis is guaranteed to kill your chances of being a profitable trader in the long term. If this has been helpful or interesting for you, please subscribe to the channel. If you haven't already subscribed, give it a like maybe share it if you can. Your support helps a lot and I am very grateful to you. There are links on the screen now to other videos you might like, but especially the system video, so make sure you click through to that if you want to learn more. Thanks for watching and I'll see you next time.