Pick your pain, or the market will pick it for you

What's up, guys? In this video I'm going to talk about how in trading you've got to pick your pain, otherwise the market's going to pick it for you. And this was inspired by, well, to give you a little bit of context, just today bitcoin went from $122,000 down to 102 in like a matter of a few hours. This was due to, you know, China tariffs or whatever. The point being, today we just went through the biggest liquidation event in all of crypto history. Just to give you an idea, there was $19 billion worth of liquidations. And again, just to put into context, how big of a number this is. The two previous largest liquidation events was the COVID liquidation event, which was worth about like $1.2 billion, and the FTX slash Luna collapse, which was worth about $1.4 billion. This time it's about 20 times bigger, right? 20 times more money was lost in this move. But the key thing here is that there was a very big move. If you were potentially shorting from the top there, you could have gained like a few months worth of profit in a single trade. You're realizing now that is about to rain. So I'm probably going to change a different angle. Oh, man, it's actually pouring now. Oh, this is wild. Right as I'm recording this video. So anyways, there's a saying with this huge move that happened, there are obviously a big party that consists of people mostly on the losing side of things, which is they blew their account, they lost a lot of money, and they now very depressed and about to give up. If you're one of those people, I'm about to make a video for you. In fact, I'll probably link it down in the description box somewhere when this video is posted. But anyways, it's a video that will teach you just how to bounce back from situations like this, because much like yourself, I, believe it or not, have went through this process more times than I can count. Too many times, in fact. So I'll just give you a couple of tips on how to bounce back from this. But otherwise, besides the party that was, you know, losing, there's another party which is the winning side, right? Imagine if you were short from the top again. You could have made multiple months worth of profits in a singular trade. And on that side of things, there are people that actually held. Then there are the people that took profit a bit too early, much too early, and did not manage to capitalize on how big of a move this could have Been right, they may have taken profit after a 1k dump, when in reality this went 20k. So now these people are beefing themselves up over like, oh, yeah, you know, if I knew, you know, I would have held on or stuff along those lines. And that is the completely wrong way to think about this. This here's the thing. If you've ever heard of the saying that if you try to catch two chickens, you end up catching neither. And that's very much true for trading. Like, there are usually two types of strategies that you can deploy when it comes to trading. One strategy is that you go sort of home run, right? You go for the big move every time you win. It's a huge swing. But in that process, you're probably going to lose a lot of trades in between those home runs because that's just the nature of catching home runs, right? Much higher risk rewards means that more likely than not, the move isn't going to be enough most days to hit that tp. So you're probably going to get stopped out, break even or stopped out in profit or stopped out, period, a lot of the times. But when you do win again, you're going to catch this big move and then you have the other side of things, which is the consistent traders, right? People that go for just 2R, maybe 3R, and regardless of what may come next, that's it. And so with that, the win rate stays much higher. You as a trader, you feel much more confident because, well, you're winning and there's a positive feedback loop going on, meaning the more trades you win, the more confident you feel about it, the better you feel about trading, the more likely you're going to do it, the more likely you're going to want to improve at trading. Because again, this is positive feedback loop for me. And like, this is what I would recommend for most beginners starting out. Do not go for that, you know, home run kind of methodology. You are not equipped psychologically, in fact, most humans are not psychologically equipped to handle the amount of losses that will come before that big win. Now here's the thing, though. You get to choose. You just cannot choose both at the same time. If you're gonna go for the consistent wins, you're gonna miss out on the big moves, and you have to be okay with that. And if you're going to go for the big moves, you have to be okay with taking a lot of losses in between. Now, later in the video, I will give you a methodology that helps you find the best of both worlds. If you're interested in that. But before that, I want to get into a different or like another concept, which is something that I've been sharing about for years at this point, which is the concept of everything you do in trading is painful. So let me just give you an example here. Let's say that your method involves entering at order blocks, right? That's your entry criteria, order blocks. Now, there are traders that prefer to enter at the start of the order block and there are traders that prefer entering at the middle point of the order block. Which one's better? The truth is, the one that's better is the one that works better for your psychology. Let me just give you an idea here. If you enter at the start of order blocks, it means that you're going to be less prone to missing entries. Like you're going to catch more entries, but then whatever entries that you do catch, potentially you're going to have lesser profit. Just to paint a picture here, right? Imagine this is the order block. If you place your order at the start of the order block instead of the middle point of the order block, which is another methodology that people use, well, your stop loss is literally double what it could be, right? And if your stop loss goes half, guess what, your profit goes double, right? Within the same move, you could have double the amount of profits. And so some people look at that and like, oh yeah, of course I'll take the more profit one, right? But then they start, you know, finding out that if you set your t. If you set your entry at the middle point of an order block, you're more prone to missing moves straight up. Like you're just not going to be in the move. And so whatever method, like, even with something as simple as just the entry, there is no such thing as a one best methodology. It just depends on what you prefer, right? What kind of pain do you prefer? Are you someone that that's okay with catching more moves but having less profit on each move, as long as it means that you don't have to sit there watching the market run without you, right? You could be that person or you could be another type of person where okay with watching the market, do whatever it wants to do, but you just want to make sure that whenever you get into trades, it want like you want to be getting into the highest quality trades possible, right? Again, there are trade offs to both methodologies, right? It's not a, this one's best, this one's best. Anybody that tells you that there is a quote unquote best way to do Things does not realize or just does simply does not understand the way humans work. We're all different. You, me, your mom, your dad. Like, this is all different people brought up on different beliefs. You have different personality traits, you have different like, ways you like to do things. What I'm trying to get at here is that everyone's unique. And so the best trading methodology has to be tailored to you yourself. So it doesn't matter if this guy on Twitter is like making bank with this sculpting strategy. If you're someone that just frankly cannot handle fast decision making under pressure. And that's fine, that's just who you are. It's not a, it's not a personality flaw, it's just who you are. And so instead of trying to fit into a mold, why not find a strategy or find a methodology or pick that sort of pain that best fits your personality type so that it complements your strengths rather than focus on your weaknesses. And so the same thing can be said with, you know, stop losses, right? Are you someone that prefers like, let's say that they're usually like different camps of people when it comes to stop losses. There are some people that move their stop loss to break even really quickly after the trade starts moving. There are people that like to take profit very quickly after the trade starts moving. Because, you know, according to them, um, you never go break taking profits. In fact, you do. And then there are the people that, you know, once they get into an entry, they set their stop. They just set and forget, right? If the trade plays out, it plays out. If it doesn't, it doesn't matter. And which method is best. The truth is it depends on what pain you're willing to accept. Because they're all painful in some way, right? Let's say you, you're the type of trader that, you know, moves your stop loss to break even really quick. What if you get stopped out a lot and break even just to see price go to the take profit target immediately? That's a sort of pain. But on the, you know, on the pros side of things, you get to have a much higher win rate, right? You have much less instances of losing money, but maybe your upper profit potential may be capped. But if that works for your psychology, if that makes you feel better, if that makes trading sustainable for you, that is the method that you should go for. So again, but if there's one thing that I hope that you take away from all of this, well, two things actually, is that one, when you try to catch two chickens at the same time, you're not, you're not going to catch either one. And then secondly is to pick your pain, otherwise the market's going to pick it for you. And the way that you go about this process is to pick the pain that you're willing to accept. Because the truth is, anything you do in trading is going to be paid for. And now let's get into that, you know, hack or like the tip that I was going to give you. If you are someone that wants to find kind of like balance both vaults, and I'm going to share a methodology for take profit, I'm going to share a methodology for stop losses. So on the take profit side, let's say you like at least what I would recommend, right? If, let's say you prefer the consistent approach. And yet occasionally, every now and then, when there's a big move, you want to also make sure you capitalize on some of that. The way you do this is by taking between, you know, 2/3 to 75% of your profit when the price hits 2R or 3R, which is very achievable most of the time. But then you leave the rest of the 25% to 33% of your position for a runner, right? You may just leave it overnight as you go to bed, right? Just you're not even going to set a take profit. Or maybe you set a take profit like a set take profit, but just maybe add 4R, 5R, maybe 10R, right? Something further so that in the event that price goes there, you take advantage of it and you don't feel terrible about yourself for missing out on that move. All right? So it just involves some kind of balance. And then when it comes to the stop loss side of things, the truth is there is no like, right balance of way to do things. But with the stop loss, it's much more about setting rules. So as an example for me, what I do is that when price goes above 1 or 1.5 R, that is my cue to move my stop to break even. Doesn't matter what the market is doing, as long as I am at least halfway to my TP target, I move my stop to break even. And at that point, if I get stuff that break even, it is what it is. That is my rule, and that is the pain that I've chosen to accept. But in that process, what I found is that gotten me out of a lot of very preventable losses. In fact, I would just get stopped, break even instead of taking a loss. So I would call that a Win again. That is a pain that I'm willing to accept. And for the rest of the time, let's say I am not monitoring the chart, right? I can set and forget. And for the rest of the time, if price just moves really quickly to my take profit or move really quickly to my stop loss, as long as that 1R rule is not met, I just get stopped out or my TP gets hit. So just to recap real quick, hopefully this does not get messy. Is that when it comes to your take profit, finding a balance really works. When it comes to your stop loss, you want to set rules and realize, I forgot this talk about my entry. What about the people? And you know, you want to be able to capture the best, best of both worlds, right? Using the order block example as a start, maybe you. The easiest way, honestly, it's going to sound really simple, is you place 50% of your position at the start of the order block and you place 50% of your position in the middle of the order block. And it's as simple as that. Now, don't take this too far, though. Like, for example, don't start doing like, okay, you place 50% at this order block and then 50% at a lower order block. And like, at that point, your stop loss is going to get wider and wider, right? There's a fine line to this. You. You don't want to go too far. And it's very easy to take things too far. But otherwise, if there's one thing that I want you to take away from this is pick your plane or the market's going to pick it for you. And at the end of the day, the best training strategy, the best psychology strategy, the best whatever, is the one that fits you and is the one that you're willing to accept. Otherwise, I'm going to get back to finishing my cigar. And the rain was actually just there for like five minutes now. It stopped now. So, yeah, now I feel kind of stupid for, like, throwing away that new whole cinematic setup and recording it here instead. But anyway, just wanted to get this out to you guys quickly so that you know, you can benefit from this. Otherwise, see you guys in the next one. Ciao, ciao.