WEBVTT 00:05.670 --> 00:11.850 Before buying any cryptocurrency the next thing you'll need to know is how to manage your risk and protect 00:11.850 --> 00:13.090 your profit. 00:13.410 --> 00:21.810 Here's some golden rules for risk management first always place a stop loss aka sell order at a price 00:21.810 --> 00:25.760 which is five to 10 percent below the nearest support level. 00:25.770 --> 00:31.800 In other words you'll immediately sell your coin to cut loss when its value goes down below the support 00:31.800 --> 00:32.730 level. 00:33.270 --> 00:35.270 So why do we need to do that. 00:37.500 --> 00:39.720 Now let's consider this example. 00:39.720 --> 00:44.990 Assume that you buy Bitcoin now at nine thousand one hundred twenty five dollars per coin. 00:45.830 --> 00:48.820 What should we do as a professional trader. 00:48.850 --> 00:54.330 First of all you'll need to analyze this chart and find out support and resistance levels. 00:55.170 --> 01:01.280 As you can see on the chart we have a support level here which helped push the price back up and the 01:01.290 --> 01:06.030 resistance level here which stopped the price going up many times in the past. 01:07.040 --> 01:13.220 After finding support and resistance levels what you can do next is to place a sell order at a price 01:13.220 --> 01:16.230 which is 5 percent below the support level. 01:17.150 --> 01:20.340 The support prices around sixty five hundred dollars. 01:20.350 --> 01:28.520 So to find a stop loss price you simply need to take 6500 and multiply it by 95 percent or Point 9 5 01:29.520 --> 01:35.730 and we'll get a stop loss price of six thousand one hundred and seventy five dollars. 01:35.750 --> 01:39.870 So why should we place a sell order below the nearest support level. 01:42.170 --> 01:47.840 Most people tell you to stop loss but never teach you how and where to stop loss. 01:47.840 --> 01:52.190 This is a very powerful trading skill that I want to teach you in this course. 01:53.070 --> 01:59.550 As we've learned support is an area where traders found it attractive to buy previously and if it was 01:59.550 --> 02:04.040 attractive wants to buy in this area it may well be again. 02:04.050 --> 02:09.150 So as a professional trader we know that other traders will likely place a lot of buy orders at the 02:09.150 --> 02:13.560 support level which can once again push the price back up. 02:13.750 --> 02:19.300 For example after we bought this coin at nine thousand one hundred and twenty five dollars its value 02:19.300 --> 02:21.540 keeps going down like this. 02:21.550 --> 02:23.580 So what should we do now. 02:24.980 --> 02:28.860 This is what you should have in mind as a professional trader. 02:29.040 --> 02:35.190 If this support fails to push the price back up I'll consider selling my coin immediately to cut loss 02:35.340 --> 02:37.490 before the price drops further. 02:37.890 --> 02:43.230 So if the price drops to six thousand one hundred and seventy five dollars and also my coin immediately 02:43.230 --> 02:48.370 to protect my money and if the support succeeds in pushing the price back up. 02:48.490 --> 02:50.360 Well my money is still safe. 02:50.560 --> 02:57.720 So I have nothing to worry about and I'll keep holding my investment bottom line when trading. 02:57.810 --> 03:01.820 Make sure you always have an exit strategy in mind. 03:04.080 --> 03:04.650 OK. 03:04.760 --> 03:11.810 The next thing a bird in the hand is worth two in the bush which means you'll need to take the profit 03:11.920 --> 03:12.990 immediately. 03:13.830 --> 03:18.300 You need to stop thinking that the price will keep going up because you don't know what will happen 03:18.300 --> 03:19.410 next. 03:19.420 --> 03:22.090 The crypto currency market is very volatile. 03:22.110 --> 03:27.610 Your Goines value may fluctuate 10 percent to over 100 percent a day. 03:27.660 --> 03:32.420 So there are chances that your good profit will turn into a loss tomorrow. 03:32.490 --> 03:36.160 A good trade will become a bad trade tomorrow. 03:36.340 --> 03:41.550 So you'd better sell your coin and take the profit before everything gets worse. 03:41.560 --> 03:44.860 So how do we know when to sell our coin. 03:44.860 --> 03:51.400 There are two price points that you'll need to take into account first is 3 percent below the nearest 03:51.400 --> 03:52.720 resistance level. 03:52.930 --> 03:57.120 And second is 10 percent above that resistance level. 03:59.810 --> 04:06.110 Now let's talk about the first exit point you may consider selling your coin when the price is 3 percent 04:06.110 --> 04:12.650 below the nearest resistance level for example as you can see on the chart we have a resistance level 04:12.650 --> 04:15.650 at around eleven thousand five hundred dollars. 04:15.740 --> 04:22.340 So to determine your exit price just take eleven thousand five hundred and multiply by 97 percent or 04:22.340 --> 04:23.590 Point 9 7. 04:23.810 --> 04:28.960 You'll have an exit price of eleven thousand one hundred and fifty five dollars. 04:28.990 --> 04:34.120 So when the price goes up to eleven thousand one hundred and fifty five dollars our sell order will 04:34.120 --> 04:40.090 be triggered and we'll make a profit this exit strategy is more passive and preferrable. 04:40.090 --> 04:45.220 As you just need to play some mortars and you can make money even while you sleep. 04:45.410 --> 04:48.010 You don't need to get too involved in the market. 04:48.110 --> 04:52.260 And on top of that you can avoid being affected by your emotions. 04:54.650 --> 04:59.780 In case you don't want to sell your coin yet you may keep holding it a bit further but you'll need to 04:59.780 --> 05:06.050 watch the chart closely before deciding your exit point when the price is at least 10 percent above 05:06.050 --> 05:07.190 the resistance. 05:07.190 --> 05:11.120 There are chances that the old resistance will become the new support. 05:11.120 --> 05:14.570 This is very common in technical analysis. 05:14.590 --> 05:19.810 Sellers are now thinking that the price is going to go higher and there's no reason to sell their investments 05:19.810 --> 05:20.800 too early. 05:21.620 --> 05:27.620 At the same time buyers also see this as an opportunity to get in the market since the price has already 05:27.620 --> 05:31.140 broken upwards through the old resistance. 05:31.160 --> 05:35.510 This will eventually lead to more buy orders than sell orders. 05:35.510 --> 05:40.850 Sellers will also increase their asking price to take advantage of this scarcity and increased demand 05:41.090 --> 05:45.580 which will finally push the price up when the price goes up. 05:45.590 --> 05:48.850 You simply make more profits in this case. 05:48.890 --> 05:53.320 You'll need to find the next resistance level to set your new exit point. 05:55.460 --> 06:01.010 And in case the price fails to break through the resistance level and goes down you'd better sell your 06:01.010 --> 06:04.290 coin right away before everything gets worse. 06:05.430 --> 06:11.390 In the next module I'll teach you some powerful technical indicators that I always use to determine 06:11.390 --> 06:14.710 if a coin's value will go up or down in the near future. 06:15.530 --> 06:17.600 The next section is very technical. 06:17.600 --> 06:22.130 So make sure you understand everything so far before moving on.