Execution, Scaling, and Taking Profits

This episode of Painting the Tape is sponsored by Ninja Trader Live, the network built for future traders. Get a front row seat to the action, learn from top traders, and sharpen your edge. Click the link in the description to subscribe to the Ninja Trader Live YouTube channel, and watch us trade live on the network every week. This is Painting the Tape, a podcast by traders/fortrators. Join us as we embark on the journey of the game we love. Tick by tick. Hey guys, this is Leo with Painting the Tape, and you are listening to Episode 3, Season 2. Today, we are going to be talking about Execution, which is something we covered in Season 1, but we have new speakers. We'll call them. Friends? I don't know. Yeah, they're friends. Friends. Yeah. That's a good way to just pride. Podcast homies, can we call them? We're going to go through entry, exit, take profit, etc. I think it's a great conversation because last time we went through it, we just talked about how I and AJ execute, and there's new voices here, and I'm sure we have different opinions. So, that's what we're going to jump into. So what's up guys? What is up? What's going on? Hi. There it is. It's like the goodbye. It's worse than the goodbye. I almost said I'm made XY closes out today on stream. That would have been perfect. Well, you guys just made it super awkward. So, why don't you kick us off with the discussion because we already went through the approach that I use, and we can certainly kind of go back through it, but maybe you have probably developed them the most since that conversation because you were a bit, you weren't green, but you've been through a period of rapid growth. I'm not green anymore. I'm closer to that like shade of yellow that used to be on my ugly chart. It's like, not green. And we had to kill that one. Not great. But yeah, I probably had nothing to say back then. I went back and listened to those episodes a couple of weeks ago when we were starting this back up again and just to see what the hell we had even talked about. And it was wild to hear myself from that perspective. It really has been a fun little time machine to go reference back into. And I probably spent that time learning from you and AJ a lot too. And when they all learned from XY and Nick too at the same time every day. So yeah, my execution has definitely changed a lot. I really lean heavily on those rules that I built with the VWAP bands that never existed before. So I've really created, I don't know, like 10 or so rules of when I can pull which trigger. And so that's a big execution change. And then beyond that, I don't really allow myself to execute without seeing some sort of delta happening to back up that position. All right. Well, let's go into the actual clicking the button layer of the conversation because we can get into like the trade setup stuff on another episode. I want to go directly to when you pull the trigger in a trade, are you all in one position at one price level? Do you scale in? And if you do, how do you approach that scale in? And then what how do you TP? Got it. So this is something I developed over the last year and realized over the last year. Since we had this conversation the first time. I went through the post of stuff. I experimented with that idea. Ultimately executing on NQ over the last, you know, that was six months after we had that episode and I learned the stuff. Ultimately, I've realized that it was best for me. Then to just put the whole size on in one bracket that is, it's built to be a one to 1.25 profit factor if all three lots fill or all three positions fill. It just was easier for me. I was getting less in my head about should I put another lot on? Should I like is this? I don't know. It became a secondary conversation that was getting in the way I'd be actually trading. But then when volatility died over the summer and I was just marketing in the full position, I was getting into spots badly. Like I'd be like, ugh, that's a terrible fill. I should be a point lower. You know, and so over the summer and when volatility slowed down and also now that I've moved to trading ES primarily, I'm getting in 50% of my position to begin with and then adding the 50% with confirmation or I'll add a little lower too if the trade's still there or if I get a bad fill on the first half. So I've changed it three times. You said you do this on ES? Yeah. I'll get into on NQ. It's still just all in one go full clip. Yep. It's something well over the summer, NQ would be I was able to add into that because volatility came down. So I realized that in high volatility, I want to be the full position size right and right out. I don't want to have time to rethink this because price is going to be moving faster than I can make that decision. In lower volatility environments and markets, I am splitting it up 50% now in my entry. Usually. Surprisingly, I kind of agree with Stowe because that's usually how I execute in the morning part of the session versus the afternoon. In the morning, I tend to be more full clip with what I'm seeing and a more scalpy kind of in and out full size too than I am kind of scaling in the afternoon when things have slowed down a touch. I'm happy to kind of build into something as we're consolidating a little bit and then take profit along the way if it moves in my favor. I think in the mornings, like when there's higher volatility and I tend to scale, it's not that I'm like, I will have the tendency to martingale, but I feel like I tend to and building into a potentially a bad position that's kind of been invalidated with the time it's taken me to kind of build into it. Yep, yep, like I've changed that process two times. So I think it might not be something that's always set in stone for everybody. And that was something that I didn't think about before. Before I had to adjust it at all. So maybe really nothing in this game is something that lasts forever and doesn't eventually get tweaked, you know? I don't know. I feel like you would always go full size in on NQ and it seems like it was like super, or is super consistent for you, right? Through week after week because you're paying for that risk pretty fast. Yeah. And then if it runs, then, you know, it's all good. If not, then the risk was covered mostly. So yeah. Yeah, it's usually not like it's not 100% covered, but if like I finally get one lot off, it's like 40% covered. You know, I'm just like, I'm covering my ass a little bit no matter what. Unless I'm really, really wrong about that position when I put it on for NQ, I'm at least 30% covered on the risk. But with ES, that just wasn't working also. And then in the summer on NQ, it also stopped working because, you know, the EAT, the EATR of a five minute candle went down to like six points at one time. So. So when the ranges get tighter, you guys are basically full clip on the whole position. And then from a take profit standpoint, what does that look like for you? Oh, I know. I disagree. I think when the ranges get tighter, I'm, I'm even more half size at a time. Oh, okay. 30% of the time because in a tight range, I'm like, I don't really know. This is going to go. I mean, today was a tight range for a little bit. Even and then yesterday, very tight range until it broke down. But there was a trade there. You could have bought that thing like six times before it failed on the seventh time, you know. So. But when I'm in those tight range trades, like, I don't plan to stay there all day. So I know something's going to happen. I'm going to need to pivot to. That also helps me in the back of my mind with executing that. So I'm like, I'll take half off here. I'll put it back on. Yeah. I actually just, when it's a tighter range because the stop is going to be smaller, I put on more size just to kind of make that work. But I definitely take profit sooner too. I think yesterday was actually a really good example. A 10 to 15 point move was good enough for me to start scaling out. even up to like half the position because I mean, value area was like 25 points. So we're moving back into it. It could just stop and like you said, you could have bought or sold the same spot like six, seven times. You scout that enough, maybe like two, three times, like your day is done. Maybe even after two times, your day is done. I just use my risk based on how much of a dollar amount of the risk is and adjust the size. So if it has to be, if it's like a, we're talking 25, 30, 80, R and NQ, yeah, the size is definitely gonna go down to make it, you know, more adjusted. But then in the meantime, your runway for your TP is so much wider. If I'm working with like a 20 points stop, that runway is at least like 40 points for me. And it's not because it's too R, it's just what I've noticed. It's gonna be like 40, 50 because for me to be okay with an entry where it's a 20 points stop, it means the markets moving pretty well and to cut it sooner would pretty much kill my entire process over time. So volatility, yeah, plays a huge factor, insizing intake profits. Last, this March, February, March April, something, we know super crazy. If you were taking profits prior to 50 points, you were just robbing yourself blind. - Oh yeah, it was 50 points like blink of an eye. (laughing) That was crazy. - Yeah, I'm saying. I hope to never ever see that again. (laughing) - Oh yeah, and people on, we might see it again. - That was my favorite. - That was my cash. - That was a, (laughing) - Raise cash. - Raise cash. - It's a piece, boogie. - I've also never understood that. It's like from fucking where, man. (laughing) What's this mean? - Well, that's a part, no one ever gets to sell. - So you have to sell, you have to have stock and you have to sell it to raise cash. - Yeah, no, I can't do that. I have to call the volatility robot and that's gonna be all paying in my ass. Not doing that. That's why I trade every day, so I don't have to do that. I'm like, I have cash, it's over here. It settles instantly, this is awesome. - I think risk is-- - All right, so that's why I'm from your standpoint, your, your basically, I mean, everything I've seen from Stream, you're just all in on the first. - It really depends, so like every skill. - In a super slow market. But if it was the same environment, let's just say instead of a 200-point range day, we're getting like a 400-point range day, I'm definitely not going all in. So if the range is tight enough, I'm going full-size one-go. But if there is movement, I'm gonna do like maybe half and then another half or like a five and a three, or maybe a three into six, into eight. So it varies on how things are moving. And then if it's to a point where, okay, my, the spot I would like to be in has came and went. And I have to get in here now if I want access to the trade still and it's higher. I'd have to obviously size less. Give it room in case it comes back and then tack on more there or let the market go in my favor, pull back, build a nice base and use that base as the new stop point, right? - Yeah. - It has to be those specific parameters. There's, it's actually very black and white for me. It's dependent on, all right, what access has the market presented to me? And which one did I actually take? If I'm in full, full-size one time, that's the spot I'm happy with. If I'm not, this is not ultimately where I want to be and I need to allow extra room to be able to get the rest on. And ideally, I don't want it to be, if now the market's going against me and then I'm averaging down, all the, even though it's a better entry, I'd like to see it just work, form a pullback that's like a high low or lower high. Just show that the order flow is willing to move with price now instead of just passively bidding or offering the same spot, like show some initiative activity so that all right, now we can get the rest of the size on and risk where they, where the counterparty failed last. So that, that's how I do it. But yeah, I expect it to be that way. Like in a perfect world, we all get in after confirmation, right? Like this is said all the time constantly, but that's not. - It's the worst thing that you can do in my opinion. Like you just, you like your animalistic instincts that are getting triggered when you say that shit. - I always frame it in two ways, right? - If that's true, then why do I still get stopped out? (laughing) - There you go, that's very good. It's very good. Look outside your window, man. Is there a black van? - Yeah, exactly. - Yeah, it's always two things. It's confirmation risk versus price. And I appreciate confirmation risk, but I prefer price risk for sure because when you're wrong on price risk, it's a lot less damaging. And I always say, I always think of it as like, you have the ability to buy the tickets for cheaper. And I would rather do that and lose a lot less if I'm wrong on the idea, then buy a more expensive ticket. And now, yes, there's more confirmation, but we trade order flow. We already have a good idea of what can proceed that specific confirmation, which is usually just like what, a break up a swing or a move past a passive bid or offer. If you're seeing what usually proceeds that you could put some on, so that's what I would do. I would put some on. And if the range is that wide where I can't just full clip it right there, I'll just get some after. And it's already being paid for by the size that I put on that's now in profit. And then I can just use that to put on the rest of it. And by then, you've got some at very good prices. And the rest is when it's confirming. And from there, I can just, my finger is always just on the flat button until my trade really takes off. And this is something a lot of people on stream probably noticed too. Yep, I will not really sit around until it gets to my stop. If I'm in a trade where I've got some on and now I'm adding with more confirmation, to me, confirmation means this thing better be moving now. That was, quote unquote, confirmation. If it's still doing the same old thing, I'm either gonna take those ads off then and there, go back to where I was earlier on the size. I'm just gonna flatten the whole thing. And if it goes without me, I'm gonna gauge for a pullback. If it's really the move we're getting, the market's going to pullback and form another base. And that's where I'll initiate the new trade. I kind of think about confirmation in general, like the autism meter meme, where it's just that, you know, that oscillating meter. Sometimes it, sometimes you're like, whoa, this confirmation is really good. And sometimes you're like, ugh, this can be good. Is this really confirming? Maybe I need to see some more info. It doesn't mean you can't put a half a position on there. You're never gonna get full confirmation until, like it's over, right? Yeah, yeah, that's another thing about quote unquote, confirmation. So price traders, it'll be a break of a swing or a break of a candle or something like that. For me, it's just simply seeing, all right, well, let's just say you're long. And on the upside, there's just reloading offer. And, you know, maybe there's absorption, you can easily identify, okay, well, this is where there's a passive player. To me, confirmation would be, all right, you're seeing a reloaded offer. Now, if price can clear that offer, that's one, you know, they've cleared the passive offer if they filled it, there's more buying. But I want to see a reloaded bid step in where that offer was reloading. So that to me is a willingness of the bid that I am banking on, actually showing that they're going to step higher because, well, the market needs to go find some sellers for them now. And that's how I visualize it. How about you, Leo? Are you executing exactly the same as you always have been? Have you ever found times in your trading when you changed to either you execute at all? My take is probably more controversial. And I was actually interested to hear Anthony Cardelli's interview with, was that the, the words of wisdom, words of wisdom, have you ever forget? You know, at the end of the interview, he said, what's the worst piece of trading advice he've ever heard? And his answer was that never add to losing position. And the word like DCA and adding to losers, has such a seriously like negative connotation. I understand completely why. But I think what's lost in that picture is that you can have an area of execution where you will, you have the freedom, you know, let's say you're gonna trade 10 lots, right? And your area of execution is 20 points wide. For example, does it matter if you put two on and then another two and then five and then You know a and then the rest of the whole 20 as long as you stay within that risk range and your risk on the whole trade is consistent and I would say no it doesn't the problem though is that because these things have been repeated as the gospel truth you know if I were to get on stream and Start a position with two lots and add into it with 10 and either you know Well, nobody's gonna criticize me for adding to a winning trade that's going right? Oh, yeah, oh dude. We can't we can't we can't add to a loser on stream. That's too bad true of tropic sure I 100% 100% but That's to be honest It's been a challenge for me because I do not Necessarily think that anybody is going to ever get such a good entry That is worth putting on the entire side the entire position risk in one click I just don't believe that to be true. Well, it's also possible that you have a Perier discipline when it comes to Actually realizing that risk when it's time to cut it and I've seen you do that when you're like you you're also scaling out When it starts to look worse so like on the meter thing you're kind of adding and subtracting positions Based on your conviction meter as it fluctuates in that zone, right? Yeah, I think that that is superior discipline But is ultimately like the way to execute because you're getting to use your discretion on your confirmation too That's true, but then you know that you got these phrases losers average losers Don't ever add to losing trade, you know DCA this that whatever all people just lie in eyes Paul Tudor's For no fucking reason But you know, you know what it's like yes, those are true statements And I think Crudelly made a great point when he basically said you never add to a loser when you're a full risk Yep, that's the difference. Yeah, that is is a huge difference I think there's a huge difference between what one might call a loser right very nuanced term a loser versus an invalid dated trade It's yeah, it's five points a loser, you know if you click in to and it's you know and you're long and price goes down another five points You know I go I've seen even better or flow better information I want to put more on this position and it's still within the range where this trade idea is right Why would you not want to put more risk on when the pictures clear and you can get a better price? As long as it's within that invalid, you know that validation range. Yeah, I don't think that's such a hot take honestly I do I Guarantee you if I executed that way on stream There would be nothing but trolls. Yep, for sure. I'm a hundred percent will you on that it will be hot goss As someone who's probably been streaming in front of you the longest. I don't think that's ever viewed positively by the wider audience the second you start I mean in an NQ range Maybe maybe give it ten points anything more than that. It kind of looks like you're Being an idiot and the position against you and you are just whatever you want to call it Not you're not necessarily scaling into a the friend order. You're Martin Galing the funny thing about that is that never Have I ever never have I ever? I've never been in a position where any level that I look at from a market standpoint is to the tick And I don't believe that to be true either you know like the mid the five minute mid It's a range the week open is a range if the whoop is a range is a range around that price level because the thing is is that The minute you can mark out a level is the minute that that level is Going to have Fuckery around it. Yeah, you know, it's never gonna bounce to the tick Sometimes it will something but usually that's part of the fuckery That's the thing is it bounces off to the tick There's a I'm for sure not even in that trade. There's no way for me to to get in there I'm you to see it do all that stuff like for to me. Yeah, like like Leo It's every level of his own is simply a reference just because there's a line or a box there doesn't mean I actually Expect to get a position inside of that area I just want to see what the market does in regards to that area like what decision do they make right because it's supposed to be an inflection point and if they're going to If it's gonna play out how you expect I mean, I don't I'm not clamoring for an entry in or at that spot And if it bounces to the tick dude, I'm just like are you serious? Well, so that's like how I'm slightly different as sometimes when I have Really, I don't know I'll call them higher conviction levels or kind of higher conviction ideas around a level I'll put a couple of contracts on and then just watch I'm too chicken shit for that no way But then you know, I'm also willing to just cut it if it just doesn't like if it's just like Doesn't work, you know cut it like nothing happened, you know like Nothing happens cut it or scale scale down. Yeah, well you also I mean, I've also seen you do this you're like, ah convictions down. I'm just gonna cut this trade and then it works So like both can happen. I mean, yeah, for sure, but you just have to lean on You know your conviction level and trust yourself at all times and I think that's part of the like really advanced discipline that comes I mean we do the same thing long enough you develop that intuitive component to it and yeah If it's like hey conviction seems pretty low. I'm just gonna cut it and it works. I mean shit You know and bats a hundred right sometimes the market does show that lack of conviction and all of a sudden one seller a buyer decides you know what Fuck this I'm punching a gas And that's where you that's where like when you have a little bit of risk on You're just that much more glued in and so when you see that buyer seller come and slam it Then you're like boom. I'm nail, you know like I'm hitting this trade hard and that can be Below your entry or above it right it doesn't need like we don't need to think of trading in such a black and white way Yep, I agree. Yeah, this is controversial. Where we just like this is another episode of just taking taken down tropes Yeah, you know, I'm pretty Yeah, not I think about it. There isn't any content that shows scaling in but I guess also because You know, there is a lot of concepts from now a lot of it is price-based Mechanical you know triggers for entry stop based off of price action or candle. So it's it's just a one-go You're there. You're not but as order full traders the information is highly gradient and you would be what's the word? You'd essentially be cheating yourself in a way by not Getting the better deals right because we use auction market theory if we're in a zone where okay You look to you look for price to hold just because say you put on like Leo said two or three and It's going against you it's going against you instead of thinking like oh, it's not working. Well, you're still in that same reference Right now you're given the opportunity for better access and to let that go by because you know some guy Said if you're in heat you should turn off your chart immediately That's just it doesn't make any sense because yes, or the I Get like I do see where it's coming from but I don't know if that it helps I think that he isn't valid They're they're trying to protect young traders from just like adding forever and praying that the price comes back And they get out for break even like I get it. They're trying to un They're trying to undo porch times effect on America But I don't I I don't think that it works because I mean new traders just do that I think learning that that is not something that you can do is Part of like the first month or two of anybody trying to trade but is it Is it more about like how how you define when the trade has been validated or you are in fact wrong or is it more How to actually build into an entry around a high conviction area like Leo is saying like what I guess What is the is it more on the risk management side or is it more on the how to kind of build Exit like your style of actually building into a trade. I think it's both Yeah, I think I think it's but the emphasis needs to be on the first part where I don't think people Know where the trade is actually invalidated. I think that's the issue Mm-hmm. If you if you just determine that first then it should be way easier to be able to manage that thing Yeah, I mean if you know your plan of exit You always should or you should have a risk range or something. I think there's two things. There's entry range, right? And then there's where your stop should be. - Yeah, and it's all like the risk just has to stay consistent. That's the only thing that you're mapping out here, right? That's the only thing that you don't want to mess with because you don't, that's what gets you into trouble is trader when you start pushing your risk limits. - Well yeah, I mean, if you're trading a 10 lot and all of a sudden you're in 20 and your prices consistently going against you, you're probably doing dumb things. - Yeah. - You're not executing any strategy. You're, wish you're probably on your knees, hoping that something changes. - Someone that was on this podcast once said that they actually have been on their knees in front of the chart before. (laughing) - In a very long period of time. - In a very real physical way. (laughing) - There's only been a few guests on this podcast and other contributors, so I'll leave you guys. Maybe you can dig back through the episodes to find that gen. - And it's not weird. - It's not either of the ones on right now. (laughing) - Nope, sir, no, no it is not. Some of us that are on now, thrown hats, broken mice, but we have never kneeled to the screen. (laughing) - Kneeled to the screen. - Yeah, I think that's an issue. That's a huge issue is first knowing where your ideas invalidated, like truly knowing, and then understanding that it is now invalidated. And yeah, a lot of beginner traders, I mean, we're all guilty, I was definitely guilty, right? You're just averaging down, you're like, no, it'll turn, it'll turn, and then, you know, by the time it turns, you're in the dirt. With this, there's like, yeah, so I actually realized this doing that view up video or whatever, 'cause I had to go over this stuff so many times, but the times went, so this is what drives me crazy, this is what drives all new traders crazy forever, is like, you get out of a position, and then you see that position work. Like I put work in quotations, like, it goes the direction that you think that it's going to go, right? And I was looking at invalidation points, going back through these old sessions, getting ready for that video, and it was like, I stopped rabbit hunting that, and it became obvious that if that worked, if price did go in the direction that I thought it was going to go, it wasn't because of the trade that I was in, it was because of a different trade that came after that trade that worked. So I was still in the wrong trade, it just went in the correct direction, and if you can be honest about those moments, and realize that maybe this trade that you're in isn't a trade, maybe it's the one right, after it, and that's okay, that would maybe clear some of this up, I don't know. - That's actually a, yeah, that's a good way to think about it, for sure. I've gone through this with a lot of people, too, where the situation, I mean, yes, we all know it, too. You're in the trade, and then it takes your stop, and then it starts to reclaim the range, and then it works. So like you said, these are two very different trades, two very different setups, two very different opportunities, and then they're like, well, I didn't want to reenter because what's the difference between this and revenge trading or whatever that may be, but yeah, the way I see it would be, okay, you're in the trade, it sweeps you out, but then during that sweep, you can see in the order flow that, well, as they poked outside of that range, that you used as an invalidation point, the market actually then confirmed, showed its hand that there's no interest to trade down there. And if that's the case, the trade is actually, the new trade is actually the better trade. If you liked that first one, you're gonna love the second one. (laughing) - Yep, exactly. - That's why, yeah. That's how I see it. (upbeat music) - People always ask where they can watch us trade real time, not recaps, not highlight reels, but live. That's exactly what we do on Ninja Trader Live. It's where our crew is on the mic every week, breaking down setups, reacting to price action, and putting real trades on as the market moves. Hit the link in the description to subscribe to the Ninja Trader Live YouTube channel and watch us stream weekly. Come trade with us, be a part of the action, and catch the moves as they happen. (upbeat music) - All right, so why don't we go transition now? - Okay, okay. - To take profit strategies. - Ooh, okay. - I am a firm believer that as you gain experience and understanding on what you wanna see when you get into a trade, then you should also use that same experience and understanding to get you out of a trade. And I don't think that isn't necessarily true. That should be used for newer traders. So I think personally, if I was brand new starting, I would layer into my trade now I want it, keeping that risk range, et cetera, look all the things we talked about. I would have a dedicated take profit system. I would take it mechanically, 15 points, 30 points, 65, and then if I have any left for more, a runner. - Nice. - I do 64 so I get you left right in front. I'd like to be right on your fill, but possible. (laughing) - I think that can build good habits and reinforce good trading 'cause nothing fill is better when, you've got a lots on or 10 lots on, and you get five off, you've paid for the rest of the risk. It's like you've made a little money, whatever. That's gonna reinforce that you need to be consistently taking profit not too soon, not too soon, but you want to be in that mindset. My, this is my, as an intraday trader, you want to be in that mindset of, a, taking profit and be thinking about the other side of the position that doesn't mean, if you're long, you're not like, oh, where would I short here? It would be where's the potential resistance or where I think sellers might show up here? - Yeah. - And you might want to cover into that range a little bit. But fresh off the streets are starting out. I would use a fixed TP system, right? You just want to build that discipline, and you really try to practice trading and executing, and not necessarily thinking about, did you maximize your whole take profit on that trade? - Right. - You should just be consistently boom, boom, boom. - Yeah, you can give yourself reverse FOMO, for sure. - Right. - If you get way deep into it, you can hindsight yourself into a combative state if you try hard enough, so don't do that. But I also don't think that experienced traders that is bad for experienced traders to use that same approach either. If you have a 15 point stop, and you're always using a 25 to 30 point take profit for your first piece or whatever, or you're one to one, or one and a half to one, whatever, whatever that thing is, if you're consistently doing it, it's not a bad thing. Personally, I just like to, I'd like to manually exit trades. So when I enter a position, I have a stop that automatically goes in, and then I just scale out of it. Just like, - I don't think it's a bad system for anybody beginner to advance, because it's more easy to bake into a real process because it's more mechanical. I've had a lot of discussions with the new traders who are like, okay, let's just say I use, first you gauge your stop, where does the stop need to be? And now you extend that times two, which would be your TP, so it's like, oh, you have a flat two R. Let's just say for example, it's a two R. It's not a one to one, one to five. It's a two, whatever, all of them are good. I do think one R is extremely underrated myself, but let's just say for a sake of an example, it's two. - That's another hot take, by the way. Just letting you know. - Yeah, I'll actually die on that sword. I think one to one is extremely underrated. - It's a hell, it's not a sword. - It's just a point. - Whatever. - It could be a sword on a hill. - Fall on the sword. - Yeah, you fall on the sword on the hill. You could be on the hill to help you fall on the sword. - I'll roll down the hill and into the sword. It's all the same. (laughing) But yeah, I think the issue then that people have is, oh well, because the stop is so extended, I don't know if the market will get to that TP, then the reality is, well, the trade's not as good as you think it is. That's actually not a trade you should look to get in. So everyone's so fixated on whether a trade can work and the fact is they can all work. You can close your eyes and smash the button and maybe you have a 50/50 chance, but we're not looking for a trade that can work. It's you have to make it really make sense. You have to have a wide enough runway in that trade thesis so that a 2R isn't like, oh, I think it can go to R. I wouldn't settle for that. If I'm looking for 20 points, the trade should be like, 50 points is still very reasonable. reasonable for the trade. It's not, hey, I think this can go like 20 to 30. I wouldn't even take that trade if that's gonna be the cap of the runway before a hard resistance or anything like that. So it's something that people don't really pay attention to. I feel. - I think what I do is a combination of both. I think when I'm, I don't know, some of this is like what counts as taking profit versus managing your risk on your initial entry, you know? 'Cause I feel like sometimes, like this happened on ES today. I was in three lots and you know, the trade started to work and then a seller showed up and was kind of fighting with me. So I'm like, okay, I'm gonna take one off at this seller. It was only a point and a half, but I'm like, I wanna take some risk off 'cause I see this guy up here, you know? Like is that just managing the initial entry or is that taking profit? I would consider that managing, just managing the initial entry, managing the conviction, managing, you know, the, yeah, my conviction in the trade. And then beyond that, I just try to get half of an average rotation, which is around five points. I guess the only other thing I use for just gauging like how much meat is on the bone for trade is just range expectations, but you know, we all use those. So. - I actually look at, so I'll say it's not profit-taking or this, to me, it's still overall trade management. And this is why, so if you're in the trade and then, you know, before you would like them to appear, a seller appears. So to me, it's never, I actually only see it as two things, putting risk on or taking it off. So you put risk on as your entry. Taking risk off could be a TP or a stop. Both are the same idea to me. And as price is moving in your favor, yeah, we're gonna say TP, but to me, as price is moving in, it's getting closer to an area where the counterparty might push back, I'm not thinking of it as, okay, let me book profits because at least I wanna be paid something. It's more of, all right, now, at this moment, this trade is not the same trade anymore. I'm gonna take some off because this is an entirely different situation. So in some instances, like you might know, oh, you got three lots, but just one point further, this guy appeared that I'm guessing you didn't expect, right? Yeah, I was just like, oh, cool, blue tape, just showing up out of nowhere. I'm like, oh, cool, what's this dude? At that point, that's a whole different trade. So in my perspective, it's all right, I'm gonna take as much size off as I think I should because this isn't the trade that I thought it was. If I had known, a seller would appear just one point ahead of me. I might have even just not even been in this trade. So I'm gonna take the risk off in size accordingly, or I'll just find because, hey, I don't like this anymore. So it's, some people might be like, oh, why would you take it off? You're already in the trade. You're cheating yourself by taking it off a point when your risk is like three, that doesn't make any sense. In my lens, this is not the trade I thought it was, and I don't want this exposure that I have now. So I'm going to adjust it or eliminate it. That's the thing that I feel like most people are missing when they're thinking about this stuff in context is, you really are, I mean, people will get hindsight stuff so much that their program to be like, well, you should have done this, but you're not able to know that shit before it happens. So the trade that you're in, the moment you hit the button, like that trade becomes a different trade every 10 to 15 seconds. So it's not a trading view chart with black and white candles and a green box and a red box. That's not how the reality of trading doesn't - It's a trade with order flow. - There's so much noise everywhere, you know. - Yes. - Someone's doing this here. Someone's doing that there. Things are changing quickly, and, you know, I like to adjust quickly. That's why I just get out of trades quickly. Like I'll just flatten that shit or scratch it or whatever because I don't want to be ever in the position where it's gone far enough for me to feel like damn, that I should have just cut it earlier and I'd be able to reenter here and now, right? Instead of, fuck, this trade can still work. It's close to my stop, but it's already did the sweep, but I'm like 12, 13 points in heat. And then I'm always like, I should have just cut it off when I was five points in heat and I saw the order flow already turning. And now I can always have just gotten a new position down here at 13 points lower or wait until they resolve what the hell they're doing here and climb back into the range. And these thoughts just keep coming in and one day I decided I'm gonna close the window entirely on the possibility of these thoughts coming in ever again. And that's why you see on stream, like I have really narrow stops and it's not because I'm trying to get cute and do just like 360 no-scope shit. It's because mentally it's going to undo me like within that same trade setup. And I have to leave that window closed. - So I'm kind of, I guess I'm mixed 'cause I have full clip in and out defined, if I'm trading NQ, three to five minis and I'm in and out 20, 30 points. And I may be very happy with that and call that a session at the end of the day. So I'm sometimes very good at kind of just taking that first good entry, good setup and it moves my favor and I'm out. And I will shut down my computer and do something better with my life. And that's one of the ways or reasons I think I'm still here today is kind of having that mindset of like I don't get the the fomo of like, oh yeah, it also ran another 200 points in my favor after that and I covered for 20. Like obviously we all have those trades, we all have those days, but I just kind of trade my plan where it's constantly evolving of my ability to kind of scale out in profit. Today was a good example of me doing it very well in an ES short with the trend to the downside and I have other days where I fumble back completely. I think X, Y and I were talking about that last week on stream today where I let it round trip me and I caught basically the entire move in the direction and just I'm holding maybe I took one off and I'm holding onto two, three runners trying to scale out and it ends up not hitting some of those profit targets and comes back to bite me. So I kind of go back in my mind either way on, okay, when should I be doing stop break evens, doing like trailing in profit up the ladder as well because we're just taking things off and kind of scaling out at different levels. Like what point should I move the entire position? 20, 30 points in my favor if it's in, you know, 50 points in profit and NQ. Like I'm constantly battling that and still working on that. And I think that that will never be over 'cause I feel like it's constantly changed for me year after year that I've been doing this. It's always a little different on how I like to manage it. So I think part of it is volatility too. Like what is the expected range, you know, how far does this trade actually have validity to continue going in my favor, things like that. So usually-- - Yeah, the vibes are a key point, aren't they? The volatility. - The vibes is very key. When volatility comes back, I'm probably gonna be able to full clip into maybe only like 15% of my trades, maybe even 10. It's just, it's too crazy for me. Like with normal volatility. - Yeah. - It's too crazy. I would literally just get chopped into DLL. (laughing) Like no joke, everyone. It just happened that way. - Yep. And DLL is not a good place to be. That's not a fun place. - Try to get it wrong. - DLL? - We ball been there. - Oh yeah, there's no problem with hidden it, but any fun. - I've seen my own friends there. - All right, well, this has been season two, episode three, painting the tape. Thanks everybody. See you next time. - See you later. - Bye, chat. - How do you-- (laughing) (upbeat music) (upbeat music)