Original subtitles

Well, let's say you've made a good decision, right?

You've used your indicators.

You made a good buy decision.

You bought a security.

Right.

And now how do we maximize the profit out of that?

You know, by that we just mean we want to make profit on this.

How do we how do we maximize that?

And that's a key part of managing your overall trades and your trade rules.

And all that, along with reducing losses, is looking at targets of when we want to sell.

Because I answer that whole Agil question, you know, when do we cash in?

When do we how do we know enough is enough that we need to sell and book our profits and then move on

to another security or wait a week for another opportunity to be with that same security to buy in again?

Right.

But at some point it's gone.

It's doesn't go up forever.

You know, at some point you're going to sell and then maybe later get back in if conditions change.

But when you do that, when you cash in, I mean, sometimes you can go buy, feel, you know, it's

cloudy out today.

So I think I'm going to sell a lot of stocks.

I mean, I just feel like it, you know, that doesn't sound very technical analysis like.

Right.

Or I was very emotional, actually.

So that's that's the best way.

You know, there's actually better ways that you can do this.

And we're going to talk about that in this lesson.

Several ways that you can build some trading rules around when to maximize your profit and really how

to set up price targets.

That's the idea of this lesson, is when to when to cash in and book those profits.

Now, one of the common ways you can do it is you rely on your indicators, right?

You relied on your indicators to buy into a security, rely on your indicators to sell out of that security.

Right.

So they tell you what to buy.

They also give you cell signals as we learn in all these different indicators and tools we learn about.

And the benefit of using indicators is it gives you the ability to maximize gains.

Right.

You're you're using your indicator to tell you, you know, what is the right decision making.

Now, the challenge with that, of course, is sometimes indicators are not foolproof.

They can give false signals.

So you might, you know, might sell before you really should have or maybe you think you should hold

a little bit more, but really, you should have sold right away.

Right.

So you nothing's perfect in that.

But using your indicator will help maximize gains more so than maybe some other ideas.

So we're going to learn about that.

Also requires a challenge that requires more market monitoring time.

Right.

Because you've got to be a little bit more watching and watching for these cell signals to happen.

So you're gonna have to watch your security is a little closer that you have an investment.

And now we're going to learn about things like setting up stop loss orders and things to help automate

that.

So don't worry about that.

But even still, you want to start monitoring that a little bit more.

But there are other ways you could do it besides relying on indicator's.

For example, you could establish a profit percentage target, right, and you could say, OK, I bought

something in my target is a 10 percent return or profit on a trade.

So if I bought it, let's say 40 units, 40 dollars, my profit target is four dollars.

What's my total profit?

I want to make so I would sell at forty four dollars.

Right.

So I say, OK, I bought it at this.

I want to make 10 percent.

This is what I'm going to sell it.

So that's simple, right.

That's a benefit of it's simple to execute and enforces Delfs discipline to hit my 10 percent or did

I not have my two percent.

And once I hit my 10 percent, I'm selling.

I'm not waiting till 12 or 13 or 14 percent.

I'm waiting for 10 percent now.

It could be two percent.

It could be one percent.

It depends on how active a trader you want to be.

But in this example, you get the idea that I'm buying, I'm selling once I reach that percentage of

profit target.

Now, the challenge of that is you could miss out on extra profit or the security keeps rising.

Let's say you're on a strong uptrend and you've made your 10 percent.

But let's say this thing kept going and you were going to make 12, 13, 14, 15, 20.

You you missed out on all that because you sold right away, because you're good and disciplined and

you would set a profit percentage target to.

The other thing you want to be aware of is let's say you don't ever get to the profit percentage and

never gets up to 10 percent, then are you kind of stuck in a little bit of a sideways move and you

just it's just kind of stuck there or is now starting to reverse and go downward.

But you haven't reached your 10 percent yet.

You know, how do you get out from that?

So those are some things to consider if you're establishing a profit as a percentage target.

So one way to counteract that is to set a percentage of the range target so you could look at and figure

out the average high to low range, high price, the low price range, over a certain number of trading

periods.

It could be days, minutes, hours, whatever your trading range is.

And then you used indicators assuming you're trying to buy in or, you know, you're at or near the

low end of the range.

Right.

That's the whole idea of using an indicator you're probably not buying at the high end of the range.

Sometimes you can with momentum and all of that.

But let's say your your style is you're buying more towards the low and your idea is that it should

rise towards the middle or towards the upper part of this natural range.

So you indicators are telling you it's a buy signal.

So you determine the percentage of the range you want to capture the profit of, let's say, 50 percent

of the range could be any number.

Since you're buying at the low end, there should be more upside.

Right.

So fifty percent seems pretty aggressive, but you're still you're buying in and you're exiting at the

end of the range of fifty percent profit.

You're looking at the range there.

So this will make a little more sense if we look at as an example.

So let's look a percentage of the range target a target sell time based on this example.

So let's say you're over twenty periods.

The high for something is one hundred and fifty and the low is one thirty.

Right.

So that's the high and low over twenty periods.

So the range is twenty.

Right.

And one hundred fifty minus one thirty of the difference between the high and low and then the fifty

percent of that range.

Simple to calculate what's half of, of twenty.

You basically would be ten.

Right.

So if you're out that's your target.

So if your targets are 50 percent so you would sell at 140.

Right.

So I'm buying in maybe near the bottom of the range.

Maybe I'm at one hundred thirty, but maybe I'm buying in at one hundred and thirty five because I'm

not at the absolute low of the range.

But I know my range is this I so I get to one hundred and forty then I know I've reached my profit.

If I bought it at the absolute low like in this example in the fourth bullet point I'd be one hundred

and thirty plus ten dollars would be one hundred forty.

I'm selling at and I would have made ten dollars a profit.

But if I bought a one hundred thirty five I made five dollars a profit.

The benefit of this is you have a clear sell target.

Right.

You have an actual real number that you're going to look at it once it hits that real number you're

selling.

Right.

So you've built in that profit.

And fifty percent is just an example for many of you might want to look at 10 percent of the range or

twenty five percent of the range.

How wide the range can impact that to a wider range is going to have a higher, you know, absolute

no target than a smaller range.

So unlike in this case, for example, the range was twenty with a range was eighty.

Right now you have a wider range and that can make a difference.

So the benefit is you do have that clear sell target.

You don't have to think much.

It's like once I hit that number selling the challenges, the range can widen during that whole period.

You aim to be on the low end of the range, but maybe that range has now started a period where it's

now widening out or or possibly narrowing out to.

And that changes your your your basic number.

If it starts getting if you aim too low, you know, that might be a little bit higher number to reach

that you might not ever get to.

And if it's too narrow of a range, your target might be too ambitious or in some cases less ambitious,

such as another way to look at to either way, your range can change over time, too.

So the more established the range, the better the percentage of the range works.

Also, it's very common to have temporary pullbacks.

That does.

And that might mean a stop loss, might not that does not cause the stop loss to occur, then it can

make your range goal harder to hit.

So let's say we bought at one thirty five in this example, we're looking to get one to 40, but also

sudden we get up to one thirty two and there's a pullback back down to one twenty eight.

Now I've got further to go to get to my one 40, so I might end up holding the security longer or may

never get there to really realize my true profit.

So there's, you know, it's a nice, clear sell target, but there's also some challenges to it as

well.

Another way you can use Likit measured move patterns, you know, and this is kind of relate to indicators

depending on the indicator you're using.

But some indicator patterns have built in forecasting like ascending triangle or support resistance

lines, like we see an example here.

And so when you buy in, you're sending your price based on the price, on the pattern continuation.

So if I was looking at that support line, let's say and let's say I'm buying near the bottom, I want

to buy near the bottom, near the support line, I know that it's going to rise up hopefully to this

resistance line and follow the pattern.

And as I get up to that resistance line.

OK, now I'm going to sell again.

Right.

So that's my target is if I get closer, I'm picking a real number, a whole number or a number, an

amount that's close to that actual resistance line.

Once I hit that number that's near the resistance line, I'm going to sell I'm going to watch the pattern

continue.

And if it doesn't break through that resistance line, it's going to come back down.

And if it bounces back up off that support line, I'm buying it again.

And then I do the same thing again where I'm waiting for the pattern to continue.

And I'm going to go up to that resistance line again.

I would get out of this completely or maybe look at something different that it broke through either

the resistance or support line that showed that the trend here, which this is a pattern, continuation

trend in a narrow channel, basically, I would change from that, but I'm setting my pricing, my buy

and sell based on following the trend.

So the benefit of this is it's indicator driven, which is a good thing, right?

It's driven when we buy, it's driven when we sell.

So it's indicator driven.

The challenge of that is you're limited to your trades, to those patterns.

Right.

So you might have different less opportunities for trading because you're looking for that perfect kind

of pattern or certain situation that to occur.

When they do, they can be very rewarding.

And if you're not as frequent a trader and you're really looking for more of a perfect situation or

a better situation to be more confident in your trades, trading over a measured move over a move pattern

can be the answer for you.

But if you would like to make more trades and more profits, you know, less money, less profit per

trade, but do a lot of them, then this might be, you know, might have been limited to those patterns

and see less opportunity.

So everything has its strengths and weaknesses.

So these are some examples of ways that you can set up a rule or ideas behind when to sell or when to

get out to as well.

So not only is important as far as when you buy in and use your indicators when to get in, it's also

important and want to get out and you can use indicators to help you with that.

Or you can use some of these different profit measures were used in order bank and book your profits

and then keep doing it again and again to keep having more and more profits.

That's the name of the game, right?