O.K, so, here's a quick video just to show you something I've made use of recently.
So it's about my stop loss - you remember,
the stop loss is the thing that you set before
you open a trade - you set your stop loss which means that ... it's a pre-defined number,
and what it says is "If the stock ever hits this number, close my trade, get me out of it"
so that you can go off, go to the beach, go swimming, do what you want, and you're
kind of safe.
Problem is ... If you're in a stock which, like Ethereum - recently I bought Ethereum,
Ethereum went up and it was going up "yaaaaay, yaaaay", then it was going down ... "arrrrrggghhhh"
and I wasn't sure how far it was going to go down, but my plan was not to sell it - my
plan was to do what I said, and just sort of stay in it, hold it
until it goes back, because I believe Ethereum will go back up.
It currently is - it's doing O.K, but I thought it might take a while - it could take months,
and so I wanted to set the stop loss very low so that - in case, you know, it goes down
and I get triggered out at a really...
My stop loss gets triggered and I'm out of the trade and I've lost a lot of money - I
didn't want to close my trades with a loss.
So I wanted to work out - "How far do I think it will go down, and how do I set my stop
loss well below that?" you know - because sometimes in these markets, there are big
spikes caused by computers trading, and it will trigger my stop losses - I'll be out of the trade.
So it went down to 130... Ethereum.
But, I thought it could go as low as 80 so I set my stop losses at 40, basically your
stop loss can't be more than 95% of the value of the trade you made - so let's say I put
$100 in Ethereum.
So my stop loss - it sets it automatically ... I can't go more than $95, so if I lose
$96, that's it, I can't set my stop loss at $96.
But... you actually can... you can set your stop loss wherever you want after you've opened
the trade.
So look, I'm in my virtual portfolio at the moment, I'll show you what I mean.
If I go to this one, here - Tesla.
Alright, so...
Here we can see some things about the trade.
Here we can see it's Tesla, I've invested $100, here I bought 33 units.
this is where I opened, this is the current.
So when I opened this trade, it automatically - I pre-specified a stop loss.
You can do it ... This one here I think was a 15% stop loss.
15$, so yeah minus $15 is what I said.
I'm willing to lose $15.
It's only on 1 leverage, so it's a bit hard to show you here, but it actually makes sense.
So, the most it would let me set is $95 when I opened the trade.
But now that I've gone into it, and I went into it here, look...
There's stop loss, take profit, profit and loss ... This is what it shows you, so you
just go into the trade in your portfolio, find the thing which says stop loss, and just
click it.
And booom, that opens this screen here, I can see everything about my stop loss...
So from here, let's say I want to set it so ... to... amount.
So I want to - the most it will let me set before I open the trade is 95% ok, so that
would be, in this, because it's $100 with 1 leverage, that's $95...
I can, though, set it to 101 - I'm willing to lose $101.
Now, what it says - you'll see this little thing pop up at the bottom...
And it says "Note: An additional $1 will be debited from your available to-trade funds."
So you can set it as low as you want, as long as you have the money in your available funds
to cover the maximum amount you can lose.
So I could set it to, you know, minus 200 - I just have to put an extra $100 in, and
they'll take that out of my available funds and say "No no no, you can't trade with that,
just in case this trade goes completely wrong, your stop loss is triggered at minus 200 - we
want to make sure that that money's safe, because we need our money."
Alright, so if you set your stop loss beyond 100% of the position size you open, then they
will just take that money from your available funds...
And they ask you beforehand - they tell you, and if you go update - Boom - $1 has now left
from my available funds.
And that's how you do it - you can set your stop loss as low as you want whilst the trade
is open.
You can also do the same to your take profit - you can change your take profit as it goes along.
As your trade size increases - the more profit you have, the higher you can set your take
profit as well.
It lets you keep doing a certain percent above wherever you are now, so you might have to
keep adjusting.
That's how you set your stop loss...
Problems with that are that, obviously it's more risk...
The lower you set your stop loss, and the more money you put in to your stop loss, the
more you can potentially lose...
The other think is - look, in this virtual portfolio - it's ridiculous, I've got $91,000
spare money just sitting around...
Now, obviously, when you, in your normal portfolio, or in my normal portfolio, I don't have that
much money sitting around.
All my money is tied up in different trades, so when I - if I lower my stop loss, and I
add some of my available funds to cover that new increased stop loss, it means I can't
trade with those funds, and that can be a little bit annoying, you know...
You go to trade and you want to trade something - you think "This is going to work" but all
of your money's tied up in keeping your stop losses very very low...
That's something that you have to kind of trade off again, but it is possible, and a couple
of people have asked me, and I didn't know you could do it and I worked it out and it's
quite useful, you know - if you want to stay in a trade and avoid all of the potential
spikes and just stay low enough that none of them will hit if you think it's going to
go up again...
That's how you do that - that's how you increase your stop loss.