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Low risk is not bad risk. What you mean with bad risk, anyway? 🙂
The trader's equation is the only one that can be bad (= negative) or good (= positive), depending on the three variables (risk, reward, probability).
@ludopuig 😊 Then how to see “low risk” just in this case?I think Probability is good(because in Bull
trend),But the stop at the bottom,so is big or high,risk not low.
@ludopuig I mean, I didn't always understand what the risk was in the previous video, was it the magnitude?
@ludopuig 😊 Then how to see “low risk” just in this case?I think Probability is good(because in Bull
trend),But the stop at the bottom,so is big or high,risk not low.
When Al refers to the low risk of a PB is comparing it with the risk of buying at the high (in a bull trend); tho both can be big, the PB's will be always lower. In general, when a PB has a good SB, you can place your stop just below it and, if so, your risk is really low and much lower than trading the high; otherwise, if you fear, for any reason, another leg down, then your stop is still at the low of the leg and you can only trail it once the MKT starts moving your way.
So PB1 needs a stop at the low of the leg but once you see the next bar you trail it up.
PB2 and PB3 a smaller stop below PB1 trailed up once the BO occurs.
PB4 and PB5 are bad because you have a Wedge and micro DT and should expect two legs down.
PB6 is at the bottom of a TR and bear bar so you can't use a tight stop neither
PB7 stop below PB6, MKT behavior is TR PA so both trades will end up as scalps
@ludopuig I mean, I didn't always understand what the risk was in the previous video, was it the magnitude?
Yes, watch the videos on trader's equation for the explanation