Simply put, I'm going to highlight all of the necessary steps required for you to finally become a profitable trader. Let's jump right into it. If you are unprofitable right now, I highly suggest you drop everything that you're doing and you just start doing 1:1 risk-to-reward ratio. And I'm going to explain to you why. And if you don't have a strategy right now, then I highly suggest that you choose a random strategy off the internet, whatever it is, whether it's a break and retest, support and resistance, ICT, order blocks for value gaps, whatever it is that you would like to trade. And also just do 1:1 risk-to-reward ratio. Here's the thing guys, you can go ahead and back test it right now. If you do 1:1 risk-to-reward ratio, even if you have a random trading and strategy, you will have around a 50% win rate. Go back test it. Take 100 trades, 200 trades, 300 trades, whatever it is required for you to verify that a random strategy 1:1 riskreward ratio will have around a 50% win rate. You will be a break even trader. That's way ahead everyone that is starting off right now in this trading industry. and it's way ahead the majority of people that are watching this video right now because most people watching this video right now are still blowing their trading accounts and therefore random strategy 1:1 risk-to-reward ratio 50% win rate you'll be a break even trader. Now what we just did is we just chose a random strategy and we just traded it 1:1 risk-toreward ratio and we have a 50% win rate. All that is required and I need to remind you guys that the strategy that we chose is not optimized is not refined. We just chose a random strategy of the internet. So all that is required right now to become profitable is to add just a little bit of an edge onto it. That's it. That's understand one more thing about the charts. That's it. If you understand one more technical behavior of the charts, you will be a a profitable trader. That will be the added edge to your 50% win rate. You'll have more than a 50% win rate. And guess what? You're finally profitable. So that's it. One will get you a 50% win rate, a break even win rate. You add a small edge onto it. You just understand one more thing about the charts. Then boom, you're finally a profitable trader using 1:1 risk-to-reward ratio. So that's step number one. Now there are people that are going to disagree with this and there are people because I posted this on Instagram before I come here to YouTube to see people's reaction. And there's one guy that said, "Oh no, he's wrong because you might use a 1:1 risk-to-reward ratio and you can still have a 20% win rate using a 1:1 risk-to-reward ratio. You're not going to necessarily have a 50% win rate or a break even win rate. you're not going to have that. You can have a 20% win rate if you use 1:1 risk-to-reward ratio. And I laughed when I read this message. Number one, I laughed because that guy is wrong. No, if you use 1:1 risk-to-reward ratio, you're most probably going to have a 50% win rate. That's number one. Number two, the reason why I laughed is because if you are so lucky to the point where you choose a random strategy and you do one to one and you have a 20% win rate, then all you need to do is to flip it. That's it. And then you'll have an 80% win rate. So you buy when your strategy tells you to sell and you sell when your strategy tells you to buy. That's it. If you are so lucky to land on a 20% win rate, 1:1 risk-to-reward ratio strategy, all you need to do, as I said, flip it and then you have an 80% win rate trading strategy. And therefore, 1:1 risk-to-reward ratio will always be the easiest path to profitability. Because as I said, if you back test and you have around a break even win rate, then all that is required is to add a small edge onto it to understand one more thing about the charts for you to be profitable. If you back test and you have a 20% win rate, let's say for some reason you chose a strategy that is highly unprofitable and it has a 20% win rate and you're using one to one, then all that is required is for you to flip it and then you'll be profitable. So, in both ways, whether I'm right and you have a 50% win rate, or I'm wrong and you don't have a 50% win rate, then guess what? It's the easiest path to profitability because you either flip it or you add a small edge onto it. Either cases, this is the fastest path to becoming a profitable trader with a 1:1 risk-toreward ratio. Now, step number two for almost every trader after 1:1 risk-toreward ratio is that traders would want to let their winners run because they're taking 1:1 risk-to-reward ratio trades and they're seeing that there's a lot of their trades that are running a lot further than 1:1 risk-to-reward ratio. So, they're like, "Okay, you know what? This further distance, I actually want to catch it. I want to start letting my winners run in order to catch more profits per trade." And therefore, that is step number two. Now, traders seek letting their winners run in two different methodologies that I'm going to speak about. And both of them are wrong, by the way. And I'm going to teach you the right way to letting your winners run. So, I will start with methodology number one by the way, I'm going to tell you a story about it. Last year, I believe like a year and a half ago, I had a student in the mentorship and he said that he was trading a certain strategy and it's not working out. And I was curious. I wanted to see what's not working out about it. Part of figuring it out, I told him to basically take a trade in front of me. Just show me how he takes a trade. What he did is he went to the markets. He found a bearish trade. He took it. He placed a stop loss in a certain area, placed a takerit in another area down there. He was selling the markets. So I looked at him and I said, "Well, why did you place your stop loss here and why did you place your takerit there?" He was like, "Well, I placed my stop loss above these highs because I believe that if the market broke these highs, then my trade idea would be invalidated and therefore I placed my stop loss above these structural highs because right there is when my bearish idea is wrong and the market would turn bullish and therefore I'm totally wrong about the charts." I was like, "Okay, that's fair. Why did you place your takerit down there?" He said, "Well, I want a 1:3 risk-to-reward ratio." So what I did is after placing my stop loss, I took my takerit and I placed it 1:3 risk-to-reward ratio distance away from my entry. I was like, so you place your stop loss in a very logical and structural manner where your trade idea would be invalidated. But for your takerit, you choose it based on the amount of money that you would like to make. That's that you would like a 1 to3 risk-to-reward ratio. So let's place the takeprofit at 1:3 risk-to-reward ratio. So, you're choosing to take profit financially and you're choosing the stop- loss technically and logically. Is that right? And he remained silent. He shook his head a little bit and I saw on his on his face that he's understanding where the mistake is. And then I continued butchering him, of course. I was like, who told you that the market is going to run that far in your direction? Who told you that the market is going there? You just placed on a random take profit based on the amount of money that you would like to make. No one told you that the market or there is no um let's say uh microeconomics or macroeconomics or fundamentals or even technicals that tell you that the market is going to run there. You just placed your take profit as I said based on the amount of money that you would like to make for that trade. And that's the mistake that the majority of traders make. They simply want to let their winners run. So what they do is they calculate in their head the amount of money that they would like to get from set trade. whether it's 1 to3, 1 to four, 1 to5, whatever they're comfortable with, and they're like, "Okay, you know what? This trade, I'm going to take this trade, place my stop loss very logically and structurally. And for my takerit, I'm going to place it 1:3, 1:4, 1 to 5 risk-to-reward ratio away." So, most of you guys that choose your takeprofit in a financial manner, not in a logical technical manner, which is a mistake. And I'm going to teach you how to basically anticipate where the market is going and placing your takerit there as opposed to placing it just at a random area where you'd like to get a certain amount of money whether it's 1 to 3, 1 to 4, 1 to5. All right, I'm going to teach you that. By the way, guys, speaking of the mentorship, I just opened the August class applications in August. I'm going to have more free time and therefore we're going to be taking 10 students as opposed to the usual five students that we take. And therefore, if you'd like to participate in those classes, feel free to tap the link in the description. So, as soon as I told my student that he's placing his take profit in a financial manner, not in a technical or logical manner, and that's wrong, he was like, "Well, Roy, how do I go on about choosing it in a logical manner? I don't know where the market is going to go, and I don't know how to anticipate where the market is going to go. I've been placing my takeprofit at 1:3 risk-to-reward ratio since I started trading. I never learned how to anticipate where the market is going to go. I was like, very well. Then we go back to the initial idea of 1:1 risk-to-reward ratio. When you're trading with 1:1 risk-to-reward ratio, you don't have to anticipate where the market is going because it's simply a 1:1 risk-to-reward ratio. Even if you get a small retracement from your area of entry, you win the trade. And therefore, you don't have to anticipate where the market is going. So you use it for now because it is the safest way to trade because you don't have to anticipate where the market is going from a longerterm perspective. And as you are using 1:1 risk-to-reward ratio, you measure for every trade that you take, how much does the market run beyond your 1:1 risk-to-reward ratio. You record this area in your journal, in your track record. For example, I take a trade right now. It's 1:1 risk-to-reward ratio. I close it at 1:1 and then the market runs let's say up until 1:4 1:5 and then it comes back to my stop loss. I go to my journal. I'm like, okay, I took this trade. It's a win. It's a 1:1 risk-to-reward ratio. And this trade ran 1:5 risk-to-reward ratio beyond my 1:1 risk-to-reward ratio. You record this number for every trade that you take. You gather 200 300 pieces of data, 200, 300 trades, and you have recorded that number 200, 300 times, you're going to see something. For some of your trades, the market will run 1:2 risk-to-reward ratio beyond 1:1. For some others, the market is going to run 1 to4 risk-to-reward ratio beyond your 1:1. It's not going to be the same number always. All right? This number is going to be different for some trades than the other. For for some trades, the market is only going to run 1:1 risk-to-reward ratio in your direction, hit your takeprofit, and go immediately to your stop- loss. And therefore, it's going to be different numbers for different trades. What I did next is I started what I call a comparison analysis. So I took the trades that ran only 1:1 risk-to-reward ratio in my direction and I took the trades that ran 1:2 risk-to-reward ratio in my direction and I took the trades that ran 1 to3 risk-to-reward ratio in my direction and I compared those three different type of trades together. What I was trying to figure out I was trying to figure out what type of trade only allows the market to run 1:1 risk-to-reward ratio. What type of trade allows the market to run 1:2? What type of trade allows the market to run 1:3? Let's say I started studying like let's say the fundamentals of the trades that ran 1 to three. The macroeconomics of the trades that ran 1 to three. The way price action unfolded before my trade ran 1 to3. I started studying everything about every type of trade and I right now guys I have a dynamic risk-to-reward ratio in my trades. I know the trade when I take it. I know whether this trade is going to most probably run 1:1 or 1:2 or 1:3. I know how much is it going to run and therefore I place my takerit based on what I believe this trade has to offer because I studied all of my uh trades and as I said I did a comparison analysis between the trades that only run 1:1 only run 1 to2 only run 1 to three and I just figured the differences between them and now when I look at a trade I know that okay this trade in my analysis this trade usually runs one to three so I'm going to place my takeprofit at one to three this runs 1:1. This other runs 1 to2. Repeat solution number one. You choose 1:1 risk-to-reward ratio and you make it profitable. After you make it profitable, you can stick to 1:1 risk-to-reward ratio for life. But the majority of traders go the route of okay, you know what, I want to let my winners run and I want to benefit from those additional movements. So what you do is you start studying the area in which the market goes beyond your 1:1 risk-to-reward ratio. As you study that area, that area is going to be different for every trade that you take. For some trades, it's going to be 1:1 just that. For some other trades, it's going to be 1 to2. For some other trades, it's going to be 1 to three. It depends on the trade that you take. Once you accumulate this data, you group all the trades that run one to three in in one batch. You group all the trades that run one to two in one batch. You group all the trades that run only 1:1 in one batch. And you do a comparison analysis of understanding what about these trades make them a 1:1 risk-to-reward ratio trades? What about these trades make them a 1:2 risk-to-reward ratio trade? What about these third batch of trades? Make them a 1:3 risk-to-reward ratio trades. And once you start understanding which trade in your system runs 1:1, which trade in your system runs 1:2, which trades in your system have a 1 to3 risk-to-reward ratio, you can start using dynamic risk-to-reward ratio, which is placing your takerit in whatever area you believe the trade can run towards too. So whatever the trade has to offer not based on the amount of money that you would like to make no based on an logical technical analysis of what you believe the trade has to offer based on your statistical analysis that you have done before. I hope solution number one is clear for you guys. I try to make it as clear as possible. Now let's move on to methodology number two and why also methodology two is wrong and what is the solution for it. Now the second way traders try to let their winners run is by tightening their stop loss. Let's say you've figured out where your take profit should go. You figured out where the market runs on a usual basis. You're like, "Okay, I want to get the most out of that movement. I want to get the most money possible." So, what I'm going to do is I'm going to tighten my stop loss to put it very tightly to a point where with this takerit right there, I can get a 1:6, 1:7, 1:8, 1:10 risk-to-reward ratio. This is how traders try to milk the most profits out of the markets, especially order block traders. You see them all the time. They take a trade at the order block and they place the stop loss right above the order block very tightly in order to get the most out of their trades. I have a few things to say about this. First thing to say about this is very tight stop losses you will be spreaded out very easily. Like you take a trade, this is your entry and this is your stop loss. It's that close and your spreads are like this. You take the entry suddenly your stop lo your spreads just widen a little bit and they hit your stop loss and then the market moves in your direction. you will be spreaded out a lot and as a result those accumulated spreaded losses will make you lose your edge very easily and therefore that's number one. Number two, the decision to tighten your stop-loss is a financial decision. It is not a logical, a technical, a fundamental or a macroeconomic decision. It's simply a financial emotional decision. I want to make the most money. So, let me place my stop loss right here. There is no logic that if the market goes up into this area right here that this trade is invalid or your idea is invalid or your line of thinking is invalid. So the only reason you're placing your stop loss that tight it's because of financial and emotional reasoning. And as I said for the take profit issue taking decisions from a financial perspective is bad. Every decision that you make in the market should be from a technical, logical, fundamental, macroeconomic h aspect, not from a financial aspect of okay, I'm going to try to make the most money I can possibly make. That's the second thing that I want to say about this. The third thing that I want to say about this, most traders who go for very tight stop- losses are usually aiming for like 1 to8 risk-to-reward ratio, 1 to 10 risk-to-reward ratio, because otherwise you wouldn't have to go for a very tight stop-loss. If you're going for a 1:1 risk-to-reward ratio, you don't need a very tight stop-loss. So, most traders who are like trying to get 1:10 risk-to-reward ratio will tighten their stop losses. Those are the kind of traders that are tightening their stop-loss. And therefore, I have a thing or two to uh tell you guys. Listen guys, for all of you trying to hit very high risk-to-reward ratio trading strategies, I'll tell you why I prefer a lot less risk-to-reward ratio strategies. Listen guys, if you have a high risk-to-reward ratio, then you have a very low win rate. If you have a very low win rate, it means that you are losing the big majority of your trades and you win, let's say, one big trade, one 1 to 10 risk-to-reward ratio trade every now and then. Now, that 1 to 10 risk-to-reward ratio trade is enough to cover your losses and give you some profits on top. That's no issue. Profitability is not the issue. The issue is reliance on one trade. What do I mean by that? you are reliant on that one big win to make your profits. If for some reason you miss out on that one big win, you're So if you wake up sick for the day, let's say, and you decide, okay, you know what, I don't want to trade for the day and you're just you have such a luck to the point where today is the one big win day and you're sick and you don't want to trade and you just miss out on it, you're If you see the trade and you hesitate and you're like, "Okay, you know what? I really don't want to take it." and you don't take it and it turns out to be your one big uh win that you just missed out on, you're Therefore, you're very reliant on that one big win. Which is why I hate these models because it puts you in a very psychological dark space where you want to catch every single trade that you see because you're afraid of missing out on that one big win that comes out every now and then. And therefore, it's a really bad space to trade from. And I don't believe that profitability can be sustained. using such high pressure models. That's number one. That's in terms of uh reliance. Number two, we talk about the draw down perspective of these strategies. Very low win rate means very high draw down. Very high draw down is enough to ruin your work with any prof. And it's enough to ruin your relationship with any investor that you're trying to work with because no investor and no problem firm would want to work with a trader that accumulates a lot of draw down before that one big win. So let's say you're working with an investor. The investor won't sit there and be like, "Oh yeah, yeah, he's accumulating all this draw down. He's he's uh down in the minus right now very much and I'm just going to be patient and wait for him to get into the positive." No, they will panic and they will take that money away. So you ruin your relationships when you do that. Also I want to add that since you are reliant on that one big win if it so happens that you miss it then you will fall back into losses again and therefore you will accumulate even bigger draw down than the draw down that you are usually used to and therefore that bigger draw down will also be enough if the first draw down didn't ruin your prof relationships or investor relationships that second draw down that you're getting right now because you missed out on that big win and you're continuing to lose then that second draw down is enough to ruin your relationships with investors and with problem firms. So, it's it's all in all it's a model because you can't afford to miss out on any trade because if you miss out on the win, you're You're going to fall back into losses waiting for your next big win to come through. And therefore, that's why these models are Now if we talk about lower risk-to-reward ratio like 1:2, 1:3 or even 1:1 risk-to-reward ratio and a higher win rate then you are not reliant on that one win which means you are not psychologically pressured to trace every single trade that you see because you're like it's okay I have a very high win rate a lot of the trades that I take are wins and therefore I don't have to follow and catch every single one of them to be profitable it's okay I can miss on a miss out on a win here I can miss out on a loss there all that because I have a high win rate and I'm not reliant on that one trade to be profitable. So I don't have to catch them all. I don't feel pressured and all that which is for me a better model to use. It also has lower draw down since you have a higher win rate which basically saves your relationship with investors and with uh profirms. That's my advice to everyone that is trying to trade very high risk-to-reward ratio uh trades. So the last thing that I want to talk about in this video is after traders decide their stop loss and decide their takeprofit, what they do is they start moving to more like advanced mechanisms. They're like okay at some point during my trade I want to trail my stop loss to break even point and protect my profits. This is like an idea that uh traders might have. And I've recently had a conversation with a student of mine in which I taught him my system and I told him to to just use it like stop loss. I don't have I don't trail my stop loss to break even point. And therefore I told him to just take a trade, place a stop loss, take place a take profit, that's it and trade. Now he came back to me and he was like, okay, Roy, yeah, I'm using your system and I was analyzing his journal and I was like, why is there BE trades in your journal? He was like, well, after the market runs 1:1 risk-to-reward ratio in my direction, I trail my stop loss and I place it at break even point. And I said, who told you to do that? Why why are you doing that? and he said, "Well, it's just like I'm more comfortable with it this way because I don't want to be in profits and then go into a losing trade." Like, I would hate for that to happen. So, once I'm in profits, I just trail my stop loss to break even point in order to protect my profits. This is the idea that he had. And I looked at him and I said, here's I have a lot of different thoughts right now about the topic because we talked a lot. But I looked at him and I said, well, first of all, there's no data and no statistics that prove that you would be more profitable if you trade your stop loss to break even point at 1:1 risk-to-reward ratio. You're just doing it again for financials and emotional reasoning. You don't want to be in profits and then incure the loss of being in profits and then moving towards a losing trade. You don't want to get that feeling and therefore you run away from it by trailing your stop loss to break even point. But there's no data that proves that trailing your stop loss to break even point after 1:1 risk-to-reward ratio will make you any more profitable. So I know that a lot of you guys as well are trailing their stop losses to break even point just because you want to feel better about your position. You don't want to feel like you have anything at risk. It's it's an emotional decision. It's not a technical and logical decision. What I would suggest is that you test it instead of adopt it. So I would take 100 trades and then I would trail my stop loss to break even point after the market hits 1:1 risk-to-reward ratio. Then I would take another 100 trades batch and I will trail my stop loss to break even point once the market hits 1:2 risk-to-reward ratio. Then I would take a third 100 trades batched where I never trail my stop loss to break even point and I will see the results of those different strategies. What happens when I trail my stop loss to break even after 1:1? What happens if I do it after 1 to2 and what happens if I never do it let's say and then I will test out those different strategies those different mechanisms. And guess what guys, I did that test myself and for myself I would be the most profitable not ever trailing my stop loss to break even point. That's my strategy. That's how it behaves. Anytime that I trail my stop loss, the reason for that is that there's a lot of trades in my strategy that go into profits and then come back into my break even point and then go again into my full take profit. And therefore, that's the way a lot of trades are being presented in my strategy. And therefore, if I trail my stop loss, I would be out at BE and then the market would run in my direction. That's for my strategy. And you have to do a test yourself. So do multiple tests. What happens if I trade it at 1:1? What happens if I trail it at 1:22? What happens if I never trail it? As I said, for me, if I never trail it, I would be the most profitable. And therefore, I have adopted a strategy where I never trail my stop loss to break even point at any point during my trades. And therefore, that could be the same to you. Take your decisions logically and statistically. Stop taking them from an emotional and financial perspective. That is the main idea of our video today is that every decision that you take should be logical, should be statistical. And that's it guys. I'll talk to you soon. If you enjoyed that, feel free to subscribe and I'll talk to you guys in the next video. Goodbye.