what's good YouTube it's your boy doyo back with another video today's video is part two to the basics of Futures now if this is your first time watching this video you need to click off this video and watch part one so you can understand these assets so you can understand the other information that I have on part one of this series because you're going to be a little bit confused um this part we're going to be focusing on risk management how to calculate ticks and points understanding the asset um movement how they how they calculate the ticks per asset and so we can understand our risk because that's the most important we understand that day trading is a um it's all about control risk like understanding what risk you about to put on and if you're putting on too much risk you can blow your account you can lose a challenge so once you understand the risk management behind every single asset then you can actually be okay with whatever money that you potentially could lose you know what I'm saying so again click on the first part of this video before you start this one because this one is mainly going to be mathematics okay if you're not good at math I'm sorry but we're going to have to get this done you know you got to understand this so let's get into it now before I get started write this whole screen down this whole thing write it down I'm give you a couple seconds so you can write this down because it's super important all right now let's get into it the assets on the left-and side it may not be the ones that you trade but these the ones that I'm going to use for this example these are the main ones that I'm trading so we're going to base are examples off of these two mainly I trade majority of these but we're going to focus on SP 500 and NASDAQ now if we go to the right hand side of S&P 500 it a tick management and it a 0.25 dollar per tick $12.50 so four ticks of this will be considered one point okay four ticks would be considered one point so S&P 500 moving increments of 25 on each tick each tick would be0 25 50 75 one point so every single tick 1250 another tick 1250 another tick 1250 now another tick 1250 now we at one point so four times a quarter would be a dollar so remember four ticks for ES NQ micros uh es and micro NQ all moving increments of a quarter on the chart remember this is just for the chart this middle column is for the chart so you can see the coordinates on the right hand side of trading view this side is is the money this is what we really care about you know what I'm saying this is what we going to focus in on but we got to understand how it actually moves per tick because if you look at gold gold moves 10 per tick so that mean we got to move 10 ticks just to get one point you get what I'm saying so if we times this by four which this would be considered one point and then we times that by four how much is that that's $50 per Point okay but it's four ticks to make a point for these though remember for these though four ticks to make a whole point but it's 10 ticks to make a whole point for gold now let's go ahead and go to the next screen because I want to show y'all the actual equation on how you can calculate your risk um when it comes to placing positions now again trading view is going to let you know this before you place a trade you know for anybody that trade on trading view it literally will let you know how much you're risking and it'll show you how much you're going to lose but this is mainly for people that want to actually understand this manually and don't want to wait on trading View and all of that okay let's go ahead and get to the next slide all right so on this part I'm going to test you to see if you can do the equation for yourself so you can actually be using your brain on when a good setup is there versus a bad setup now what do I mean by good setup versus bad setup based on your stop loss that's what we're basing off of for this illustration now let's use NQ for this example okay for this example we're using NQ and we got Sabrina right here she got $11,000 in her trading account she ready to go okay she ready to make some money in the Futures Market she see a supply set up she ready to sell now she got $1,000 in her Trad account and she want to use eight contracts eight contracts on a supply setup with a fivepoint stop loss is this a good play for her to take or a bad play for her to take I'm going to give you a couple seconds now remember you must understand what's the dollars per tick and remember inq move in increments of 25 just like es so if it moves in increments of 25 for tis would be a point how much is she risking all right let's go ahead and do the equation now $20 a point is for Nasdaq let's get that out the way right now $20 per Point she have a fivepoint stop loss okay so we're going to times that by five that is $100 right there if she use one contract if she use one contract if she use one contract she's risking 100 $100 for a fivepoint stop loss but if she got eight contracts on that how much is she Lo how much could she potentially lose now she could lose $800 now if you said that this was a bad play you're absolutely right you're risking 80% of your account no absolutely not if you go in on the supply setup Sabrina if you're watching this with eight contracts with a fivepoint stop loss you're potentially about to lose $800 on that 1,000 absolutely not absolutely not don't take that trade lower your contract size now imagine if she was trading imagine if she was trading the micro remember is one tenth of the 800 that would be considered a $80 loss if she was to take that on the micro my fault my fault y'all my fault not the es NQ cuz this is a this is a NASDAQ example my bad should be losing $80 if she was to take this exact same play eight contracts fivepoint stop loss but on the micro she'll be losing $80 you see the difference from a $1,000 account you're only losing $80 $8 that's what I mean by um you got to understand your risk and what you're trading this would be a good play if you was trading on a micros this is not a good play if she's trading on the mini you get what I'm saying so I'm going to take it to the charts and we're going to go through it a couple times on the charts and I'm going to wrap up this video but I hope that this is making sense the equation is first you must understand what is um the amount of money that you're going to lose per Point that's the important part per point remember if you looked on the previous slide um every tick would be $5 for NQ but we times it by four because four four tick is a point so that's $20 a point five point stop- loss $100 you feel me if you got a fivepoint stop loss and that's if you have one contract on it if you got eight contracts on it you lose a $800 get what I'm saying but on the micro you only lose $80 now let's go ahead and go on trading View and let's wrap up this video all right so now that we're on the charts this is probably the most important part of this video because we on the actual charts this is not the board you actually the setups understand the ticks and um just see it in real time so you can understand exactly what you're doing now for this example we're going to be using ES now remember previously what I wrote on the board you need to understand what is es uh dollar per tick so how much is it worth per tick and then you understand how much is worth per point and then you can do this manually without letting a trading view uh I guess calculate it for you now on the right hand side right here you can see that they will calculate it for you but the purpose of this video is just to understand the tick and a point system in the first place now um again like I said if you want to connect your broker you go right down here to trading panels right at the bottom click trading panels and scroll down the Futures Brokers will be right there once you scroll down you'll just connect your broker and you can trade directly off of trading view um it just really depends if your futures broker offer it not all Futures broker will offer you to trade on trading view so it's really a perk it really just depends on the broker um I currently use trade ofate I know trade station will let you trade on trading view uh& um interactive brokers like it's it's it's a few Brokers that will allow you to trade on trading view but let's get into it now um right here you would click the plus sign on the watch list and that will pull down the list you can see all the symbols that you need to add whatever you want to trade on Futures it's literally right here self-explanatory in the upper left hand corner you click indicators you can add your moving averages or however you trade vwob it's just a lot of things that you can add to your charts but that's besides the point let's go through a real life example of a setup that we're going to have maybe a Sixpoint stop- loss or a 8 point stop loss and we should know how much that is before we even uh calculate it with uh trading View uh risk calculator right here now um let's go ahead and find a setup real quick now we have this resistance set up right here this is a perfect example and remember we're doing this all manually um the market is closed so it's not going to use these correctly but when you do connect your um your futures broker to trading view these numbers are going to be shifting it's going to be different because the market is actually moving right now the market is closed so we're not going to use an example um with real life uh Market movement okay so we again we're just doing the math so we can understand exactly um what is the risk Behind These trades now say if I took a resistance set up right here for a sale and I had a let's say a a fivepoint stop loss okay a fivepoint stop loss First Take profit Five Points now from the previous uh writings that I had on the board every point for S&P for one contract is $50 okay for every point so if we have five points what is 5 * $50 $250 if you're only using one contract so this little small move right here is $250 if I put on one contract for that now say if I wanted to put on four contracts for that what is 4 time $250 that's $1,000 that's literally $1,000 so say if I put for for on for units you see the the USD risk that's $1,000 if I put on four contracts USD risk $11,000 you feel what I'm saying so um I hope that this is making sense also you can go on here right here and it would literally say uh five fiveo stop fivepoint Target you can also see at the coordinates right here that we're moving in increments of 0.25 like I said um on the board that's the increments that they're they're moving as literally 25 um and this is just a perfect example of a fivepoint stop loss you're risking $11,000 if you put on four contracts and that's pretty much it so um hopefully that this is making sense we can use another example on NQ real quick before we get off of here but again trading view is going to calculate it for you so let's go ahead and use another support and resistance setup all right so for the last example we're going to use NASDAQ um for this resistance setup so I'm going to mark on my resistance right here and we're going to put on our take profit and stop loss right here let's say let's use a 20 point stop so right here that's a 20 points that's important okay now let's go ahead and go for a one to two RIS reward I'm got to get it right okay whatever let's just use that one and two risk reward okay now if you have a one and two risk reward what now this is a super complex question right here if you have a one and two risk reward risking one contract on this how much is this worth on NASDAQ we're not going to focus on trading view doing it for us how much is this worth now let's do the let's do the equation NASDAQ moves in quarter increments okay NASDAQ is worth $20 per Point okay so a 20 point stop loss worth $20 per point is what $400 so if you lose this trade you lose 400 using one contract so the key is just to understand how much is it worth per Point okay that's the key so you won't overcomplicate this how much is it worth per point at that point you just times it by um how much um your stop loss is so how big your stop loss so $20 per point on NQ times it by the stop okay boom 20 * 20 400 cool that's not over complicated now if we have five contracts on this trade and it's worth 400 how much is that that's $2,000 okay literally $2,000 okay now let's go ahead and put this in the calculator so right here for units that would be five contract five contracts and how we convert points into tick all you do is just times it by four so this is this is points times that by four that will convert it into ticks so right here that would be 80 80 ticks okay cuz remember we converted 20 point stop loss times it by four that's how you convert it into ticks and it will literally convert into tick 80 tick stop loss is is equivalent to a 20 point stop loss okay now look they Lally calculated for you if you got a if you got a 80 tick stop loss which is uh 20 points it's $2,000 risk if it um hit your stop- loss based on you having five contracts okay so remember like I said trading view will always do it for you but if you want to learn this manually then this is just an equation you're timesing the dollar value per point which is NQ is $20 $20 per point you times that by what your stop loss is okay cool you get that number after you get that number you times that number by um the amount of contracts you put on okay so the amount we put on was five and your stop loss will be um considered a $2,000 um stop loss in a sense you know so let's do the math if our stop loss is $2,000 but we're going for a one and two how much is take profit if we win if you said $44,000 you're absolutely right okay so let's not over complicate this again trading view will help you um with the equation if you're not understanding um also if you want to rise your account of percentages trading view will also help you with that as well if you click right here they it literally say percentage risk I mainly uh risk my account far as USD risk but that's just me um you can put your take profit in if you want to uh it's just it's just self-explanatory definely play around with trading view before you actually go on a live account um just test it out again if your futures broker allow you to trade on trading view that's even better um but yeah other than that let's not over complicate this I hope these two videos has helped you um definitely rewatch this video and the last video over and over until it clicks and then definitely test out whatever strategy that you learned um on demo first and then it's time to actually get funded or get on a live account and start growing your account but uh yeah I hope I helped y'all on this beginner uh two-part series I don't want to go too much over it because a lot of people that watch my channel are experienced but for the new Traders these two videos are going to definitely help you and kick start your career with uh trading but other than that let's keep it going man um good luck on your journey and if you always need help just hit me up on Instagram I can always uh try to assist you if you're brand new to trading and if you're already experience I'll see you on the next video but that's all I got peace and love I'm out [Music]