---
title: 'Market Mechanics Ep 20: Where to Place Your Stop Loss & Take Profit'
source: 'https://youtube.com/watch?v=JRiiQWeooMc'
video_id: 'JRiiQWeooMc'
date: 2026-08-14
duration_sec: 1283
---

# Market Mechanics Ep 20: Where to Place Your Stop Loss & Take Profit

> Source: [Market Mechanics Ep 20: Where to Place Your Stop Loss & Take Profit](https://youtube.com/watch?v=JRiiQWeooMc)

## Summary

This video is a trading lesson focused on position management, specifically where to place stop losses and take profits. The instructor emphasizes that professional traders focus on exits, not entries, and provides a structured approach to managing trades based on market structure, liquidity, and logic rather than emotion.

### Key Points

- **Amateur vs. Professional Focus** [00:03] — Amateur traders obsess over entries, while professional traders obsess over exits. A good entry alone doesn't make you profitable; proper exit placement and trade management are crucial.
- **Trade with the Trend** [01:15] — Beginners should trade with the internal and higher time frame order flow. The most obvious price action is often the most high-probability trade.
- **Manage Expectations** [02:42] — When trading counter-trend, manage your expectations. Don't set unrealistic targets; understand where the trade could go wrong and where to exit.
- **Avoid FOMO and Chasing** [04:30] — Never chase price. Chasing leads to poor entries and wider stop losses. Wait for price to come to your point of interest.
- **Liquidity Sweeps** [09:37] — No liquidity sweep, no entry. Wait for liquidity to be swept before entering a trade, as this often precedes a reversal or continuation.
- **Exit at Likely Price Points** [12:13] — Exit at the price point where the market is most likely to go next, based on your research, not where you hope it will go.
- **Time Frame Alignment** [14:01] — Place your take profit on the same time frame as your entry or one time frame above. Avoid targeting swing trade levels when scalping.
- **Stop Loss Placement** [16:27] — Place your stop loss at a price point that invalidates your trade idea, such as above a protected high (for shorts) or a few pips above the supply zone.
- **Plan Before Entry** [19:46] — Position management should be part of your plan before you enter the trade. Know where you'll exit if wrong and where you'll take profit.

### Conclusion

Effective position management is about structure, logic, and data, not emotion. By placing stops and targets based on market structure and liquidity, you can turn good setups into consistent outcomes.

## Transcript

learning how to enter, but almost no time learning how to manage the trade once they're actually in. And that is a huge mistake. Because amateur traders obsess over entries and professional traders obsess over exits.
A good entry alone does not make you profitable. It's just half of the If your stop loss is in the wrong place, your take profit makes no sense, or your trade management is emotional, then you can have the best entry in the world,
but you will still fail. So, in this lesson, I want to break down how to actually manage your position properly, including where to place your stop loss, where to place your take profit, and how to think about trade management in a way
that is structured instead of emotional. So, with that being said, let's go on to your stop loss and your take profit. For context, this was the first trade I've taken in April. Yeah, this was the first trade I've
Yeah, this was the first trade I've taken in April, right here. Uh and I think we got about, yeah, almost three hour on this trade itself. through like the thought process for this.
Once again, from entries to exits. Okay? So, like everything and I'm just going going through that. So, if you look at this right here, internal structure is bullish, swing structure is also bullish. So, if you're looking for
shorts right here, you must really manage your expectation, fences and try to target like all the way down here. It just doesn't make already going counter against everything. So, first of all, do not do
this. Do not try this at home if you are a beginner. If you're a beginner, stay you to trade against the internal order flow and also against the higher time frame order flow. Basically, just trade the price action, which is the most
Because most often than not, the price action, which is the most ob- obvious to action, which is the most ob- obvious to you, is also the most beneficial to you. Okay, so write this down somewhere. The price action that's the most obvious
to you, it's often also the most uh it's also also the one that is like the most high probability, right? So, in this case, as a beginner, I'm going to try to look for longs, which means I'm going to look for
here to trade with this internal structure. traders, for the advanced traders who want to, you know, take advantage of the counter trend, right? Get scalps just like this.
And bear in mind, if you are trading against everything, you want to manage against everything, you want to manage your expectation. wrong, and also where to get out if you are
This is something that I like to nail on. Is that amateur traders focus on entries, professionals focus on exits. Because exits is what make you the money or cause you to lose a little bit of
So, exits is the hard part, right? Which means expectation, you try to target like here or here or here or some random place there's a very high chance that you're going to get stopped out
sooner or later, and you're going to like kick yourself in in in in the balls, right? Just because like you place your exit at the wrong place. So, second tip, if you are trading this sort of setups, manage your expectation.
All right, manage your expectation. Now, let me just go through the entry, right? So, why would I enter for a sell right here, even though it's counter against everything? It's because if I'm scalping right here,
this is actually pro internal order flow for me, right? So, I'm actually trading with the internal order flow. It's just that I'm looking at it with from the lens of a scalper. I'm looking at price on the 1-minute time frame.
So, yeah, super duper aggressive scalp. This is a scalp. This is scalp a mixture of scalp and an intraday trade, right? So, once again, let's let's take it one step back first. If you look at a structure, bullish. Internal structure
market shift, internal breaker structure, everything is bullish right And just by doing this alone, I know that this is my swing low and this is my swing high. Right? So, this is the range that we are trading within.
And right now, when I see price being super extended just like this, like you guys, like I told you guys a thousand times, I don't ever take FOMO trade. This is a lesson I've learned the hard way from
losing a lot a lot a lot a lot of money. I don't ever look for long position when price has already made a significant move just like this. So, if I'm not looking for longs and I'm want to look to like scalp this move
right here, what I want to do is to play the counter trend, right? I want to play the pullback to like each one of these demand zone right here. Because like I said, because of gravity, price will eventually starts pulling back. It could
demand zone. Whichever demand zone that is within this discount pricing. That's just how the market fundamentally move, right? That's just why price move. Okay, like that's it. So, if that's the case,
then I know like with a high degree of certainty that price will make a pullback to at least this demand zone. price is going to pull back to this one, but I know for a fact that it's going to
fact that we got this overextended move to the upside. And this is the nearest 5-minute demand zone. So, if at some point of time, price
starts running out of buying momentum and buying pressure right here, guess what? It's going to come back to this gas station right here at this next 5-minute demand zone to get a more fuel before it continue pushing to the
And if there's not enough fuel at this gas station, then it's going to continue going down to the next gas station, which is this demand zone to get more fuel and then move to the upside. So, long-term wise, higher time frame
bias wise, I'm still bullish. No doubts about that. But short-term, I'm bearish going to start pulling back. And if I know that, why don't I play this move to the downside? Since I'm a scalper, right? I'm looking
to get in and out within a few minutes, within a few hours. I'm not interested in holding this trade for long. Right? So, this is where I'm thinking to myself, okay, I'm I'm trying to play play this pullback right here.
But now, the next question becomes like where is the optimum point of entry? predict the top of the market. If you enter for a sell right here, there's a pullback and just continue going up. And then you'll get stopped out. Right? So,
you want to make sure that you wait for extra confirmation. So, once again, I'm approaching this from a scalping standpoint. And since on a 5-minute time frame, I don't see any fractal low right here. The most recent
fractal low I can see is right here. Okay, so if price take out this fractal low, then yes, price is going to pull back to this area right here. But what about right now? If I don't see a fractal low right here, then my next
natural approach is to go down to my 1-minute time frame and try to identify my fractal market shift over here. So, this is where you can see. This is the last 1-minute fractal market shift. So, the minute price take out this low,
we know for a fact that price is going to pull back to this area right here, this next demand zone right here. And if I get an internal break of structure to the downside to validate this market shift, then boom, I'm going
pullback to the downside right here. Because this is where I know for sure, occurred and it's going to come down to this area that I have down here.
So, in this case, this is 3:30 p.m., right? So, this is like when London session actually opened, 30 minutes into London session. And over here, I was very patient, you know, not doing anything. In fact, I
literally just came back from the gym after doing like a push day, and I saw right here. I remember I remember pulling up the charts and I saw price And I was just looking for my entry over here. I was just being very patient,
me. Once again, another tip, write this down Once again, another tip, write this down somewhere. Never ever chase price. Whatever you chase runs away. Same thing as money, same thing as whatever, right?
universe, right? Whatever you chase runs And the worst part about chasing is that you get a entry. If you chase If you chase price, you enter for a sell right here, you have to place a stop
entry. So, never ever chase price. Let price comes to you, right? So, do your will know that since we just got a I boss, validate this fractal market shift, internal structure shifted bearish, and now I'm looking for short
because once again, internal structure has shifted bearish. structure, right? Because I'm approaching this from the lens of a scalper. So, in this case, very patiently doing
right? Price has made this bearish candlestick right here. A lot, 90% of the retail traders, including myself last time, would enter for a sell right here. But now I understand liquidity,
"Okay, cool. Let me try to identify the liquidity points." Because another thing that Brett has said repeatedly in all of his lessons is that no liquidity, no no entry. No liquidity sweep, no entry.
So in this case, price does this, I'm not going to enter for the trade. Like where's the liquidity? Well, there's liquidity above this high. high right here, which means there's also liquidity being built up above that
high. So I'm waiting there very patiently waiting for that to get swept out. And also most importantly, I'm waiting for price to come up to my point of interest.
wait for price to come to you. And you wait for price to come to your point of interest. So in this case, price over here haven't mitigated my supply zone. So chill. The minute price mitigated my supply zone,
boom, now I'm interested. So now I'm looking for the aggressive entry in this particular situation. Why the aggressive entry? Because internal structure is on my side.
And this is where we can also see the push and pull inducements being swept. So this is actually a high probability scenario. side, then I'm looking for the conservative entry. Right? If the market
situation is just telling me that huh it's like it's like hmm I don't know whether I'll enter for aggressive more entry model right here, then I'll probably go for the conservative entry model. But in this case, because I'm so
confident that the internal structure is really good bearish and we are in this all the liquidity in the world has been swept, I'm more than happy to deploy the aggressive version of the entry model.
So the minute price went up there, swept the high right here, swept the high on the left-hand side, right? We got both liquidity push pull inducement being swept. Price comes up to this supply zone, internal structure of bearish.
All the stars in the entire universe is literally lighting up for me to actually literally lighting up for me to actually enter for the trade. This right here is a A setup. I wouldn't call this a A+ setup, but I'll call this as a A setup.
you know, give me like a bearish confirmation just like this on the mini price mitigated this zone, and then this is where I look for shorts, and I place my stop loss above this supply zone. Now, the next part I want to talk about
is the exits. Let me give you a tip. All right, let me give you a tip. Often too greedy with my exit. That's the problem right there. Let me give you guys a tip. When it comes to your exit, you basically just want to exit
you basically just want to exit at the price point in which, based on your research, price is most likely going to get to.
I don't think anyone has explained to me in that manner before, but that's it. And the key word here is based on your research where the market is going to hit towards next, not where you think it will hit towards next,
based on where the market is heading towards next. So, first thing is let's talk about the take profit, right? Which is where to exit if the trade goes well. Well,
this trade right here, and they're going to place their take profit like all the to place their take profit like all the way down here. price is just going to go down here." Right? Or what they tend to do is that
maybe they place like somewhere around here in the middle of nowhere. But like I said, this is not where the market is going to hit towards next. where is the market going to hit towards next for sure? What is the internal
structure telling us? What is the price action telling us? If I'm entering for a short right here, bare minimum, price is going to come down here. Okay? Absolutely no doubt because this is the next 5-minute supply
zone. I know, 5-minute demand zone. Okay, this is the next 5-minute demand zone.
if I'm entering the trade on the 1-minute time frame, I'm placing my take profit at either the next 1-minute demand zone or supply zone or the next 5-minute supply demand zone.
But, I won't try to target the next 1-hour supply or demand zone. There's a time frame misalignment. There's a mis- alignment of expectations there. Right? Because you can't be Okay, like you can if you're like
really, really good in terms of like, you know, identifying the structure. But, majority of the times, you cannot try to target where you would target as a swing trader if you're entering as a scalper.
can if you really understand what you're doing. Then this is where you capture those sniper entries, 1:50 R trade, whatever, which is incredibly, Majority of the times, you just want to manage your expectation and just place a
take profit on the time frame that you enter the 1-minute time frame, you place a take profit based on the 1-minute time frame If you're entering the trade on the 5-minute time frame, you place a take
profit based on the next 5-minute structural high or low or the next structural high or low or the next 5-minute supply demand zone. Trust me. Just by doing this one change to your entire trading plan,
you will reduce the amount of unnecessary losses. You will increase the frequency of you hitting TP. fundamentally just changed the way that I trade.
just be a little bit pessimistic when it comes to my TP. So, in this case right here if you are super duper conservative, one right here. You can just place a take profit right here. 1:2 are good
enough, right? You get out right there. But, if you're a little bit more 5-minute demand zone, right? Which in this case it's going to be like 5-minute demand zone right here. Because
the 5-minute time frame as well. Right? So, this is the next 5-minute demand So, this is the next 5-minute demand zone. chance that it's going to go to the next 5-minute demand zone, which is this one
right here. All right? Which is this other obvious 5-minute demand zone right here. Right right here. So, that's my best tip for you guys when it comes to your take profit.
Is to just place your take profit at the next opposing supply and demand zone or the next structural low or high that is either on the same time frame that you make your entry on or just one time frame above your entry time frame.
Now, for the stop loss bro, very simple. Like I always say, you just want to place it at a price point which invalidate your trade idea. So, it's like what is the price point that if price gets to
prove that your trade idea is wrong. Prove that your hypothesis is wrong. myself before I enter for a trade. Before I actually press the buy and sell button, I need to know exactly where I'm getting out if I'm wrong.
point? Well, it needs to be at some form of Right? It needs to be at a high that swept liquidity. Because that's the institutional level where price is most likely going to respect.
there's a chance that either a next liquidity sweep is going to happen shift bullish and my trade idea is wrong. So, it needs to be at some protected high or protected low.
And another thing is is it at like ideally I want to place it a few pips above the supply demand zone that I entered the trade on. Right? So, in this entered the trade on. I'll place it a few pips above it. I wouldn't place it
there's a chance for price to make a pullback and when it does you're going stopped out. Later on price will go down in a way. In this case using that that two logic in mind, right? Your protected high and low and also your supply zone.
This right here becomes the new protected high. Before this high has liquidity, where is the next protected high? It's going to be this one right there, swept the liquidity and then started going down. So, this is the
protected high. So, if this haven't been formed, I will probably if I enter somewhere around here or here, I'm placing my stop loss above this protected high since that's the highest point that swept liquidity.
above this high, this becomes the new protected high. loss a few pips above this high right here. high. And then for my take profit, uh no, and
the supply zone, right? So, in this case this is the supply zone that I'm entering the trade on. So, a little bit of breathing room if I'm actually placing my stop loss based on a
So, this could be like the worst-case scenario, right? If there say price did not sweep the liquidity right here and it's just a normal high. And in this case I got two choice. I can
either place my stop loss above the protected high right here supply zone. And if I place it a few pips above this supply zone, this will give me a much better risk-to-reward ratio compared to
placing it above this protected high. So, that is where I will go to the latter option and just place it above this high right here. So, the rule is if right there. If there is no protected high, place it
at either the nearest protected high that was formed in the past that was formed in the past or a few pips above a supply zone if you're selling or few pips below a demand zone if you're buying.
nearer, right? Whichever one that offers you a better risk-to-reward ratio. So, hopefully after this lesson, you can see that position management is not just something that you figure out after you enter for the trade. It should already
be part of your plan before you even take the trade. Like I said, a good trade is not just about finding the right entry. It's also about knowing where the trade is going to go wrong and where the trade
is most likely to react and how to manage it without letting emotion take over. That is why your stop loss should never where you feel you should be placing it at. Same thing as a take profit. It
hoping price is going to go up there, so I'm going to place my take profit there. And your trade management should never be based on how you feel in the moment. It should all come from structure, logic, data, and the story the market is
telling you. Okay, so remember, protect your downside, give your trade enough room to breathe, and make sure your exits actually make sense.
Because that is how you stop turning good profitable setups into bad outcomes. And when you combine a strong entry with smart risk management and a clear exit logic, that is when your trading starts
to become so much more consistent. So, with that being said, more concepts in the next lesson. And as always, remember you're just one trade always, remember you're just one trade away.