Summary
Highlights
The speaker introduces the topic of taking profits in day trading, noting it's a relatively easy concept compared to other trading elements. He explains that profit-taking areas are primarily located at 'building blocks' on chosen timeframes.
The core strategy for taking profits involves identifying 'building blocks' such as order blocks, liquidity, and fair value gaps. These are areas where price is likely to react or fill orders. An example of a short position is used to illustrate setting profit targets at these building blocks.
The speaker details how he sets multiple take profit levels (usually three or four) based on different timeframes. For instance, if executing a trade on a 5-minute chart, he might look at a 15-minute chart for the first 'draw on liquidity' and then use building blocks for subsequent profit targets. He stresses that profit-taking should align with the execution timeframe.
Taking profits is considered one of the less critical aspects of trading, secondary to daily bias and execution. The speaker believes that if the execution point is good, price is likely to move favorably, and traders are often aiming for a 1:1 or 1:1.5 risk-reward ratio for their first profit target.
Further examples are provided, demonstrating how to set take profit targets using liquidity sweeps, break of structures, fair value gaps, and order blocks on 4-hour and 1-hour charts. The speaker reiterates that these building blocks act as 'price magnets' due to their high confluence for price to drawn towards and fill orders.
The speaker reviews a recent trade, explaining how he set his first take profit at a 5-minute order block after a 5-minute break of structure and a 1-minute entry. He concludes by emphasizing the simplicity and effectiveness of using building blocks on relevant timeframes as high-probability price ranges for profit-taking.