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Today we start by looking at the 5 minute chart of SPY. He talks about an alert made regarding the 200 simple moving average (sma) and how that particular moving average generally carries a lot of importance. After polling the room to see who wants to go long or short, we set up our trade plans. As Clay scrolls the chart, we play out a scenario where we do NOT follow our trade plan and just merely ‘hope’ for it to go in our favor. We could have taken a small controlled loss or we could have gotten completely hosed. The only thing we can truly control in trading is how large our losses are.