Mail account, smtp failure. How to setup mail box?

So I have tried to send mail from my mac, using the built in mail app. I am using a hotmail account, I can receive mail, but can not send mail. There pops up a screen saying "smtp failure" and I have to retype my password, but my password is correct. There is a problem with the outbox. I have tried to run Connection Doctor with red dots on hotmail account. Also, I deleted my hotmail account from system preferences, but it seems to be there still in Connection Doctor. Any suggestions?