DislikedI'm prety new at this. I didn't know what forex was two month ago, but since then, I have been working full time doing nothing but Forex trading and looking for new strategies and learning indicators.
At first I didn't use stop loss and indeed I did make a lot of money in both demo account and a real account I opened since I though I was good.
But when gold started to crash and the whole market went crazy in most currencies, some positions that I had and I though it would go back up when it never did... wiped my accounts.
I agree stop loss...Ignored
I'm sorry you had a bad experience with your accounts. From all the research I did one thing that stuck with me was using proper money management in relation to the specific trading strategy that you chose. I believe the industry standard is something like using 1.5% to 2% risk. It would take a trading strategy catastrophy for an account to get wiped out with low risk trading amounts. For my strategy as long as I can sustain up to a 25% loss without getting a margin call I would be ok and wait for the rebound which the indicators on the longer time frame charts were projecting.
Just today I made 2 trades against my strategy and it went way south. From +11% profit to -16% loss in my account value. My practice account started out at $11,068 this morning and those 2 poorly timed trades I just left open and watched the balance plummet to $9,350 or so. But I waited patiently for 9 hours and the candles crept from -80 pips up to +12 pips on one and +3 pips for the other. I made a profit of about $114 on my practice account with those 2 trades. My account now stands at $11.182. I was trading on the 5 minute chart when I placed the trade. My indicators told me that it was going to go down but the indicators on the 15 minute, 30 minute, 1 hour, and the 4 hour charts said the candles should increase after the 80+ pip drop. I enjoy watching my father sit next to me and seeing these huge losses on my open trades. He about craps his pants when I do that. LOL! But I just lounge around and wait for the rebound. I showed him that those 2 trades were profitable just as I closed them out. The look on his face is hillarious. So far today's $1700+ loss and rebound on those 2 trades was a record breaker for me.
I should have taken some screen shots of that. Maybe next time. I save a detailed report from MetaTrader every day to keep track of my stats. So far from Sept. 19 to Sept. 29 (actually from Sept. 22 because I ignored this account when I was messing with a Hot Forex account) I made 31 trades. 26 profitable trades and 5 loss trades (darn trailing stop EA kept closing out my orders before the trades covered the commissions. LOL) Gross profit is $1,325 and gross loss is $16. Relative drawdown is 0.03% because I don't use stop losses except once when I panicked as mentioned in my earlier post.
I guess what I'm saying is that using stop losses with my strategy would without a doubt totally wipe me out in a week. It depends on what one chooses for a strategy to really determine whether using the stop losses is right or wrong so there is no real correct answer set in stone on this issue.
Also I really should add this caveat as well. my research I learned that statistically 90% of the traders that venture into Forex as well as commodity and equity trading end up losing money because they lack some basic discipline skills and fail to capitalize off others who lack those certain skills as well. Successful traders can ignore emotional and some psychological feelings when they trade. Emotion is human but it is a serious impediment to profitable trading and a major factor in generating losses. The markets are driven by fear and greed and both of those are what 90% of the traders fail to control within themselves thus why they lose money. Just like my father freaking out and nearly crapping his pants because I let my open trades drive my balance down so much today. Most people like him would panic and take a loss but I learned not to do that. I have to work so much harder trying to recover from the losses that I burn myself out trying to make a profit trading that way. I leave that kind of trading to the robot (which did nothing today, lol) I believe that realistically that I don't lose anything as long as the trade is open and dynamic. I've proven that point about a dozen times in the last week. That's why patience is a major factor in my strategy.