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Stop Loss vs. Hidden Stop Loss 26 replies

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Can someone explain to me everything about stop/loss.

  • Post #1
  • Quote
  • First Post: Feb 15, 2009 4:51pm Feb 15, 2009 4:51pm
I just keep hearing about how important it is.
Yes it is.
If you don't stop the loss, loss will stop YOU.

http://daytrading.about.com/od/daytr...a/StopLoss.htm

and related articles linked on that page.
Happy reading!
I really dont think it's worth using a stop loss can you list some personal reasons why you choose to use it, because I think any losing trades are unacceptable Ive been trading with a demo account for 3 days and I have made 81 trades and Ive had 80 winners when atleast 6 or 7 of my trades were down as much as 60 dollars on a 500 dollar account but I would just wait them out because I took a look at whats been going on in the past week or so and I made sure that for the trade to continue to lose it would have to completely ditch what was going on in the past weeks. So far Im up $574 on my $500 account.
Quote
... I would just wait them out ...

Last words of of the amateur trader.

You can't be sure that it will come back sometime.
If that's the case you're dead. End of story.
no because once it ends up reaching -$20 I will put in a sell or a buy depending on if its a buy or a sell and I will wait.

an example like if I put in a sell and the currency goes up a decent amount then I will put in a buy and this has been working so far.
Hedging doesn't work.
I can give you some quite funny example of traders
switching von one hedge into another and in the end blowing
a 10k Live accont.

http://www.forexfactory.com/showthread.php?t=119717
http://www.forexfactory.com/showthread.php?t=133137

If you hedge you could aswell just place a stoploss. There is no difference.
This way you can save the spread for opening another useless position.
Also how long do you want to hold that hedge? Could be it never comes back.
This would render you account useless because if you close one position you're
accepting a loss.
Quoting dave08666
no because once it ends up reaching -$20 I will put in a sell or a buy depending on if its a buy or a sell and I will wait.

an example like if I put in a sell and the currency goes up a decent amount then I will put in a buy and this has been working so far.
As long as price keeps ranging, it might work for a while.
However, hedging is plain suicide as soon as the market starts trending.
Unless you measure the whole yearly range (about 8000 pips on EURUSD) and your account and position size is able to sustain as much a drawdown... and even then it wouldn't be worth the risk.

By hedging you're locking losses instead of profits.
Trust me: I've been there... and it ain't pretty.
Quoting Tjpld
Last words of of the amateur trader.

You can't be sure that it will come back sometime.
If that's the case you're dead. End of story.

but wait!!! don't you know the market always comes back? i mean, it's not technically a loss until you close it out dude! lol.
  • Post #9
  • Quote
  • Edited Feb 16, 2009 12:23am Feb 15, 2009 11:45pm | Edited Feb 16, 2009 12:23am
Quoting blacksun1
but wait!!! don't you know the market always comes back? i mean, it's not technically a loss until you close it out dude! lol.
Indeed.
In fact, the hedges I had from april 2006 would have come back in late december... but when to stop hedging back so it can recover? What happens when you think the top has been reached, just to see it go further and equity reaching its minimum to allow at least another hedge? It's not as easy as it sounds... and it could be feasible... if at some point we never made a single mistake in assessing tops or bottoms, or letting emotions go by (not mentioning the fact that you can't be awake monitoring the trades from sunday to friday non-stop).

After eight months of no schedule days and cat naps waking to the sound of the price alerts it can really drive you nuts. And it lasted that long because I never had more than 17% of balance in total open positions... which almost became 100% of equity.

I finally closed it all, losing 90% by originally wanting to protect 30% of total balance... and the loss was so huge that even after a whole year sustaining a 70% average profit per month, I kept losing and losing thereafter because of the shock. I ended up with barely 2,5% left of starting capital (1% of capital plus profits at the moment of the hedge). It took me a whole year to recover emotionally, watching the charts and unable to place a single trade because of the fear extreme.

The only benefit was that I now have more than ten thousand hours of screen time.

Think about it.
Quoting dave08666
I really dont think it's worth using a stop loss
It's not. Don't believe what others tell you. They're all haters.

Quoting dave08666
can you list some personal reasons why you choose to use it, because I think any losing trades are unacceptable
Some use it to "preserve capital". Pfft! These idiots don't realize that you can't preserve what's been lost. Duh! And it is unacceptable to have a losing trade. Whenever I have one, I'll fire myself from trading.

Quoting dave08666
Ive been trading with a demo account for 3 days and I have made 81 trades and Ive had 80 winners when atleast 6 or 7 of my trades were down as much as 60 dollars on a 500 dollar account
These haters telling you you're pissing your account away should really shut up. After all, you have been trading for 3 days.


Quoting dave08666
but I would just wait them out because I took a look at whats been going on in the past week or so and I made sure that for the trade to continue to lose it would have to completely ditch what was going on in the past weeks. So far Im up $574 on my $500 account.
You found the holy grail. Step 1. Get in a position. Long or short, doesn't matter. Step 2. Wait. Step 3. Profits!
Not all sins are created equal
Quoting Jay Walker

You found the holy grail. Step 1. Get in a position. Long or short, doesn't matter. Step 2. Wait. Step 3. Profits!
Jay, can you write an EA for that?
Quoting billflet
Jay, can you write an EA for that?
Oh I'm sure an EA for that could be bought in one of them internet tubes.
Not all sins are created equal
billflet.....


Quote
Jay, can you write an EA for that?
What are the best times to trade the EURUSD
London and US Session. You will see the session times on www.forexfactory.com on the left side.

I assume you are talking about Daytrading. If you are a swingtrader it doesn't matter that much.
Quoting Tjpld
Hedging doesn't work.
I can give you some quite funny example of traders
switching von one hedge into another and in the end blowing
a 10k Live accont.

http://www.forexfactory.com/showthread.php?t=119717
http://www.forexfactory.com/showthread.php?t=133137

If you hedge you could aswell just place a stoploss. There is no difference.
This way you can save the spread for opening another useless position.
Also how long do you want to hold that hedge? Could be it never comes back.
This would render you account useless because...



well the first person had half of his account gone when he put in a hedge I wait for it to go at the most 10 pips out of my favor and then I wll put in a hedge. I forgot what the second person said but I dont think he was doing exactly what i was doing either.


here I will try and test it out a few more times and I will come back with the results.
"Just what do you think you're doing, Dave?"....."Look Dave, I can see you're really upset about this. I honestly think you ought to sit down calmly, take a stress pill, and think things over." - HAL 9000
Couldnt help it - it's one of my favorite movies

Quoting dave08666
here I will try and test it out a few more times and I will come back with the results.
Thats Ok Dave - we know the results.
good that you chk it out for yourself though or you wouldnt believe.
In trading, there is no bullshit. You either make money or you don't.
Quoting dave08666
well the first person had half of his account gone when he put in a hedge I wait for it to go at the most 10 pips out of my favor and then I wll put in a hedge. I forgot what the second person said but I dont think he was doing exactly what i was doing either.


here I will try and test it out a few more times and I will come back with the results.
Ouch!
Dave is a rookie.

He'll have to get burned before he sees the flaw in his approach.
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