Real Fx traders do not use stoploss

hi guys,

I've heard that pro fx traders who do not use stop losses and this had contributed much controvesy. Anyone who approve or disapprove please comment

There is no correct way to trade or to manage stops or lack of them.

Unless you are highly experienced, it is better to define your risk B4 you enter a trade. Best to do this in a hard way (auto stop) rather than a soft way (mental stop).

I place an auto stop 5/6 pips away from my actual mental one, just in case the broker can play games.

Also on the occasion that the market can move instantly 100 pips, you don't want to me caught on the wrong side.

It depends alot on your style of trading as well. I trade intraday with a stop of between 8 and 13 pips, so a move 50 /100 pips against, I cannot have. Though if you are trading a longer time frame, then it might B a different story.

Pro FX traders like who?? Or in general??

If you are talking about general Pro FX traders, It depends upon many other factors...Those people might be very well capitalized, and they might be having huge profit targets, such as 500+ pips per trade, so you will never see a stop with them less than 150-200 pips or so...That's my opinion of course, but if I am managing a $5 M account, I think that almost all my trades will be position trades for the long term since intraday trading with such amounts might affect the market and hurt me...Remember that as long as your trading lots increase, the entry and exits are more violent..


Thanks,

Nader

pro fx traders (the kind that work at banks, which it sounds like you are talking about) DO use stoplosses. maybe they dont place a stoploss order, but they have a mental stop. the reason they dont actually place the order ahead of time is because they sit in front of their monitor while trading, and they have good disapline to get out when they need to. they also have a good feel for order flow because they are on a trading desk.

I agree with what the others are saying here. Where your place stops depends on your trading style, but if you don't have a stop-loss at all, then there is a real risk is that you are reluctant to admit that you are wrong. No stops generally equals a high risk of ruin.

I always have levels where, given current conditions, I will let the market tell me I am wrong, as I want to be around to fight another day.

Even if you are willing to lose the shirt of your back, do you want to risk losing your car, house, and maybe your family, as you barrel through the doors of the poorhouse?

Hello Friends,

It is possible not to use a stop loss and stay safe on your account. Forex is a business and not a rich-on-demo escapist scheme , neither is it a programme designed to put anyones life into frustration. If you have been trying to trade without a stoploss and failing ,maybe,you have not been doing it rightly. If you are using stoploss ,it can even be a source of more losses,you enter a trade ,it hits your stoploss and reduces your equity ,you enter again it hits your stop loss ,making it look as if your acct is growing and reducing at the same rate. PLEASE this advice is not for everyone...it is for those who are ready to accept the bitter truth.it is not for scalpers,it is not for traders who trade below the 1hr time frame.it is not for those who trade fundamental but those who use it as a guide .Pls note this.

Now before I let you in on this, 1.you must have a very sound trade entry and exit judgement. What I mean is you must atleast understand market trend,wave patterns ,support and resistance levels. You must understand your chart not some crazy softwares or EAs or the use of indicators...no.2. You must have patience, you must be able to watch some position go against you for even days and you will not have to add anyother trade or close them in a hurry. You must have the same patience to watch a losing trade go back to win and getting to your take profit not halfway or running away with little or no loss -you let your patience get paid. 3. You must not always be in a hurry to make withdrawals from your account as this is not a good business ethic....cancel the framing of seeing your funds in the platform as water on a hot frying pan on fire. Instead start seeing how you can make your platform your bank.If you are with a very good broker your account is really safe.

Now let get practical,


With a leverage of 1: 500 ,If you have an account of $100000 and you use a minimum of 1lot or a maximum of 5 lots on that account without stoploss. There is no way the account will get blown out. And you do not add any more trade when you get to that maximum. Even if a trade goes againt you wait for it to recover,even if it will take weeks you wait, let waiting in patience be your style...that was why I said this post is meant for those who actually understand the rhythm of market flow not just for everyone.Its not for thosewho will trade agaisnt the trend or for those who claim they know market tops and bottoms. Now for an account of $5000 use a minimum lot of of 0.05lot and a maximum lot of 0.25 per trade. If you enter the trades and it does not give immediate profit do not enter more trades to exceed your maximum lot. WAIT WAIT WAIT . It is painful to wait ,but wait. Now learn to watch open position in negatives and believe that by the trade judgement which informed your entry that they will go back and give profit.

If you can do this for a period of 3 months to 4months you will see that you will never wire funds to your brokers again you will only be applying for withdrawals of your profit.In the process of waiting you can be studying your chart,study how to spot better trade opportunities and with the waiting you will start seeing yourself as a growing traditional trader who know what he is doing. It is not a crime to manage funds for people ,even with this method you can manage people funds but let your investors know that ....You are not in a hurry and they should also learn to wait. It is possible not to loss a dime from your account with this method instead you will see your account balance and equity growing steady. For those who say this method is very very slow. Even if you want your profits to experience a continuos compounding at the rate of 5% ,10% or 20% with this method...There is a way the calculation is done so that you do not get into trouble. NOTE if u use the normal compounding formular you will crash and start regreting why you have to continue with forex.

I have one last thing to say,

It has really gone along way to help me and I think if will help you too

It is advisable to use pending orders instead of instant execution if you have doubt about your entry.Personally I set my pendings 15pips away so that I do not get trapped

If you trade EURUSD,GBPUSD,GBPCAD and other pounds related pairs If there will be a news events on GPB 4:30 am EST do not trade during lodon open,instead wait till after the news is announced.

Do not always believe that the tokyo session maitains the same trade range

Do not also believe market goes up during london and comes down during US or the other way round......let me stop here

Hello Friends,


This is a continuation of my last post ,on how not to use stoploss and still be a successful trader. I keep saying that reading this post is dicretionary..it is not for everyone. In my last post I mentioned those it is not meant for. This is for traders who know where they are in the Big picture of the wave of the market.To be precise this post is meant for traders who after they enter most of their trades, they get their entry hit their stoploss first only for them so see the same price after sometime go back to hit their take profit price and this happens to them frequently,if you have been experiencing this ,this post is meant for you.

Forex is not designed to frustrate anyone but the way we go about it is what puts us in problem. If you do not want to use stoploss then there is a bigger price which you must pay ,a price even bigger than those who use it but the truth is it pays at last. I am a forex trader from Nigeria I had to learn equity management without a stoploss the hardway. I had in the past made lots of terrible mistakes and at a point I was almost quiting but I had to ask myself. What is it that makes me different from a man who dresses up and goes to a paid Job daily. The answer is he is sure of getting his pay. So I started researching . How can I make my platform a bank and not a condiut for negative outflow of cash.

As a beginner , I was a fancier of the use of stoploss....I used to use them frequently. I will make some great pips , enter trades again and get my entry hit my stop loss. I was growing and reducing ..it was like I was like the market did not want me to succeed....why will it keep hitting my stoploss.I understand support and resitance prices but the only truth I did not want to tell myself is that noone can predict the market with a 99% accuracy..... I will get hit only after some hours I will still see prices go to hit my TP price. I was able to conclude that using stoploss was just a slow way of lossing my money. It only slows the way ,the money is being burnt but it will finally get burntThis tells me that something must be wrong somewhere.I now asked the question is there anyway I can trade safely without a stoploss and go to sleep or travel. Then I started testing it on my trades to see how it can be possible.

If it was in the past I do not see anything wrong in using a 0.1 or 0.2 lot trade an account of $1000

some thoughts will cross my mind that ; you are 90% sure of this trade use 0.3lot or 0.5 on a $1000 you will get more money with few pips

But now I cannot try that way because if you want to be among those who do not use stoploss and trade succesfully you cannot trade like that, if you do,you will be worse than someone who complains of the same stoploss problem

This is it, to me it was very hard to accept.

an account of $1000 use a minimum of 0.01 lot and a maximum of 0.05 for every open position without using any stoploss.

If your entry does not give you profits instantly but negative values relax ,do not add more trades even if market price is 100 pips or 150pips away from your entry. relax I know it is painful to see more oppurtunities rolling bye and you cannot enter a trade. Let your patience be the price you pay for every wrong entry. even if it will take 4days.WAIT, WAIT ,WAIT

If you add more trades above your maximum lot entry when you are having an open position in profits or open position in losses then you are violating this rule .Then your not using this method you are practising something else. Dont call Gods name in vain if anything goes wrong.

Someone will say this is crazy, why will I not enter more trades when prices is 100pips away and am sure that price will retrace to my entry point. Thats is where the problem begins with the use of this system.When you try that before you know it you have more than the maximum pip dosage. If you calculate very well market will have to move about 2000pips unidirectionally before your account can get blown out and that is not possible but you will not enjoy this kind of market tolerance if you increase your lot size beyond the one prescribed above. For the man who always likes trading every oppurtunity he sees....This is what to do so that you do not get into trouble.

If you are using $1000 the maximum lot is 0.05
divide it into 5 parts if that is the only way you can use this method
0.01 0.01 0.01 0.01 0.01
you can use two during london and 3 during US or 3 During london and 2 during US or Tokyo
or you can use them at your own trade spaced interval but it should not be above 0.05

For a very sure trade use 0.05 at a stretch but on days where we have High impact news events like unemployment, Nonfarm payroll please split it and use at intervals.

Please note it is only when the total of 0.05 placed trades have given profit that is when you enter new sets of trades.
I know exactly what am talking about ,there are times you will be tempted to just take a chance but please dont. You will find out that you are still sane. If your doing this you can be confident to tell people that you are a trader. For an account of $5000 use 0.25 maximum

Do not be in any hurry to close any position making losses wait and see them come to yourside in the long run

Learn to classify your account into 2 stages SUPPORTING STAGE AND MATURITY STAGE I will elaborate more on this in my next post

There are things we do as traders,that are wrong even in the sight of God.
Despite the fact that we talk about greed,we seem not to see when we ourselves are greedy. Greed to a forex trader can Hide under figures. You have an account of $5000 and you say I want my daily target to be 25% .It is good ,it is acheivable, many peolple do that. You will never be classified as greedy till something goes wrong with your account. the greed could just come in in a single day,it could come in in an hour. You first think it as a thought. You want a new car, a new home , you want people to know you trade forex you want to be the new talk in town....another thought links that up, you will hear your mind saying and just tired of this 0.05lot am using on this $1000 dollar account. let me take this risk with a very tight stoploss I want to make 100% or 50% in a day,before you realize it the account is in the red.We all talk about greed .it is time we start screening everythought that carries a figure in it and how it will influence our trading. Every account has a growth phase. I have seen and heard people blown up a newly funded account in a day, I have heard of people who have blown up and account in a week, I have heard of someone who blew up an account of $100000 in a week ,In my days of naivety I have blown up account of $1000 in the same day,for so many people no account has survived more than 2weeks. Some will just dump the acct somewhere because they know if they touch it ...it is gone.Nothing will happen to it if they do not trade.


It is time we start seeing our accounts in GROWTH PHASES

1. SUPPORTING PHASE 2.MATURITY PHASE

Supporting phase is when you see your account as a baby. maybe to you it is newly funded or someone just gave you the account to manage.You know that in life you cannot feed a baby with a very big spoon or give a baby a large chunk of food or food that is too pepperish...the same applies to every new account. You can even name your accounts by name. Sill , emmaneul,okocha,chioma,obama and so on Then when you blow then out you killed someone training them.In the supporting phase of your account ,you need to give it all the support it needs by making sure that you do not give it more than it can carry. Do not go beyond the prescribed lot size.

If you are a funds manager ,your clients will always ask of your baby--your account.

For example , "where is Okocha?" and your response" I have killed him" what! in how many days?
please do not get me wrong "to kill means to blow up your baby account"

It does not just make sense when we cannot train a baby and bring it up to maturity stage.

Go through the pain of seeing your account produce little little profits
Go through the pains of witholding yourself from withdrawing the little profit you have made because your account has not yet gotten to that MATURITY STAGE
At that Supporting stage stop dreaming about that Big House ,that flashy car,that cute girl,or making huge donations at functions and stop thinking of adding more funds by bank wire or any method just as to increase your turnover. Always believe that the account by the level of days it has stayed with you is not yet mature for all that.
It is a bad habit to view your funds in the trading platform as water on a hot frying pan on fire ....it is bad . (You know when water is on a hot frying pan on fire if you do not remove the water fast it dissappears) As if someone is over there trying to remove it from you. If you keep your greed in check your cash will grow up in the your platform it will be there day in day out so far you are using a very good broker.

Stop abusing your equity because your baby account of few days has a big balance.You know very good traders if they can start small and grow big. Do not say because you are managing an account of $100000 then you decide to use 50lot or 100lot you are killing that account and your self because the day it will happen it will leave a memory in your life as a whole.I have even done that on demo in the past using 50lots I boosted $100000 to 1million dollars in one month but If I look back I will say that is crazy. Just like in life ,Their are some teenagers who show some excessive rapid growth, they have very big bodies and they appear like adults but they are not, you only notice they are not yet mature by their judgements and actions.some parents will mistakenly give those kind of teenagers the freedom to take certain decisions . That is the same way accounts are ..you can be given an account of $200000 and you jump up ,saying good bye to poverty forever....just that same week you started using 500lots , 100lots ......that is insane....There is a problem you have not drawn a growth cycle for your account.Even if your balance is Big that those not mean the account in your hand is not in a baby stage. Take it this way an account of $5000 which you took pains to grow to $100000 is older and in a mature stage compared to a $100000 just given to you. DO NOT TREAT THEM THE SAME WAY. This is why some money manager get into problem,they can even withdraw from an account that they have not made a dime from believing that they would make it back ...it is forex ....2.9 trillion is floating in the air. How do you know an account is getting close to MATURITY STAGE


2. MATURITY STAGE. This account has lots of experience it has endured from micro lot sizes and has undergone so many market oppurtunities, it has been able to double its capital and is even planning to get the capital off the platform .it is a product of patience and endurance, It has gotten to a stage when even when withdrawals are made it does not disturb the trader in the least bit. Take for example an account of $5000 grown into $100000 if you decide to withdraw your capital it does not shake you in anyway. if you decide to withdraw $30000 ,it will not also shake you .....that is an example of a mature account.

If you compare it to an account of $100000 grown into $120000 and you decide to withdraw 10k , you have not even made your capital....it shows you are not a good investor, you are not ready for the forex business.

A mature account is an account that grew from little say atleast $1000 to an uncomparable amount and that cannot shake your emotions even if you are making withdrawals from it everyday.

It is an account that can cater for an extended family and can sponsor projects and will still be running and it is still taken the prescribed lot size.

Maturity of an account does not mean you can use a huge suicidal lot size on it ,NO . It simply mean the account has gotten to a stage of no return...where it can start giving birth to different accounts .

Celebrate when your account survives for a month, celebrate when your account survives more than 2months ...it means you are consistent.....keep celebrating.You can even celebrate it without even letting people know why you are celebrating it so that you do not get distracted.

In all, a very simple and humble life will go along way to help you as a trader. Thanks for your attention God bless you.

I suppose some people don't but you are always running the risk of wiping your whole account clean. Surely you close out at some point. Instead of tearing your hair out, might be better to evaluate the trade and set a SL

In considering this, keep in mind your money management.

As we all know, it takes money to make money. If you're letting money sit unused in your account, it's not making you anything. When you make a trade, your balance is on the line. If the trade moves against you, you lose equity as a result. If your equity goes too low, you lose the ability to trade.
Simple, right? It's something we all know about how our accounts work. We use stop losses to keep our bad trades from turning into trainwrecks or albatrosses or whatever term you want to use to describe them. Is it possible to trade without a stop loss? Yes. Should you be trading without one? Not if you trade the way most people on this forum tell you to.

Humility has the money management dead-on for how to trade without a stop loss. Forex likes to trend and it likes to range within a trend. For those who don't understand that, it means the price bounces up and down quite a bit even while the overall trend is up or down. This means that if you're trading with the trend, even if price moves against you for a little while, there's a good chance that it will come back to profits for you if you can ride it out. The trend is your friend until it ends.

The biggest problem with trading this way is what happens if you go long and price reverses that day. Let's say it starts a long, slow retrace that goes on for months. Do you have the guts to sit there and watch your equity drop as your trades go deeper and deeper into the red? If you're trading in a country that doesn't allow hedging, can you stand the thought of only being able to trade up to your maximum lots on the market in the same direction as your losers? It can be months or years before price comes back to where you need it. If you're trading for a living, can you financially afford to let it run like this and not be making the big trades you're used to?

Trading this way, you will almost never record a losing trade. The only problem is that when you do have a loser, it's probably taking a large chunk of your account with it.

I personally dont use stop loss in 80% of my trades, because my trading style is scalping, so i have to react on changes as fast as possible .. only when i trade on big supports or resistances i use stop loss .. i think that it mainly depends on your trading skills and trading system (scalping, intraday trading or longterm trading)

This is a insanely wrong statement There is no FACTUAL thing, that one should/shouldn't do. What works for you - works for you. It can't and shouldn't work for everyone/anyone else. So not using or using SL is a matter of your trading style. I didn't use them, but then i started. And i like it. It's a matter of currency pair, volatility, trading session etc. whether you should use it and how distant from the spot price should it be. But to answer your question - yes and no.

I have to put something straight here. Forex is a business you plan for before you get into it . Just like anyother business.....Someone was telling me that if one uses the above prescribed method in my first post that one cannot cover overhead cost.

If you want to do the forex business,especially trading without a stoploss which requires lots of patience and psychological balance ,you should have calculated your overheadcost first and earmark money for it(cash not even frm trading)and not wishing that when the business starts that you will immediately start withdrawing from the account to keep the business going......it will affect your trading psychology by that way and you may be forced to take some uncalculated risk at some points just to meet up overhead cost because there are sometimes market will not just move the way you expect. I am sounding this way because some account can even take 6months to get to maturity for withdrawals but If you do not put your discipline that way you will find out that you will always have the urge to withdraw every single pip that you have made. You can earmark cash that will cover your overheadcost for 6months,then when your account is mature you will know how to balance things out. We do lots of things that put us under pressure ,which is wrong and will not help our psychology onebit.But if you expect the account to fuel the business immediately,then you are not ready. Except you have been in the business for long and your accounts are mature enough to stomach your expenses.

Hedging with this style.

I know that it is not possible to get all your trades right. and if you are not going to use stoploss if a trade does not give immediate profit as expected it could be a source of worry but I will keep saying WAIT WAIT WAIT

I will only recommend hedging in case your entry went the wrong way if only you understand how to use hedging to your advantage and if it will not get you distracted from the main trend.

if you are using an account of $1000 I always recommend you use a maximum lot of 0.05.

But in case you love hedging and cannot wait to just see those large pip space filled up, then divide your 0.05 into two places before you even start tarding, use half of it as your first lot launch , then use half to hedge incase market goes against your prediction.After that do not add anyother trade.

You will find out that you still have not exceeded your maximum lot which is 0.05

I strongly advice the use of 1 hr ,4hrs and daily and monthly chart for this method
and will also advice you stay off trades at the beginning of a month and the ending of a month as the monthly candle may give you a false signal .Allow the market to settle .

I know it is painful to WAIT WAIT and WAIT but you have to ask yourself that why is it that it took so many peolple close to 6 to 15 years before they started making consistent profits.....if you can answer that question then you will see why you have to take it slowly now so that you do not have to stay that long before you start making consistent profit.
With time your account will be saving lives and funding huge projects

Lastly , in forex there are two ways the road taken and the road not taken

Tk care and God bless you

They use mental stop loss.

Hi,

Most pro fx traders are not proprietary traders. They have very strict buy and sell orders from the banks clients and act to fill the orders.

Also I doubt that actual prop traders have a mandate to put the entiry wagon on the risk --> they are using stop loss

Hello Friends ,

Lately in the market I have seen lots of time price go againt me and come back to my take profit The last one I was even 120pips down but it did not shake me because every thing has been measured. If you are going to do your trades without a stoploss you have to understand that market could either be in a bullish trend ,bearish trend or in a sideways fashion. you can use SMA 50 and 100 as your trend indentifiers or if you understand how to use price action flow of lows and highs it will give you an advantage ,you will hardly get trapped,if you are trapped it wont be long your wriggle out of it and be all smiles in the way of your profit.

Another thing that might get you into problem is market timing, its very important. If you get to the market at the appropriate time you will have less troubles. Understand the market sessions London ,tokyo and Newyork

THOUGHTS THAT GET TRADERS INTO PROBLEM.

Many traders believe that if a currency pair is going up during london then it will or must come down during Newyork or the other way round.They also believe the tokyo always maintain a sideways range.

They believe using a low but measured lot size leads nowhere.



So many traders believe they always know markets higher high and lower lows

so many traders believe that their are just some opportunities which come which you must go above your prescribed lot size because such opportunities may never come again.

So many traders believe they must trade all the time.

Professional traders don't use 1:100 or 1:10 leverages.

If you go with 1:1, then of course there might be no stops for long term positions.

It's like your all assets, in US dollar (if you are American): house, car, etc. Where is your stop loss there?

Don't be confused about terms of "real fx traders".... just like merlin says, the real trader is bank & some institution that doing exchange for they needs rolling their business, not a trader who make retail order or "market manipulator" type.

Real trader sit & watch the order book, even if they hold big bullet they play it just like a machine, without emotion. They'll split their order in the sake of quick liquidity. There is no "stop loss" as we retail trader see. They just buy & wait the right time to exit their trade, or short sell a position to find supply of bidding below, that's all about real business doing

well as for me I have always used leverage 1:500 and never had any problem with that. We are always looking for Narrow ways, if leverage 1:1 puts you in your narrow way ,fine. If leverage 1: 10,1:20...... puts you in your narrow way ,better, but any style that puts you in the broadway..check it

The Title of the thread that makes me smile. In my opinion no Stop losses mean you are 100% sure where the price will move. Forex is not a bank where you can put money and come in a year to take them out with the profit. Forex is the place to invest risk capital and there is always chance that something will happen and effect your trade. ( Like situation in Japan right now). Doesn't matter what kind of stop losses, but they should be.