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Trading without stop-losses

  • #761
  • Jan 24, 2018 10:27am Jan 24, 2018 10:27am
Quoting T4Trade
i don't know what you guys are talking? I keep my trades open for a month or so without sl and never a big spike wiped out my account, obviously my lot sizes are small,anyways no one leaves big lot size unattended.
So, when you close a lose trade? I mean, how you decide it?
  • #762
  • Jan 25, 2018 8:41am Jan 25, 2018 8:41am
Quoting GeorgeBaile
{quote} So, when you close a lose trade? I mean, how you decide it?
The only other way is to close a position manually. I do that sometimes, with or without a stop loss (especially if I decide that I've placed the SL badly).
  • #763
  • Jan 25, 2018 9:24am Jan 25, 2018 9:24am
Let me summarize my points below:
Stop Losses are for rookies, Forex Educators and Market Making Brokers

I don't use stop losses at all; I have learned the hard way that stop losses do not work !

However; it does not mean you do not use an exit logic for your positions.

relying solely on a stop loss to exit your position is not a good idea.

What is the alternative; you may ask me? well here it is:
- It depends on your strategy logic. The same reason that got you onto the trade; should get you out of it.
- for example; if you trade Donchian breakout; you should consider exiting when the price goes onto the opposite direction and do a breakdown.
- You can also use time stops; if the position is not profitable after 20 bars for example; exit the position.
Say for example you are travelling from NY to Montreal, if you start driving in the highway; and find yourself getting closer to New Jersey, will you make a U turn and head to Montreal; or continue south?

hope this help.
  • #764
  • Jan 25, 2018 3:41pm Jan 25, 2018 3:41pm
Quoting alphadude
Let me summarize my points below: Stop Losses are for rookies, Forex Educators and Market Making Brokers I don't use stop losses at all; I have learned the hard way that stop losses do not work ! However; it does not mean you do not use an exit logic for your positions. relying solely on a stop loss to exit your position is not a good idea. What is the alternative; you may ask me? well here it is: - It depends on your strategy logic. The same reason that got you onto the trade; should get you out of it. - for example; if you trade Donchian breakout;...
On a rookie talk forum suggesting not to use stop loss is not quite a wise thing to do. Yes stop loss is for rookies and it shall stay that way. Cos placing a correct stop loss needs experience. It eliminates the psychological side effects till they learn what it takes to be a trader. It may not sound the most effective way to trade but it certainly serves as a cruitial part of your learning curve. So it is not all bad for educators use that as a tool.
Keeping a trade on a time basis is even worse thing to suggest as one bar is enough to erase your whole equity. So please when you leave a comment think twice how rookies would take this. You might be assisting them to loose their life tine saving or dreams or whatever you want to call it. Being a retail trader is already hard enough. It needs persistency, hardwork, patience and discipline. And it takes time build it.
  • #765
  • Jan 25, 2018 4:28pm Jan 25, 2018 4:28pm
Quoting Kxeroo
{quote} On a rookie talk forum suggesting not to use stop loss is not quite a wise thing to do. Yes stop loss is for rookies and it shall stay that way. Cos placing a correct stop loss needs experience. It eliminates the psychological side effects till they learn what it takes to be a trader. It may not sound the most effective way to trade but it certainly serves as a cruitial part of your learning curve. So it is not all bad for educators use that as a tool. Keeping a trade on a time basis is even worse thing to suggest as one bar is enough to...
Kxeroo, with all due respect, I stand by my expertise. I do not use stop losses, and it works best for me. I run few strategies; and none of them use a single stop loss. I use variety of exit techniques; and time based exit are quite common in my arsenal.

It does not mean you cannot use them at all; but a trader has to think carefully about anything beinig used in the trading strategy.

my advice to any trader is to backtest the stop loss settings; and arrive at a conclusion on what is the best thing to do.

trading blind without testing a tool; is not a good idea.
  • #766
  • Jan 25, 2018 4:32pm Jan 25, 2018 4:32pm
also, we must not confuse Stop Loss with Stop Order.

you may want to open a position using a Stop Order; which is not what we are talking about here.

The stop loss we are talking about is the one used to stop a loss of an open position.
  • #767
  • Jan 26, 2018 4:18am Jan 26, 2018 4:18am
Quoting alphadude
also, we must not confuse Stop Loss with Stop Order. you may want to open a position using a Stop Order; which is not what we are talking about here. The stop loss we are talking about is the one used to stop a loss of an open position.
Did you mean trailing stop by the team of Stop Order? Or anything else?
  • #768
  • Jan 26, 2018 4:25am Jan 26, 2018 4:25am
Quoting Majeeda
{quote} Did you mean trailing stop by the team of Stop Order? Or anything else?
Stop Loss or Trailing Stop fall onto similar category; since their job is to limit the loss of an open position.
  • #769
  • Jan 26, 2018 7:33am Jan 26, 2018 7:33am
Quoting alphadude
{quote} Stop Loss or Trailing Stop fall onto similar category; since their job is to limit the loss of an open position.
But I use the trailing stop with the different purpose! Means; when I get enough number of pips according to my target but till now clear trend; only then I use the trailing stop!
  • #770
  • Jan 26, 2018 7:38am Jan 26, 2018 7:38am
Quoting GeorgeBaile
{quote} But I use the trailing stop with the different purpose! Means; when I get enough number of pips according to my target but till now clear trend; only then I use the trailing stop!
By all means; if the trailing stop is backtested and improves the performance; then go for it.

I personally found that trailing stops hinders my strategy performance.
  • #771
  • Feb 16, 2018 12:14pm Feb 16, 2018 12:14pm
Yes trading without stop loss is possible. I know a trader who trade without stop loss. It is all about how you manage your risk. That person's maximum lot is .01 for 1000$. He also have proven long term strategy. Sometimes he has to wait for a long time to get the profit. There are some people who use hedging to protect their account. So the point is if you don't use stop loss, find another way to protect your account.
  • #772
  • Feb 16, 2018 11:28pm Feb 16, 2018 11:28pm
Quoting GeorgeBaile
{quote} So, when you close a lose trade? I mean, how you decide it?
i use the system that follows the trend top down from weekly to 1 min for entry,so i know if the price has gone against me temporarily will come back,so it trade doesn't hit the tp and it goes against me,i use bottom to top analysis i.e 1 min to weekly to exit with minimum loss or breakeven or profit.trading without stop loss requires solid MM plan and plan B like hedging or matriangle if u dont want to wait for price come to return to your levels.
  • #773
  • Feb 17, 2018 7:27am Feb 17, 2018 7:27am
Quoting alphadude
{quote} By all means; if the trailing stop is backtested and improves the performance; then go for it. I personally found that trailing stops hinders my strategy performance.
I don't like trailing stops, any sharp spike can hit it and close the position.
  • #774
  • Feb 17, 2018 8:20am Feb 17, 2018 8:20am
Quoting mlawson71
{quote} I don't like trailing stops, any sharp spike can hit it and close the position.
I got your point! You can use it, when you get your initial target but the momentum is till now high!
  • #775
  • Feb 22, 2018 8:09pm Feb 22, 2018 8:09pm
Trading without the stop loss is possible but it is a risky work. Many traders can handle the trade without SL but not every one.
  • #776
  • Feb 26, 2018 3:51am Feb 26, 2018 3:51am
What you shouldn't do in forex is to trade without stop-losses. Forex is a very active market and if you trade without stop-losses, you may loose your deposit at once.
  • #777
  • Feb 26, 2018 4:14am Feb 26, 2018 4:14am
Quoting Hunterr
What you shouldn't do in forex is to trade without stop-losses. Forex is a very active market and if you trade without stop-losses, you may loose your deposit at once.
just for facts:
if you trade with Sl, you can still lose your deposit at once
there is always, always another trade!!
  • #778
  • Mar 7, 2018 9:55am Mar 7, 2018 9:55am
Quoting profitfarmer
{quote} just for facts: if you trade with Sl, you can still lose your deposit at once
While that's possible, wouldn't that mean that the stop loss was very badly placed?
  • #779
  • Mar 7, 2018 10:17am Mar 7, 2018 10:17am
Quoting mlawson71
{quote} While that's possible, wouldn't that mean that the stop loss was very badly placed?
not necessarily.
take the CHF depegging, if your SL was 50 pips bellow the market before the collapse, and the broker's next quote was 2000 pips lower, guess where your SL will be filled.
of course that is an extreme cause, but any time you put a SL 20 pips bellow market, and it represent say 5% of your account ( some trade even more aggressive) and the market gaps on a news, or on weekend 200 pips ( not that uncommon if you think) you potentially wipe 50% of your account, even though you had a "tight" 20 pips SL in place...
there is always, always another trade!!
  • #780
  • Mar 8, 2018 8:50am Mar 8, 2018 8:50am
Quoting profitfarmer
{quote} not necessarily. take the CHF depegging, if your SL was 50 pips bellow the market before the collapse, and the broker's next quote was 2000 pips lower, guess where your SL will be filled. of course that is an extreme cause, but any time you put a SL 20 pips bellow market, and it represent say 5% of your account ( some trade even more aggressive) and the market gaps on a news, or on weekend 200 pips ( not that uncommon if you think) you potentially wipe 50% of your account, even though you had a "tight" 20 pips SL in place...
That's a great point. I've had that happen even after post-weekend gaps but it didn't occur to me to apply to this situation.
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