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Cable Update (GBPUSD)

  • #546,701
  • Sep 7, 2020 7:11am Sep 7, 2020 7:11am
Quoting KeenPips
Two key issues are pride and foolishness. Leaders in this business advise us to cut our losses when it becomes apparent that things are not going our way. When we trade with discipline and by specific tried and tested rules, and have the humility to admit it when we are wrong, we'll do better as traders. KP {quote}
Good use and placement of SL can make a huge difference in trading performance. Yet some traders feel like they have the Holy Grail
  • #546,702
  • Sep 7, 2020 7:16am Sep 7, 2020 7:16am
Quoting akim0895
{quote} but some said who used stop loss is traders that not trust their own system or analysis...how to answer about that? but the person said that lately always used stop loss.
If you know the history of market's you'll obviously understand the importance of stop loss. The market can Exponentially!! move in any direction any time.
BARAK
  • #546,703
  • Sep 7, 2020 7:46am Sep 7, 2020 7:46am
Quoting MarketPatrol
{quote} If you know the history of market's you'll obviously understand the importance of stop loss. The market can Exponentially!! move in any direction any time.
If you know history, you also know stop loss won't always save you.

I actually traded successfully without stop loss. And when I first started using it, I lost a lot of money and a lot of self-belief. I am better at setting SL now, but I still don't like it.
  • #546,704
  • Sep 7, 2020 7:46am Sep 7, 2020 7:46am
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yes yes yes
  • #546,705
  • Sep 7, 2020 7:49am Sep 7, 2020 7:49am
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  • #546,706
  • Sep 7, 2020 7:57am Sep 7, 2020 7:57am
Quoting VM.
{quote} If you know history, you also know stop loss won't always save you. I actually traded successfully without stop loss. And when I first started using it, I lost a lot of money and a lot of self-belief. I am better at setting SL now, but I still don't like it.
If you placed stop loss correctly, it won't be hit when you are right. It will only hit when you are wrong. That's why most traders place SL above or below (depending whether its a buy or sell) price action structure. Because its obvious that when price reaches that price it most likely no longer going in your direction
  • #546,707
  • Sep 7, 2020 7:58am Sep 7, 2020 7:58am
if some one has 100k and trade 1 lot, he/she does not need stoploss, but needs emergency stop to deal with situation like COVID 19 drop n march or CHF ...issue some years ago.

However, if one trade 1 lot with 1k capital, he needs stop loss.

Considering the brokers hitting stop...better to play with small lots and with emergency stop.

Having 10/20/30/40/50 pips stop... no meaning in my opinion.

I have now migrated to higher level. So..

Individuals choice.

Intraday only.
  • #546,708
  • Sep 7, 2020 8:01am Sep 7, 2020 8:01am
FOR 37 PIPS

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yes yes yes
  • #546,709
  • Sep 7, 2020 8:21am Sep 7, 2020 8:21am
Quoting VM.
{quote} Agree on a trade war; unfortunately for me, as I am in the UK, and we will lose massively (maybe EU will, as well, but this gives me no comfort whatsoever). But don't expect this trade war to end quickly just because of economic difficulties. For politicians, they are not as important as political considerations.
sorry for the late response...

I agree it could take years before this is settled. And both will probably lose out.
But i think brexit can no longer be seen as a stand alone issue.
How this will all fit in the Covid situation and the financial ramifications of all the lockdowns....
By next year we will look back and see it clearer but right now its quite difficult to see where we are heading.

Crazy times.
\
in wondering about yourself, you forgot what you came here to be part of
  • #546,710
  • Sep 7, 2020 8:37am Sep 7, 2020 8:37am
I wrote this in my thread a few days ago, but I share it here as it may help some new traders.

I believe you need to define your risk (sl) and reward (tp) before each trade. Failing to do so will mess with your profitability in the long run.

Just a few notes on the concept of probability, risk to reward ratio, and profitability.

You don't need to have a strategy that has 70-80% success rate to be profitable. Although it will definitely help.
For example, you can be profitable with a strategy with 40% success rate and RRR of 2:1
for any trading system:
(probability of win x profit %) - (probability of failure x loss %)
if that equation is positive you are profitable in long run


As a practical example, let's look at a long trade setup on GBPUSD,
if you plan to go long @ 1.3140 with sl of 20 pips and tp of 80 pips, you have a RRR of 4:1
https://www.forexfactory.com/thread/...0#post13152840


assuming the probability of that setup is 30%, with 1% risk per trade
3 x 4% - 7 x 1%= 5%
that means if you trade such strategy 10 times in a month, you will make 5% return even with a 30% success rate
  • #546,711
  • Sep 7, 2020 8:41am Sep 7, 2020 8:41am
Quoting Nat.Fx
{quote} If you placed stop loss correctly, it won't be hit when you are right. It will only hit when you are wrong. That's why most traders place SL above or below (depending whether its a buy or sell) price action structure. Because its obvious that when price reaches that price it most likely no longer going in your direction
In theory, yes. In practice, you may lose too much at a time if you place your stops at "safe" places (and too often if you use tight stops). Stops are good near important support/resistance levels; less so if you are catching a falling knife, for instance. Or are trying to ride a strong trend.
  • #546,712
  • Sep 7, 2020 8:53am Sep 7, 2020 8:53am
Quoting akim0895
{quote} but some said who used stop loss is traders that not trust their own system or analysis...how to answer about that? but the person said that lately always used stop loss.
if someone does not believe in stop loss, don't argue with them. ask them how that worked out for them 6-12 months later. your stop loss can be your margin call if you put lets say 5% of your trading capital in your account, but that still counts as stop loss. Which is a good practice for novice traders who are impulsive and lack discipline to close a losing position.
  • #546,713
  • Sep 7, 2020 9:01am Sep 7, 2020 9:01am
I think its safe to say, MOTY had a good start to the week.

You can do it!
  • #546,714
  • Sep 7, 2020 9:05am Sep 7, 2020 9:05am
Quoting navk
if some one has 100k and trade 1 lot, he/she does not need stoploss, but needs emergency stop to deal with situation like COVID 19 drop n march or CHF ...issue some years ago. However, if one trade 1 lot with 1k capital, he needs stop loss. Considering the brokers hitting stop...better to play with small lots and with emergency stop. Having 10/20/30/40/50 pips stop... no meaning in my opinion. I have now migrated to higher level. So.. Individuals choice.
The problem is that those who don't use stop loss are likely to add to their losing position. That dire situation can escalate very quickly
  • #546,715
  • Sep 7, 2020 9:09am Sep 7, 2020 9:09am
we may go back to the 1.30 to 1.32 range and stay there a couple weeks. slow trading unless strong support is found. maybe a couple longs in NY session for scalps
  • #546,716
  • Edited 9:25am Sep 7, 2020 9:12am | Edited 9:25am
all depends on capital, traded lot size, leverage.

stoploss one wants to fix.

Assume, i have 100k capital,

And I trade 1 lot only. My risk is 1000 pips... do i need to set stop?

I would see if floating goes to 1000 dollar, ( 100 pips ) my reward is set more than 1000 dollar.

EDIT :

My system ( or for that matter anyone trading system ) can be said, 40 % accurate, but not 80 % accurate.

So, I have to play with smaller lot size, with bigger capital.
Intraday only.
  • #546,717
  • Sep 7, 2020 9:18am Sep 7, 2020 9:18am
Quoting shahab8b
{quote} The problem is that those who don't use stop loss are likely to add to their losing position. That dire situation can escalate very quickly
and if some one does not have accuracy, he ends up giving back to broker..10 pips, 20, 30, 40 50 like that.

So setting small pips stop..meaningless, none of us ( majority of us ) do not have accuracy
Intraday only.
  • #546,718
  • Sep 7, 2020 9:33am Sep 7, 2020 9:33am
Quoting navk
all depends on capital, traded lot size, leverage. stoploss one wants to fix. Assume, i have 100k capital, And I trade 1 lot only. My risk is 1000 pips... do i need to set stop? I would see if floating goes to 1000 dollar, ( 100 pips ) my reward is set more than 1000 dollar. EDIT : My system ( or for that matter anyone trading system ) can be said, 40 % accurate, but not 80 % accurate. So, I have to play with smaller lot size, with bigger capital.
assuming your win rate is 40% and stop loss is 100 pips, a take profit of 150 pips will give you a break event results in the long run.
0.4 x 150 - 0.6 x 100 = 0

so it can be profitable if you go with tp>150 pips in average
  • #546,719
  • Sep 7, 2020 9:38am Sep 7, 2020 9:38am
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yes yes yes
  • #546,720
  • Sep 7, 2020 9:42am Sep 7, 2020 9:42am
Quoting shahab8b
{quote} assuming your win rate is 40% and stop loss is 100 pips, a take profit of 150 pips will give you a break event results in the long run. 0.4 x 150 - 0.6 x 100 = 0 so it can be profitable if you go with tp>150 pips in average
i do not say win rate is 40 %.

My win rate is 100 % by trading smaller lot size with bigger capital.

And if my floating was 100 pips, i will see to it...i get 100 pips or more.

My point is... no point in trading 1 lot with 1k capital and setting 40/30/20 pips stop.

will end up giving back to broker.

The probability theory is good.
Intraday only.
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