Stop Loss is not a financial loss | Forex Factory

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Stop Loss is not a financial loss

  • #1
  • First Post: May 27, 2022 11:37pm May 27, 2022 11:37pm
Hi
In this post, I want to examine Stop Loss psychologically.
i think Stop Loss is not a financial loss!
Stop Loss is a blow to your ideas and confidence!
It is a mental and psychological issue rather than a financial and material...
I think the way to make a profit in the financial markets is not to never stop. But compromise with it! Stop Loss is our friend!
If your soul enjoys Stop Loss, you can make profit from the market, and it does not matter what method you use.
Most traders are looking for dream trading systems that will never stop. Because they are afraid of stop loss
  • #2
  • Jun 9, 2022 2:29am Jun 9, 2022 2:29am
A losing trade is just an overhead.

Unless a trader is running a strategy with a 100% win rate, they have guaranteed that they will have some losing trades when they implemented the strategy. Better to take the small losses that are outweighed by the big gains than one big loss that ends the game.
  • #3
  • Jun 9, 2022 12:52pm Jun 9, 2022 12:52pm
Quoting tomorton
A losing trade is just an overhead. Unless a trader is running a strategy with a 100% win rate, they have guaranteed that they will have some losing trades when they implemented the strategy. Better to take the small losses that are outweighed by the big gains than one big loss that ends the game.
I'm not talking about risk management, you're right
I'm talking about its psychological impact
The psychological impact of Stop Loss is much greater than its financial loss
  • #4
  • Jun 9, 2022 3:55pm Jun 9, 2022 3:55pm
Quoting s.everest
{quote} I'm not talking about risk management, you're right I'm talking about its psychological impact The psychological impact of Stop Loss is much greater than its financial loss
I admit that its so damaging that unless a strategy has given me more than a 50% win rate during back-testing or demo trading I have always dumped it. No matter how good the r:r I just won't put effort into something with mostly losers. Even if profitable.
  • #5
  • Jun 10, 2022 6:46am Jun 10, 2022 6:46am
Quoting tomorton
{quote} I admit that its so damaging that unless a strategy has given me more than a 50% win rate during back-testing or demo trading I have always dumped it. No matter how good the r:r I just won't put effort into something with mostly losers. Even if profitable.
I must say my win rate is 40%!
  • #6
  • Jun 10, 2022 10:02am Jun 10, 2022 10:02am
Quoting s.everest
{quote} I must say my win rate is 40%!
Your perseverance is to be admired. As I said, as soon as my backtesting shows a strategy has a win rate less than 50% I drop that idea.
  • #7
  • Jun 14, 2022 2:06am Jun 14, 2022 2:06am
Stop loss is an obligatory thing to set because it guards a trader against losses. But it’s really upsetting that traders hardly set stop losses in their trading. As a result, they can’t protect their trades from sudden losses. So, make it a practice of using stop losses.
  • #8
  • Jun 17, 2022 6:52am Jun 17, 2022 6:52am
Hi, today I want to talk about the madness of trading after stop loss.
Sometimes we rush into a new trade to get rid of the hassle of Stop Loss!
And this is the beginning of a cycle of loss
  • #9
  • Jun 27, 2022 2:27am Jun 27, 2022 2:27am
Quote
Sometimes we rush into a new trade to get rid of the hassle of Stop Loss!

This is happened when people only see profit and not strategy.
We know that profit is what everyone after but before profit there's another important piece that we need to looked into which is our strategy.

Every strategy need to be tested. Use demo account first or using algo trading for consistence result of the strategy.
Why we need to backtest the strategy?
Simple, loosing money in real account can shaking our psychology and that's why what your saying is happening over and over again.
  • #10
  • Jul 7, 2022 8:05am Jul 7, 2022 8:05am
Quoting ezraluandre
{quote} This is happened when people only see profit and not strategy. We know that profit is what everyone after but before profit there's another important piece that we need to looked into which is our strategy. Every strategy need to be tested. Use demo account first or using algo trading for consistence result of the strategy. Why we need to backtest the strategy? Simple, loosing money in real account can shaking our psychology and that's why what your saying is happening over and over again.
I think that in the situation I was in, it was not about strategy at all
I was trying to make a deal to escape the suffering
And I thought I was sticking to my strategy
In fact, we have to deal with our sufferings...
  • #11
  • Oct 23, 2022 5:02am Oct 23, 2022 5:02am
i had already written about the madness of the trading after losing
today I want to write about its other effects as well
when you have a trading madness you may even increase your input volume in subsequent trades and trade with more money
and this is the first spark to call margin
  • #12
  • Edited 6:11am Oct 23, 2022 5:24am | Edited 6:11am
Quoting s.everest
i had already written about the madness of the trading after losing today I want to write about its other effects as well when you have a trading madness you may even increase your input volume in subsequent trades and trade with more money and this is the first spark to call margin
but what is the solution?
i think the best solution is to formulate a strategy
the most important need for a trader is a strategy formulated and written in which all that is needed to enter and exit the trade is mentioned
in my next post in the Everest Journal I will review the formulated Trade Strategy

Everest Journal Link
  • #13
  • Nov 22, 2022 6:31am Nov 22, 2022 6:31am
I also have a problem! An emotional problem!
When I trade and fail in that trade, it causes disappointment and I may not be able to trade for a few days, and also when I make a profit in a trade, I quickly become interested in doing the next trade!
And this is wrong

I still haven't found a solution to this problem!
  • #14
  • Nov 22, 2022 7:31am Nov 22, 2022 7:31am
I'd suggest that you might be trading positions that are too large, so you become monetarily/emotional invested in the +/- result.

If you reduce your trade size, to where the outcome becomes almost irrelevant, that takes away the emotional aspect of the true value of the trade result (whether postive or negative). Once you've done that, you have consider what you expect the outcome to be if you put on 10 trades. Do you expect all of them to work out? Half? 30/70? If you can afford to lose 100 trades...then who cares? If you can't afford to lose 10 trades, then that makes it obvious you are trading larger size than you can handle (mentally).

You almost need to learn to not 'care' about any particular trade, just as a gardener might not care if a few carrots don't grow, whereas someone growing plants for the Chelsea Flower Show would be heartbroken about losing a one or two prime carrots they'd just grown and picked (and the dog has just eaten).

You are farming...day in and day out. Same seeds, same dirt, but some grow and some don't. Try to figure out if how you are trading makes sense...are you setting yourself up by putting on buy trades in a strong (higher TF) down trend, which looks ok on the shorter TF's?

If you set trades up in slightly better position, you might do a bit better, but it sounds like you are too emotional, because you are mentally and emotionally tied to the trades working out.
  • #15
  • Nov 22, 2022 11:07pm Nov 22, 2022 11:07pm
A stop-loss order is an order placed with a broker to buy or sell a specific stock at a predetermined price. The purpose of a stop-loss order is to restrict an investor's loss on a security position.
  • #16
  • Nov 22, 2022 11:26pm Nov 22, 2022 11:26pm
Quoting Nefser
I'd suggest that you might be trading positions that are too large, so you become monetarily/emotional invested in the +/- result. If you reduce your trade size, to where the outcome becomes almost irrelevant, that takes away the emotional aspect of the true value of the trade result (whether postive or negative). Once you've done that, you have consider what you expect the outcome to be if you put on 10 trades. Do you expect all of them to work out? Half? 30/70? If you can afford to lose 100 trades...then who cares? If you can't afford to lose...
its true, I am emotional and money is not important to me at all!
and the failure of the deal affects my emotions!
failure in trading affects my self-confidence more than my capital and money!
  • #17
  • Nov 22, 2022 11:28pm Nov 22, 2022 11:28pm
Quoting Eelse16
A stop-loss order is an order placed with a broker to buy or sell a specific stock at a predetermined price. The purpose of a stop-loss order is to restrict an investor's loss on a security position.
I think you do not understand what is the topic of discussion
  • #18
  • Nov 23, 2022 5:11am Nov 23, 2022 5:11am
Quoting s.everest
{quote} its true, I am emotional and money is not important to me at all! and the failure of the deal affects my emotions! failure in trading affects my self-confidence more than my capital and money!
Well, then perhaps you should go see someone about your emotional state related to trading. Does this relate too other things in your life...playing cards with your friends, playing solitaire on your own?

Do you have to "win" and if you don't win, you go and sulk about it for hours/days?

You seem to be locked in to the idea that trades 'matter'. They don't matter. No one puts on 'good' trades, they only put on trades that happen to 'work out'. No one puts on bad trades (unless they are actually, really not thinking about the market), they are just trades that didn't 'work out'.

Do you somehow think if you put the right recipe together (check this indicator, check the news, pick a level, watch the price move...go!), you are guaranteed a 'win'? None of that is linked. The market just moves and we can put trades on virtually anywhere, as the market is so liquid.

Would you get upset if you put a toy boat in the waves, and it's washed up on shore...or pulled out to sea? Which situation did you expect/not expect, did you want/not want? Why is there a great emotional investment of either of those outcomes?

Why are you judging yourself and your trades so highly? The market is fickle and you need to adapt to that...otherwise, I'd have to suggest that you should probably not be trading, as you don't have the mental or emotional stability to do it.
  • #19
  • Nov 23, 2022 5:14am Nov 23, 2022 5:14am
Quoting s.everest
...i think Stop Loss is not a financial loss!
You're wrong. It is a direct reduction of your capital, which money you have put into your account. Don't trade what you can't afford (financially, emotionally, mentally) to lose.

It sounds like you can't "afford" some of those things, potentially because you expect to be...'smarter' than the market? Than other traders? That your trades are going to work out where others don't?
  • #20
  • Nov 24, 2022 8:46am Nov 24, 2022 8:46am
Quoting Nefser
{quote} Well, then perhaps you should go see someone about your emotional state related to trading. Does this relate too other things in your life...playing cards with your friends, playing solitaire on your own? Do you have to "win" and if you don't win, you go and sulk about it for hours/days? You seem to be locked in to the idea that trades 'matter'. They don't matter. No one puts on 'good' trades, they only put on trades that happen to 'work out'. No one puts on bad trades (unless they are actually, really not thinking about the market), they...
you are right
But I think these can be solved with more trading practice
Do you know a way to help me solve this problem?
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