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What do you prefer for trading?

  • Poll

  • What do you prefer for targets and stops?
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  • #1
  • First Post: Jul 2, 2008 10:47am Jul 2, 2008 10:47am
What do you prefer for trading? or in theory what do you think it is better.

1) Using very small Stop loss.. and Large Target profit with a lot of losing trades and a few but very profitable trades that compensate the losses.

2) Using large stoploss and very small target profit.. getting a high ratio of wins and very small number of losses

3) 50 / 50.. same target and stops and good strategy with more than 50% of wins.

4) other options.. (specify in the thread)

Please vote the poll.. also we cdan discuss it. I would be interested in how many traders use one or other system.

(If you don't have clear targets and stops when you trade... don't vote or don't reply.)

Thanks!
  • #2
  • Jul 2, 2008 1:20pm Jul 2, 2008 1:20pm
I'll give a bit of time to this thread.... so far only 1 vote.. and no replies... does it mean everybody doesn't know how much money they can lose or win in each trade? If so... I'm starting to know the answer to why 95% of traders fail... Money management is essential... and this question is very important to define your money management.
  • #3
  • Jul 2, 2008 2:11pm Jul 2, 2008 2:11pm
Other: Medium stoploss and big target.

It is all about reward:risk.
The market reveals who we really are...
  • #4
  • Edited 2:42pm Jul 2, 2008 2:39pm | Edited 2:42pm
No stop loss, I trade only gbp/jpy, with profits in diferent levels, buy scale in, if price is going up I by a micro lot, if it goes against me, buy more up, to a point, let say 10 lots are not going to give me a marging call if she goes 1000 pips against me, that's where I stop buying, take profit depends of how well I had enter, if I'm in favor of the interest rates swap or not, set up lot to acc size, always shosse a good entry for example if 10 people from the tread are going up and 3 down I go down, if all fundies are pointing north I go south, I use Dove-alliance indicator system, never fails, so a big drowdown, small profits, a lot size acording to the worst scenario and never lost a trade since january, it all depends what your goal is at the end of the month, some times I double the acc at the end of the month, some times I triple it, and some times I get so scare I want to change the strategy, but until now is been a hell of adrenaline rush, I scalp a lot so it balance the waiting on the drowdowns, my 2 cents, just my humble way of trade not a bigy, not a recomendations to newbys
The Chonchy
  • #5
  • Jul 2, 2008 2:46pm Jul 2, 2008 2:46pm
Quoting chonchy
No stop loss, I trade only gbp/jpy, with profits in diferent levels, buy scale in, if price is going up I by a micro lot, if it goes against me, buy more up, to a point, let say 10 lots are not going to give me a marging call if she goes 1000 pips against me, that's where I stop buying, take profit depends of how well I had enter, if I'm in favor of the interest rates swap or not, set up lot to acc size, always shosse a good entry for example if 10 people from the tread are going up and 3 down I go down, if all fundies are pointing north I go south, I use Dove-alliance indicator system, never fails, so a big drowdown, small profits, a lot size acording to the worst scenario and never lost a trade since january, it all depends what your goal is at the end of the month, some times I double the acc at the end of the month, some times I triple it, and some times I get so scare I want to change the strategy, but until now is been a hell of adrenaline rush, I scalp a lot so it balance the waiting on the drowdowns, my 2 cents, just my humble way of trade not a bigy, not a recomendations to newbys

wow... I was thinking in something like that one time... I couldn't do it... but in fact.. it makes a bit of sense in the way of scaling in positions... as big banks do. But they do it for not being detected with huge orders.
For your strategy you have to have a clear money management in mind... Be careful with your levels... as you add more to a losing position.. it could move your margin call level more than you think... Always ccalculate your margin call before. It is really a dangerous game.. risking too much.. but it can be profitable as you say.. if you dont' lose any trade.. but the time you lose one.. can wipe your account to 50%
  • #6
  • Jul 2, 2008 3:06pm Jul 2, 2008 3:06pm
Small stops/ large targets, as it only takes few trades to maximize profits. Its all about risk:reward and location of stoploss/profit take.
  • #7
  • Jul 2, 2008 8:17pm Jul 2, 2008 8:17pm
I guess that it would depend on the type of trading style one prefers. If one scalped, the answer would be different than the answer from one that traded long term.

Good Luck on Thursday my friend
"To Be A Successful Forex Trader, You Need A Successful Forex Mentor."
  • #8
  • Jul 2, 2008 8:25pm Jul 2, 2008 8:25pm
I trade on different time frames so I use different stop/loss , smaller time frames smaller stops.
  • #9
  • Jul 2, 2008 9:34pm Jul 2, 2008 9:34pm
Quoting emda
wow... I was thinking in something like that one time... I couldn't do it... but in fact.. it makes a bit of sense in the way of scaling in positions... as big banks do. But they do it for not being detected with huge orders.
For your strategy you have to have a clear money management in mind... Be careful with your levels... as you add more to a losing position.. it could move your margin call level more than you think... Always ccalculate your margin call before. It is really a dangerous game.. risking too much.. but it can be profitable as you say.. if you dont' lose any trade.. but the time you lose one.. can wipe your account to 50%
If say he makes each month. ( starting money $1000 )

+100% $2000
+200% $6000
-50% $3000 he's still in profit by 200%.

I've switched to using a averaging down system recently, market goes against me as long as overall trend direction holds out, i average down, 1 loser outta 14 and that wasn't system that was just dumb trading at the time.

It's better than closing a perfectly good trade at a bottom which is likely just abit of chop, then panicking going short then getting stopped as it chops against you.

The trend is your friend, but the price action within this is kinda random so don't try too hard to predict this and sorted!! if your long and it offers you a cheaper price in a uptrend, then its rude not to take it.

Yes the occasional draw downs will suck, but they happen say 10% of the time which to me is better than @50% of the time.
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #10
  • Jul 4, 2008 8:02am Jul 4, 2008 8:02am
The advantage of using small stops and big targets is that you lose a very small amount and a good trade can give you more than all the previous losses.
The problem is that you will have a bad ratio of wins. And you can be a bit discouraged at the beginning... but then the trade you were waiting comes.
So.. my opinion is that this kind of strategy is good try to pick bottoms or tops... this is not easy because the market usually knows this and makes a last push to stop those who think they got the top or bottom.

the other strategy... to get small profits and large stops.. gives you a high percentage of wins.. can be as good as 99%.. .. but that large stop can kill you all the work of the week or month... so I don't recommend it.
  • #11
  • Jul 4, 2008 10:56am Jul 4, 2008 10:56am
i saw that you noted if one were to have small stoplosses, then that means more losing trades. this isn't necessarily true. trading the dibs method, i can filter out quite a bit of the bad trades just by noting the surroundig price action. on another note, i also use larger stoplosses depending on the timeframe im trading on. the risk/reward ratio is always fairly decent on these trades as well. as time progresses along with the trades, i move my stoplosses up to break even and eventually surpass that point.
I dream, therefore I become.
  • #12
  • Jul 4, 2008 10:59am Jul 4, 2008 10:59am
Quoting mike w
i saw that you noted if one were to have small stoplosses, then that means more losing trades. this isn't necessarily true. trading the dibs method, i can filter out quite a bit of the bad trades just by noting the surroundig price action. on another note, i also use larger stoplosses depending on the timeframe im trading on. the risk/reward ratio is always fairly decent on these trades as well. as time progresses along with the trades, i move my stoplosses up to break even and eventually surpass that point.
I don't know the dibs method.... But at least you have more probabilities of hitting the stop before the target if you have small stop and big target. I'll check to see what's that dibs method.
  • #13
  • Jul 8, 2008 12:16pm Jul 8, 2008 12:16pm
It depends on the market, in a ranging market I make a 1:3 ratio in favour of the stop loss, when I am expecting a breakout it turns to 3:1 in favour of the TP (This ratio is also used by the news traders).
  • #14
  • Last Post: Jul 8, 2008 6:14pm Jul 8, 2008 6:14pm
As for me i have not been using stop loss. at least for 98% of my trades now i have not used stop loss and my broker has said dey will not give me margin call because dey saw i always trade mini lots despite having a standard account.
well maybe i will receive the margin call in the year 2010 when a trend breaks out and goes on like dat without looking back since i will not always use stop loss.
know thy edge and abide by it ! 4 in it shall thou be successful !
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