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  • #75,481
  • Mar 14, 2009 1:28pm Mar 14, 2009 1:28pm
Quoting SpecialEd
Ok friend, I've read two consecutive posts from you about not using stops....
If you don't mind Ed, I would like to ad a few questions. What if the platform goes down for a while? What if there is a power failure and you can't do anything about your trades? What if you had to evacuate and be forced to leave your station?

We're always hoping that these situations never happen. Unfortunately they do from time to time. If such situation came up, what would you do?
Not all sins are created equal
  • #75,482
  • Mar 14, 2009 1:40pm Mar 14, 2009 1:40pm
Quoting Jay Walker
If you don't mind Ed, I would like to ad a few questions. What if the platform goes down for a while? What if there is a power failure and you can't do anything about your trades? What if you had to evacuate and be forced to leave your station?

We're always hoping that these situations never happen. Unfortunately they do from time to time. If such situation came up, what would you do?
Good questions, Jay. I've always thought that an entire thread could be devoted to this topic. FX has gotten us going here. Will eagerly await his response.

Jay, when you say you always get stopped out, I guess you mean you get stopped out by the trailing stop, right? What logic do you use to set your stop initially, until your trade gets to the minimum broker's TSL (in the case of IBFX, 15). I don't recall which TF you trade, but I'm betting longer TF and therefore bigger SLs.

Excuse me for prying. I just always feel that we talk "around" this subject and never really flesh it out for anyone's benefit.

Thanks,
Ed

P.S. I'm off for Saturday, but will be checking back.
Up or down, gimme a ticket
  • #75,483
  • Edited 1:54pm Mar 14, 2009 1:45pm | Edited 1:54pm
Quoting Jay Walker
I use no T/P as I believe in the "let your profits run" philosophy.

I also believe in minimizing risks. So I do use a S/L.

So I always end up getting stopped out of a trade.

I'm I the only one who uses a S/L for the opposite of what it's designed for?
You are doing a right thing. It is better to Make Book than Bet. Ever got a chance of meeting a horse race book-maker? If not, please find one and get amazed how they make consistent profits in a game of chance. Horses follow no s/r or fibs to give them an edge. And, most of the time second and third favorites do not bring enough to cover the payouts on winner. A penciller may provide some more info on that.
The Thief of Wall Street
  • #75,484
  • Mar 14, 2009 1:46pm Mar 14, 2009 1:46pm
Quoting Jay Walker
I use no T/P as I believe in the "let your profits run" philosophy.

I also believe in minimizing risks. So I do use a S/L.

So I always end up getting stopped out of a trade.

I'm I the only one who uses a S/L for the opposite of what it's designed for?
No not at all Jay, I only use a TSL to take me out of a trade - unless I can recognize a price pattern that I think will move against me, then I'll manually close the trade to save a few pips. BUT for the most part, I am taken out by my stop...
  • #75,485
  • Mar 14, 2009 1:58pm Mar 14, 2009 1:58pm
Quoting F.x.
This is a common way to feel but you must understand that it's not Oanda's fault. They're just matching buyer and seller at YOUR specified price.

If the goal is to make money here, why would you openly offer a buyer to take your item for less than anyone else is willing to take for it? Especially if it means you're losing money to make that happen? That just doesn't make sense to me.
I just wonder how you would react if a trade really goes a few thousand pips against you. If you can handle that without s/l it's gonna take so much margin that trading that account can't be fun anymore
New voice message: Why are you calling me? If I need you, I'll call you!
  • #75,486
  • Mar 14, 2009 1:59pm Mar 14, 2009 1:59pm
me too, always stop out if use a tight s/l.the now gone Shakes says t/p at +10 for half position, then let profit run with 2nd half position s/l at break/even.is that a good idea vs s/l at +5pip to lock profit or vs trailing stop? or vs fixed profit goal say +20pips.sounds at least ensures 5pips profit in case profit run goes into a reverse trend.random walks goes at about 10pips max, this can still collect half position of 10pips.I never tested his strategy.
Quoting Jay Walker
I use no T/P as I believe in the "let your profits run" philosophy.

I also believe in minimizing risks. So I do use a S/L.

So I always end up getting stopped out of a trade.

I'm I the only one who uses a S/L for the opposite of what it's designed for?
  • #75,487
  • Mar 14, 2009 2:02pm Mar 14, 2009 2:02pm
there is always a stoploss... the margin call level...
trading without stoploss means trading with the full stop that a margin call can give you. This depends then on the leverage used. Since trading is only about money management... trading without stoploss is perfectly ok.
  • #75,488
  • Mar 14, 2009 2:04pm Mar 14, 2009 2:04pm
Oh by the way,
Everyone has s/l always in place.
Its called

MARGIN CALL
New voice message: Why are you calling me? If I need you, I'll call you!
  • #75,489
  • Mar 14, 2009 2:05pm Mar 14, 2009 2:05pm
I believe what you says only exist in stocks where you buy when no one was in market, for just 1$ a share, and now it's jumping between 10~20$... and use no leverage... you can basically forget about you have this holdings at all..if forex use a leverage of position size:acc size >20:1 for amplify scalping profit... who can bare -200 pips in red?
Quoting KillerWhale
I just wonder how you would react if a trade really goes a few thousand pips against you. If you can handle that without s/l it's gonna take so much margin that trading that account can't be fun anymore
  • #75,490
  • Mar 14, 2009 2:07pm Mar 14, 2009 2:07pm
Quoting F.x.
Could have been prevented by using proper MM and manually exiting poor trades for a loss.
what you say here is alot simpler then it actually is. Here's why.

Trading is 90% psychology to me. As I use no real indicator I use my gut instinct to determine whether I place a trade when the levels I am looking for entries at are reached...as well as exits in the profit area where I feel I have made enough profit trade which usually ends up being no more then 50pips.

Now as I mentioned in May I had 100% winning ratio. That built tremendous confidence within me and let me know, psiholog is never wrong, price action will always respect what psiholog does. Psiholog cannot lose, psiholog is the greatest trader that was ever born. Psiholog will not accept a loss because in the end psiholog is always going to be right.

You see I too just like everyone else had strong emotional issues when I first started. Being wrong is an issue that I just could not accept and even when the most logical thing to do was close a losing trade that I should have done in June, I just could not bring myself mentally to push that close button. In fact...I was prepared to see my entire account evaporate instead of admit that I was wrong on a trade. I speak for myself when i say this (although im sure many others have similar experiences)....manually exiting a poor trade when using no stop loss and pa has moved alot against me was the most difficult thing I had to do at that particular time
Different opinions highly valued, ignorant to slander.
  • #75,491
  • Edited 2:10pm Mar 14, 2009 2:09pm | Edited 2:10pm
Quoting billye
me too, always stop out if use a tight s/l.the now gone Shakes says t/p at +10 for half position, then let profit run with 2nd half position s/l at break/even.is that a good idea vs s/l at +5pip to lock profit or vs trailing stop? or vs fixed profit goal say +20pips.sounds at least ensures 5pips profit in case profit run goes into a reverse trend.random walks goes at about 10pips max, this can still collect half position of 10pips.I never tested his strategy.
I tried it once for about two weeks. It worked, but I am not sure if it has much utility in long term apart from certain situations.

Will highly appreciate if someone helps us on this by sharing experience oo take 50% profit, bring other 50% position to BE strategy.
The Thief of Wall Street
  • #75,492
  • Mar 14, 2009 2:15pm Mar 14, 2009 2:15pm
omg.. Margin Call dont remind me of my horrors
  • #75,493
  • Mar 14, 2009 2:21pm Mar 14, 2009 2:21pm
thanks for sharing chicky... I guess risk is at how is the probability t/p at +10 can be hit.when i enter a trade on a few chosen indicators, 1/3 of times it can hit +5 t/p, 2/3 I try to exit at 0 s/l... (while 1/9 runs into red for a while before exit at 0)I worry that if I change profit target to +10 t/p, chance will drop for sure if do not improve market entry decision system,then maybe only 1/9 of times +10 t/p can hit, then for 8/9 times,if I can only exit at 0 s/l 6/9 times, then 2/9 times will run into a loss.I'm still new and I don't like losses even 0 s/l, many times I 'let loss run' into a disaster...so I still am sticking with high probability trade, meaning enter a big trend with a very small t/p goal...choosing a entry for high confident +10 t/p is still very hard thing for me. I guess it takes a quite for me to be able to make it work.
Quoting Chicky
I tried it once for about two weeks. It worked, but I am not sure if it has much utility in long term apart from certain situations.

Will highly appreciate if someone helps us on this by sharing experience oo take 50% profit, bring other 50% position to BE strategy.
  • #75,494
  • Mar 14, 2009 2:23pm Mar 14, 2009 2:23pm
Quoting Chicky
Will highly appreciate if someone helps us on this by sharing experience oo take 50% profit, bring other 50% position to BE strategy.

there is nothing wrong with that... but many times you will be stopped at BE and then you realize that you are trading with half leverage only... but.. sometimes it doesn't get stopped... and you can run that trade for weeks... then it is really worth to do it. Don't get desperate if 95% of the times gets stopped at BE.. So . my conclusion is that it is a good practice.. but will not get profits quicker than other methods. It's a more conservative trading style.
  • #75,495
  • Edited 2:26pm Mar 14, 2009 2:23pm | Edited 2:26pm
Quoting psiholog
....... I just could not bring myself mentally to push that close button. In fact...I was prepared to see my entire account evaporate instead of admit that I was wrong on a trade.
With my experience, you may also be thinking at that time that, If I exit now:
1. It will take a great deal of time and effort to find another opportunity and recover what I have lost so far on this trade

2. I will not have same leverage available for the next trade, again more time and effort in covering this drawdown

3. I will require even a bigger move in my my favor to recover,with a lesser margin .....

4. There is no guarantee that my next trade will go in my favor and not against once again

5. I have come so far, now it should reverse. I am therefore in a better position now than for the next trade

And you receive a Margin Call!
The Thief of Wall Street
  • #75,496
  • Mar 14, 2009 2:27pm Mar 14, 2009 2:27pm
ooops, sounds, good emda, maybe I will try next week for more conservative version, 50% position t/p at +5 profits; and 50% position s/l at b/e and let profit run. so you're saying that worst case I get is most trades finish at 50% profit than before... and get 1 or 2 surprises every week. I'm maybe okey with this.
Quoting emda
there is nothing wrong with that... but many times you will be stopped at BE and then you realize that you are trading with half leverage only... but.. sometimes it doesn't get stopped... and you can run that trade for weeks... then it is really worth to do it. Don't get desperate if 95% of the times gets stopped at BE.. So . my conclusion is that it is a good practice.. but will not get profits quicker than other methods. It's a more conservative trading style.
  • #75,497
  • Mar 14, 2009 2:28pm Mar 14, 2009 2:28pm
i will also add one great example of stop loss vs no stop loss as experienced this week!

we all know the W talk i had up till wednesday. it was a great trading week for me until that point. 250pips up (breaking my 50pip per day average i had for the past 6 weeks). But then something that has never happened to me since I started FOREX did happen. I felt shitty.

I was in no mood to trade. I felt the best trade to do at that particular time is to not even open the forex platform. Which is exactly what i did...i decided its best to relax and sleep away my terrible "sickness" and come back when i am prepared. I ended up sleeping most of the day with a few brief intermissions for what guys my age do ....(anime haha). So I wake up during the US stock market session.

I think im ready to trade...i feel right..i think (later on i found out i still wasnt mentally right for trading). So...feeling this way...i look at pa real quickly. price was at 1.2745. I place a trade thinking this bad boy is going to drop hard. THat did not happen. I get stopped out at 1.2795. I take a minute to look and see whats going on....i see that yet another W was forming on the 15min chart with the neckline at 1.2825 or so. I decide to sell again here thinking oh its the high of the week its going to go down and blah blah blah. (and this is how i realized later i was not mentally right for trading). I ended up being 100pips down...bring my average for the week back to 150. Now in the market that followed later with a tight range i managed to get 50pips back...be at 200+ for the week when i could have been over 350 if only i played that W right when it came.

Now imagine I was still trading with no stop loss. I would have had that initial sell at 1.2745. Price action moved as high as 1.2950. 200pips higher. Now yes my long term bias is very bearish with the maximum target to the upside no higher then 1.3000 (the double top i mentioned). But on the other hand...theres alot of news this weekend. Who knows it may be even enough for another leg up to at least 1.3300. SO the idea is....had I used no stop loss on that particular trade at 1.2745 as i used to do not too long ago...I not only would have given back all my weeks gains but risked losing even more with the potential gap this weekend. Not to mention the time wasted waiting for pa to come back into positive territory on that particular trade
Different opinions highly valued, ignorant to slander.
  • #75,498
  • Mar 14, 2009 2:30pm Mar 14, 2009 2:30pm
Quoting Chicky
With my experience, you may also be thinking at that time that, If I exit now:
1. It will take a great deal of time and effort to find another opportunity and recover what I have lost so far on this trade

2. I will not have same leverage available for the next trade, again more time and effort in covering this drawdown

3. I will require even a bigger move in my my favor to recover,with a lesser margin .....

4. There is no guarantee that my next trade will go in my favor and not against once again

5. I have come so far, now it should reverse....
excellent post...that is exactly what happened....now i dont regret that this happened...its crucial to blow your account once or twice to figure out what your doing wrong and if blowing up my account never happened...the things even you mention here i would have never known
Different opinions highly valued, ignorant to slander.
  • #75,499
  • Mar 14, 2009 2:32pm Mar 14, 2009 2:32pm
yes, I come to realize that 0 s/l is one of the beautiful things in trading. because it gives me life to live on, and sets my mind free to go to sleep or work yet I cannot master it very well still... 0 s/l knocks me out 95% of times before I get a profit taken.
Quoting Chicky
With my experience, you may also be thinking at that time that, If I exit now:
1. It will take a great deal of time and effort to find another opportunity and recover what I have lost so far on this trade

2. I will not have same leverage available for the next trade, again more time and effort in covering this drawdown

3. I will require even a bigger move in my my favor to recover,with a lesser margin .....

4. There is no guarantee that my next trade will go in my favor and not against once again

5. I have come so far, now it should reverse....
  • #75,500
  • Mar 14, 2009 2:32pm Mar 14, 2009 2:32pm
Quoting SpecialEd
Jay, when you say you always get stopped out, I guess you mean you get stopped out by the trailing stop, right? What logic do you use to set your stop initially, until your trade gets to the minimum broker's TSL (in the case of IBFX, 15). I don't recall which TF you trade, but I'm betting longer TF and therefore bigger SLs.

Excuse me for prying. I just always feel that we talk "around" this subject and never really flesh it out for anyone's benefit.

Thanks,
Ed

P.S. I'm off for Saturday, but will be checking back.
The great people at Oanda, in their infinite wisdom, couldn't be bothered to program a platform with trailing stops. So when I say I'm stopped out, it's not a trailing stop. At least, not in the sense that it's automated.

Initially, my S/L is just wild. For instance, I went long at 2827 this week on the daily chart.

From that point, I have to make a decision on how long I believe the trend will last. This will affect where my S/L will be.

If I think it won't last too long (or feel like quick cash), I set my S/L at the last low.

If I think it will last a while, I will use the last Parabolic SAR point. The catch with that one is that if I find myself with a so called "parabolic oops", I'm SOL as my S/L can be way way below my entry point.

To go back to my long entry at 2827, I have done it on the daily chart but I now believe that there may be potential on the weekly chart. So I placed by S/L at 2556 which is the lowest weekly point on the candle.

And no, you're not prying. If this helps anyone, even if it turns out to be an example of what not to do. It will have served a purpose.
Not all sins are created equal
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