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  • #75,521
  • Edited 3:20pm Mar 14, 2009 3:17pm | Edited 3:20pm
I blew three accounts, each time I learned tons, about myself and about this business through reading.

I don't don't trade with a with a stop but I do use mental stops. Using correct position sizing helped tons in going from a panicky trader that cuts profits and lets losses run, to a trader that makes consistent profit. I occasionally 'rescue' bad trades, i.e. if I sold and a trade goes against me, I wait for a topping signal and sell again. Keeping my entries small generally gets me out at 0 or at the very least mitigates the loss, this of course is done only in the direction of the main trend. Once I go red by a certain amount, I stop thinking about profit and only about recovery and evaluating what went wrong. I watch pivots, and price patterns that develop on low time frames around them, then weigh sentiment to pull the trigger.

I've been profitable since November doing this.
  • #75,522
  • Mar 14, 2009 3:18pm Mar 14, 2009 3:18pm
Quoting billye
I'm using position:acc=10:1 to amplify scalping ROI by x10, I have bad habits that if price run toward my -20 s/l, I change s/l to -100. >_< and sometimes if I long and price fall, I add a long order at lower price against trend in order to balance the avg price lower for an exit in choppy market...that gives me 20:1 sometimes... it has put me to -50 pips this week. I guess if I don't fix this bad habit. I will be wiped out soon.
your posts worry me. i dont see you lasting too long given your current MM. I highly recommend reading some money management methods while you are in FF to see what you could improve on.

Something to think about....stop loss should always equate to a maximum of 1% to 3% drawdown depending on how much risk you want to take (some go for a bit higher % drawdown but thats another story). So lets say your account is 1000 dollars. you say your stop loss is 20pips usually (which in my opinion is too tight since this whole recession/volatility hit). To have 1% drawdown, that would mean your pip sizes are 50cents each. To have 3% drawdown, your pip sizes are 1.50$ each. Now lets assume you use 3% drawdown per trade and you let what should have been a 20pip loss turn into a 100pip loss. You just increased your loss by 5times!. So 30dollars turns into 150dollars lost in an instant. that is 15% of your account on a single trade. less then 10 trades will wipe you out if you keep repeating this. Now if you stick to your original 20pip stop loss....it would take 5 times as many trades to wipe your account out. See the difference?

I also highly recommend doing trades with small pip sizes at first. Lets say for a 1000 dollar account...10cent pips is more then enough to get the feel for the markets. I also recommend you experiment with what is the right stop loss for you. You say you try for -20pips SL but you may let trades get to -100pips sometimes. Maybe your range for what you find comfortable as SL should be somewhere in the middle...lets say 60pip stop loss (3% for a 60pip stop loss would be 50cents per pip btw).

Just something to think about in the hope it helps you in the long run. If you do end up wiping your account....know that it happens to 99% of us at first...nothing to dwell upon..just learn from your mistakes and come back strong with more conviction but make sure you learned from your mistakes
Different opinions highly valued, ignorant to slander.
  • #75,523
  • Mar 14, 2009 3:20pm Mar 14, 2009 3:20pm
Quoting F.x.
What about all those times when getting stopped out means you just lost a lot of money you would have made had there not been a set SL?
If my S/L is hit at a loss, then it's just that and I move on. I can't win them all and $h!t happens! It doesn't happen as often as you think. But it does.

It also gets hit with profits locked in which after all, is the whole name of the game here. Occasionally, there will be a retrace and my S/L will be hit before the trend continues. Again, $h!t happens! But in that case, at least I walk away with more money than I started with.

I like trading larger time frames for that reason. Less retraces, less false moves or whatever the terminology of the day is.


Quoting F.x.
One solution that another member posted in the last week or so is to have 2 internet connections, brokers, and platforms. Though I personally do not (yet) have that type of setup and haven't had the need. However, here again, proper MM can (in theory) eliminate these issues.
An undersea cable broke last December and there was a massive internet disruption in South East Asia. Particularly India. It wouldn't have mattered for someone at the wrong place at the wrong time to have 1, 2 or 15 simultaneous internet connections. They all flunked.

Proper MM can eliminate these issues in theory just in the same way communism can in theory make everyone equal. There is always some room for one or more things to go wrong at the same time.

Nothing against you F.x. I believe that you're quite the skilled trader. Just that I happen to respectfully disagree with trading without a S/L.

Cheers,

J.W.
Not all sins are created equal
  • #75,524
  • Mar 14, 2009 3:21pm Mar 14, 2009 3:21pm
for 1st question, in preferences you can set a default s/l and t/p, mine is -20/+20, and when open limit order, that can be attached by default.

for 2nd, yes, on loss, add new position to lower average price on 10:1 leverage is so danger, I need to fix this habit.
Quoting F.x.
I don't understand how someone can "scalp" and have time to set a SL when entering, much less modify it while it's in play.

In terms of adding to your position as price moves against you, it just comes down to MM when placing your initial trade.

But you're blending scalping at high leverage with position-averaging, which is why you are getting in trouble w/ this.

You might try picking one or the other and going with that for a day or so just for perspective.
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  • #75,525
  • Mar 14, 2009 3:22pm Mar 14, 2009 3:22pm
I don't know why it is so generally accepted that 2% maximum loss is good money management. My mm will never let me lose more than 1%, if that. Most of the times is it less.

Why not trade a lot size so that 50 pips s/l is 1% of account value?
If you need bigger s/l then maybe you can consider waiting for a better entry?
New voice message: Why are you calling me? If I need you, I'll call you!
  • #75,526
  • Mar 14, 2009 3:22pm Mar 14, 2009 3:22pm
Quoting billye
did you test in fxgame they have that, but my fxtrade on limit order hit sometimes cannot open t/p & s/l order in 0.5 second, and change order for s/l and t/p sometimes don't respond in 0.5 second... slow as crawl... I guess what they do for a trailing stop is constantly emulate that you hand modify a s/l order, that can make system even slow I fear. >_<
I have not tested fxgame. I'm taking my sweet time in finding a new broker.
Not all sins are created equal
  • #75,527
  • Mar 14, 2009 3:23pm Mar 14, 2009 3:23pm
Quoting F.x.
They are working on that btw.
They have been saying that for years. So when Oanda says it, I say Bollocks. I believe in having a better chance seeing a battleship floating down Main Street than seeing trailing stops with Oanda.

What Oanda says and what they defecate has about the same consistency if you ask me.
Not all sins are created equal
  • #75,528
  • Mar 14, 2009 3:26pm Mar 14, 2009 3:26pm
Quoting SpecialEd
That's good input, thanks. So with a 271 pip S/L, the key, it would seem, was to trade a lot size small enough to still be good money management (like 2-3% in my books). Agree?
That's it. Money Management. If you trade without proper money management, you might as well play ice hockey without a cup. The pain in the nads is just about the same.

Now next week, if all goes well, I may be placing my S/L in a profit zone.
Not all sins are created equal
  • #75,529
  • Mar 14, 2009 3:27pm Mar 14, 2009 3:27pm
Quoting Jay Walker
They have been saying that for years. I believe in having a better chance seeing a battleship floating down Main Street than seeing trailing stops with Oanda.
Actually they do have it on there new Beta Demo platform...I use it for my demo account. They say they want to have it up and running on the live platform by next year -

I might be broke by then, but we'll see...
  • #75,530
  • Mar 14, 2009 3:27pm Mar 14, 2009 3:27pm
If I were not using SL, I think I would like SerpentDove's approach. The only problem with that, however, is that you are now thinking only about recovery, which distracts from the ability to make money.

I think Jacko's Alternative Hedging (I think that's his term) is a good method. The trade is behind you, but you've got a chance to re-enter and recover with only one trade on your mind.

I wonder, if I have the self-discipline to use a mental stop loss and close it manually, why wouldn't I go ahead and use that same price to set a fixed SL when I make the trade in the first place.

Thanks for all the feedback guys. I think this is good Saturday discussion. No trades on the line, time to ponder.

Jay, good to talk to you on the weekend man. Where's His Immenseness (D55)? Where's Quinn the Eskimo (AK)? I bet The Cajun (Gator) is catching redfish - or chasing Ned Beatty through the bayou. <chuckle>

Out.
Up or down, gimme a ticket
  • #75,531
  • Mar 14, 2009 3:28pm Mar 14, 2009 3:28pm
yes..psiholog you're right.

I use 10:1 position size, so -20 s/l is -2%. if I exec to that may be no problem...

the thing is I enlarge s/l to -100 when price running toward -20,
and when in red I open new position against trend... I simply don't like to close at a loss... and when using a leverage this can kill me.
20:1 and -100 pip in red could kick me out of the game I think.

it's important I fix this by some home practice.

Quoting psiholog
your posts worry me. i dont see you lasting too long given your current MM. I highly recommend reading some money management methods while you are in FF to see what you could improve on.

Something to think about....stop loss should always equate to a maximum of 1% to 3% drawdown depending on how much risk you want to take (some go for a bit higher % drawdown but thats another story). So lets say your account is 1000 dollars. you say your stop loss is 20pips usually (which in my opinion is too tight since this whole recession/volatility hit)....
  • #75,532
  • Mar 14, 2009 3:30pm Mar 14, 2009 3:30pm
Quoting SpecialEd
Jay, good to talk to you on the weekend man. Where's His Immenseness (D55)? Where's Quinn the Eskimo (AK)? I bet The Cajun (Gator) is catching redfish - or chasing Ned Beatty through the bayou. <chuckle>

Out.
Not sure where they are. I'd like to steal a cup o' Joe from D55. We're both coffee aficionados.

I think Quinn the Eskimo is taking care of his honeydo's.
Not all sins are created equal
  • #75,533
  • Mar 14, 2009 3:31pm Mar 14, 2009 3:31pm
Quoting KillerWhale
I don't know why it is so generally accepted that 2% maximum loss is good money management. My mm will never let me lose more than 1%, if that. Most of the times is it less.

Why not trade a lot size so that 50 pips s/l is 1% of account value?
If you need bigger s/l then maybe you can consider waiting for a better entry?
this relates to account size only. if your account is 100,000...1% stop loss is more then enough. That means you risk losing 1000 dollars per trade but on the other hand your take profit may be 2%. That is alot of money to the average person.

now lets say your account size is small....1,000. That 1% equates to 10 dollars while a winning trade may bring 20dollars or something...i cant even buy enough ciggaretees to last me one week with that kind of ratio haha...let alone support myself in the future.

There are 2 traders in FX who are trying to make it in my opinion. There are those who have quite a bit of money to start with...(over 50k probably) which means the urgency of making money is not there. Then there are those who start with a small account in the hope of making forex their career (like myself) where there is not alot of money to start with. The urgency to make money in the second case is there therefore taking higher risks is worth it..especially given the size of the account is much smaller
Different opinions highly valued, ignorant to slander.
  • #75,534
  • Mar 14, 2009 3:32pm Mar 14, 2009 3:32pm
you're using 2:1 leverage in that case... chances per day to get 1% gain is less.

while using 10:1 and scalp 10 pips is 1% gain.

simply more leverage more chance but less profit target for sure...

add onething, if I predict one thing will move market, I want to get in and get out before next market mover happen...

so use leverage to scalp small pips shortens time I have open position in the market.

Quoting KillerWhale
I don't know why it is so generally accepted that 2% maximum loss is good money management. My mm will never let me lose more than 1%, if that. Most of the times is it less.

Why not trade a lot size so that 50 pips s/l is 1% of account value?
If you need bigger s/l then maybe you can consider waiting for a better entry?
  • #75,535
  • Mar 14, 2009 3:34pm Mar 14, 2009 3:34pm
OK, two things I've heard today that I agree with: (1) choose better trades and SL is not so much the worry; and (2) it is important to use Stop Loss. Don't think anyone will talk me out of that.

For anyone having problem with that, including those who think the computer/broker is "watching them", I strongly suggest practicing on your demo account. I think one has to read and study a lot to get better at picking the right trades or the right time to trade, but if that same person trades a demo account for two solid weeks always using SL, I bet he gets a good feel for levels to set it at. Remember, it all starts with money management, the percentage of your account you are willing to risk in all open trades.
Up or down, gimme a ticket
  • #75,536
  • Mar 14, 2009 3:35pm Mar 14, 2009 3:35pm
Quoting Jay Walker
Not sure where they are. I'd like to steal a cup o' Joe from D55. We're both coffee aficionados.

I think Quinn the Eskimo is taking care of his honeydo's.
hmm, aficionados or addicts?
Up or down, gimme a ticket
  • #75,537
  • Mar 14, 2009 3:37pm Mar 14, 2009 3:37pm
Quoting psiholog
this relates to account size only. if your account is 100,000...1% stop loss is more then enough. That means you risk losing 1000 dollars per trade but on the other hand your take profit may be 2%. That is alot of money to the average person.

now lets say your account size is small....1,000. That 1% equates to 10 dollars while a winning trade may bring 20dollars or something...i cant even buy enough ciggaretees to last me one week with that kind of ratio haha...let alone support myself in the future.

There are 2 traders in FX who are trying...
Ah Grasshopper, I beg to offer up a 3rd kind of trader: those of us who had a lot of money, lost it and are now clawing our way back. Believe me, the urgency is greater with the 3rd.
Up or down, gimme a ticket
  • #75,538
  • Mar 14, 2009 3:39pm Mar 14, 2009 3:39pm
Quoting KillerWhale
I don't know why it is so generally accepted that 2% maximum loss is good money management. My mm will never let me lose more than 1%, if that. Most of the times is it less.

Why not trade a lot size so that 50 pips s/l is 1% of account value?
If you need bigger s/l then maybe you can consider waiting for a better entry?
This may be the smartest thing said today, seriously.
Up or down, gimme a ticket
  • #75,539
  • Mar 14, 2009 3:40pm Mar 14, 2009 3:40pm
Quoting Jay Walker
They have been saying that for years. So when Oanda says it, I say Bollocks. I believe in having a better chance seeing a battleship floating down Main Street than seeing trailing stops with Oanda.

What Oanda says and what they defecate has about the same consistency if you ask me.
North Korean my arse. The only guys I know who use the word Bollocks are my Irish buddies, and I do recall you like Guinness.
Up or down, gimme a ticket
  • #75,540
  • Mar 14, 2009 3:42pm Mar 14, 2009 3:42pm
See ya guys. Off to the movies with tha little woman. Where's that picture of Lilith Doll?
Up or down, gimme a ticket
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