successful trader without stop loss? | Forex Factory

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successful trader without stop loss?

  • #1
  • First Post: Jan 13, 2010 6:09am Jan 13, 2010 6:09am
Hey guys,

I think it's my first post since some weeks after the first time joining this forum.

I want to know if someone ever knew or met traders WITHOUT stop loss who are successfully winning their trades.

What do you think?

George soros, or traders less popular than him...
  • #2
  • Jan 13, 2010 6:35am Jan 13, 2010 6:35am
Not using FIXED stop losses doesn't mean a trader can't devise a strict set of exit rules if things go wrong... along with low leverage and max DD allowed.
  • #3
  • Jan 13, 2010 6:37am Jan 13, 2010 6:37am
True. If you use low leverage you won't need hard stops. But of course you need a way to manage out of losing positions.
  • #4
  • Jan 13, 2010 6:43am Jan 13, 2010 6:43am
jr888,
based on your question, are u inclined or planning to trade without stops?
  • #5
  • Jan 13, 2010 6:49am Jan 13, 2010 6:49am
Quoting supremeChaos
jr888,
based on your question, are u inclined or planning to trade without stops?
What's wrong with that?
  • #6
  • Jan 13, 2010 6:52am Jan 13, 2010 6:52am
honestly I recently tried to do that and I won twice without any stop loss.

BUT. before I do this, I went looking around for fundamental news about the pair I trade.

What do you think?
  • #7
  • Jan 13, 2010 2:23pm Jan 13, 2010 2:23pm
Quoting hanover
Very simply, if you don't have some kind of exit strategy, there's potentially unlimited loss/drawdown on any trade, or (if you're using some kind of grid) set of trades. If you're willing to live with that, fine; it's a personal decision. But I would say two things: (1) allowing large drawdown on a single trade is effectively concentrating risk on a single forecast, and (2) never underestimate the truth in Keynes' words "the market can remain irrational longer than any trader can remain solvent".

Using lower leverage will allow you to...
if your not diversified in your trading and you are drawing down into one trade and dont set a % loss u deserve to be blown out. can be very controlled in your use of MM... but u r right no edge will come from just plain ol MM... doesnt mean u cant trade without a stoploss ..
  • #8
  • Jan 13, 2010 2:28pm Jan 13, 2010 2:28pm
Very simply, if you don't have some kind of exit strategy, there's potentially unlimited loss/drawdown on any trade, or (if you're using some kind of grid) set of trades. If you're willing to live with that, fine; it's a personal decision. But I would say two things: (1) allowing the potential for large drawdown on one particular trade is effectively concentrating extensive risk on a single outcome, making correct forecasting even more imperative; and (2) never underestimate the truth in Keynes' words "the market can remain irrational longer than any trader can remain solvent".

Using lower leverage will allow you to survive longer, but it reduces both risk and return in like proportion, slowing rate of recovery from drawdown. If you then increase leverage in an attempt to accelerate this recovery, then you risk increasing further loss, also. I don't know of a way to "manage out of losing positions" without also increasing risk in some way. MM in itself can never provide an edge.

Having the courage to stomach drawdown does not, in itself, guarantee success.

Floating losses suddenly become very real when your account eventually hits a margin call. I know that from personal experience. Survival through risk management must always be a trader's uppermost priority. Ignore it at your peril.
  • #9
  • Jan 13, 2010 7:48pm Jan 13, 2010 7:48pm
Quoting Xaron
What's wrong with that?
Nothing wrong, for sure.
just asking (for confirmation)
& letting him think this over, as trading without stop loss is not for everyone, imo.
  • #10
  • Jan 13, 2010 9:25pm Jan 13, 2010 9:25pm
After listening/attending to a number of professional traders seminars and reading a dozen or so top of the line trading books my conclusion is: "If a trader is thinking about going wihtout using stoploss then their trading carrier is indeed over before it even kicked off ...i.e. its a matter of time before they bite the dust"!

Dont even think about going wihtout stop loss otherwise market will teach a very painful lesson sooner or later.
  • #11
  • Jan 13, 2010 9:29pm Jan 13, 2010 9:29pm
Quoting jr888
honestly I recently tried to do that and I won twice without any stop loss.

BUT. before I do this, I went looking around for fundamental news about the pair I trade.

What do you think?
Thats pure luck ... my suggestions would be to start reading some serious trading stuff and re-evaluate your questions in view of knowledge acquired.
  • #12
  • Jan 14, 2010 2:52am Jan 14, 2010 2:52am
Quoting MktScape
After listening/attending to a number of professional traders seminars and reading a dozen or so top of the line trading books my conclusion is: "If a trader is thinking about going wihtout using stoploss then their trading carrier is indeed over before it even kicked off ...i.e. its a matter of time before they bite the dust"!

Dont even think about going wihtout stop loss otherwise market will teach a very painful lesson sooner or later.
That's simply BS, sorry. Those statements can only come from higher geared intraday traders. If you trade long term with low leverage (and 10:1 is NOT low leverage!) there is no need to use hard stops BUT of course you must have an exit strategy for bad trades.
  • #13
  • Jan 14, 2010 3:57am Jan 14, 2010 3:57am
Quoting doblece
Not using FIXED stop losses doesn't mean a trader can't devise a strict set of exit rules if things go wrong... along with low leverage and max DD allowed.
I will say agree whit this
  • #14
  • Jan 14, 2010 4:36am Jan 14, 2010 4:36am
Quoting Xaron
That's simply BS, sorry. Those statements can only come from higher geared intraday traders. If you trade long term with low leverage (and 10:1 is NOT low leverage!) there is no need to use hard stops BUT of course you must have an exit strategy for bad trades.
And you are living proof for that.
  • #15
  • Jan 14, 2010 5:07am Jan 14, 2010 5:07am
Quoting Tjpld
And you are living proof for that.
Thanks! But still in the need of improvements.
  • #16
  • Jan 14, 2010 8:13am Jan 14, 2010 8:13am
Quoting jr888
Hey guys,

I think it's my first post since some weeks after the first time joining this forum.

I want to know if someone ever knew or met traders WITHOUT stop loss who are successfully winning their trades.

What do you think?

George soros, or traders less popular than him...
Ya, successful losers don't use stop lose.
  • #17
  • Jan 14, 2010 8:34am Jan 14, 2010 8:34am
I believe that it would take an ultra disciplined trader to be able to trade without hard stoplosses even if they were only set up as an emergency SL.

Such traders do exist and there are even some on this forum.

However, i believe that for the average trader without a SL, he will be successful....until he is not.
  • #18
  • Jan 14, 2010 1:15pm Jan 14, 2010 1:15pm
I know a few traders who never use stop losses.

The catch is that they know exactly where they will exit the trade or what piece of news or fundamental information will signal that it is time to exit a position. In other words, they care more about the risk side of the equation than the reward side of the equation.

Most of the traders I know who don't use stops are those who are trading in markets where the size they are trading is a significant portion of the daily market volume. In other words, unless you have another method of protecting your capital, a stop loss is a necessity.
  • #19
  • Jan 14, 2010 2:14pm Jan 14, 2010 2:14pm
Why would you not set a stop loss?

The idea of a stop loss is that at that point you no longer consider your trade or analysis to be correct therefore you cut your loss.

It also defines your risk... which as a trader, you are supposed to be managing, right?
  • #20
  • Jan 15, 2010 1:46am Jan 15, 2010 1:46am
I use them rarely due to the fake breakouts in FX. It would be great if you could set a stop like "if the price closes(!) below the support at the daily, close the trade". As those orders are not possible, I do it manually.
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