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Trading without stop-losses

  • #81
  • Jun 11, 2010 3:19am Jun 11, 2010 3:19am
Quoting nubcake
heh i think we all have. it's necessary to do it at least once. but from this i infer that you now do the opposite and i'm almost certain i know what you are doing. gotta have a bigger stick always though.

Yes always have enough funds to enter some kind of trade and enough room to manuever no matter what happens. I can always trade in a relaxed manner which to me is the most important element of trading. You dont trade well when you think there is this gun to your head. You think better when no matter what happens you have options. I have to trade this way, it is how I am made.
  • #82
  • Jun 11, 2010 3:55am Jun 11, 2010 3:55am
Quoting nanningbob
Yes always have enough funds to enter some kind of trade and enough room to manuever no matter what happens. I can always trade in a relaxed manner which to me is the most important element of trading. You dont trade well when you think there is this gun to your head. You think better when no matter what happens you have options. I have to trade this way, it is how I am made.
a big 'edge' in trading is capital... or at least, available margin. capital is nothing if there isn't the free margin to match.
Congratulations ScalaFX for coming out of the closet!
  • #83
  • Jun 11, 2010 4:01am Jun 11, 2010 4:01am
Quoting Mr J
I simplified. How much I'd risk on subsequent coinflips would depend on how many are being offered, and what kind of capital I have. If I was just offered one coinflip, I'd go for 50%. If it were on offer until one side busts, I'd be more conservative.



Of course 10 losses in a row is possible, but theoretically everyone can have a string of losses to go bust. 10 wins are equally as likely, which would net something along the lines of 10 million for every $1 of capital. In those 10 flips and 100k, we're as likely to become the richest person in...
mr j, the problem with all the talk over the www about trading probabilities and 10 wins is likely and 10 losses likely etc etc and so on, is that a win or a loss is only a win or a loss once the position is closed. within that is the fact that if someone has 10 losses, or 100 losses, may not have had those losses except for the stoploss being triggered.

once a trade is opened there is one fact and one fact only.... the starting point of a position. once a stoploss is introduced there are now 2 facts which are the starting point of a position and the point at which the trade is a guaranteed capital loss.

as usual the discussion is all about perspective and context, and i'm sure you already know and understand what i have said, so my comments are purely an addition to what you have already said to give a more complete picture on the topic.
Congratulations ScalaFX for coming out of the closet!
  • #84
  • Jun 11, 2010 4:25am Jun 11, 2010 4:25am
To become successful you need at least one edge.

1st: Drop this stupid risk/reward stuff. It's pretty useless.
2nd: Use low leverage (and no, 10:1 isn't low. Use 1:1 or even below)
3rd: Don't use tight stops ever (the tighter the stops you need more precise entries which is very hard to reach due to the high noise in the lower timeframes)
4th: Entries are rather unimportant, the exit is where the money is made. Funny enough, most systems here care about the entry.
5th: Scale in and out. Why just using one entry with one stop and one target? If you believe that entries can't be optimal why entering a trade with one position? I enter a small one and add to this position.
  • #85
  • Jun 11, 2010 7:19am Jun 11, 2010 7:19am
i couldnt agree more

Quoting Xaron
To become successful you need at least one edge.

1st: Drop this stupid risk/reward stuff. It's pretty useless.
2nd: Use low leverage (and no, 10:1 isn't low. Use 1:1 or even below)
3rd: Don't use tight stops ever (the tighter the stops you need more precise entries which is very hard to reach due to the high noise in the lower timeframes)
4th: Entries are rather unimportant, the exit is where the money is made. Funny enough, most systems here care about the entry.
5th: Scale in and out. Why just using one entry with one stop and one target?...
one of these days
  • #86
  • Jun 11, 2010 8:54am Jun 11, 2010 8:54am
Quoting Xaron
To become successful you need at least one edge.

1st: Drop this stupid risk/reward stuff. It's pretty useless.
2nd: Use low leverage (and no, 10:1 isn't low. Use 1:1 or even below)
3rd: Don't use tight stops ever (the tighter the stops you need more precise entries which is very hard to reach due to the high noise in the lower timeframes)
4th: Entries are rather unimportant, the exit is where the money is made. Funny enough, most systems here care about the entry.
5th: Scale in and out. Why just using one entry with one stop and one target?...
amen
  • #87
  • Jun 11, 2010 9:54am Jun 11, 2010 9:54am
Quote
I can always trade in a relaxed manner which to me is the most important element of trading.

Exactly what I meant. This is extremely important to me. In fact even on the demo account I am simulating my 'moves', I get nervous if I open too large positions or if I am willing to suffer huge losses. That is me, of course; but it is something I have noticed in myself and I have to live with that and consider that.

Quote
to rephrase, if you do not have enough money to open 1 lot, but have enough to open 0.5, or 0.1, or 0.04, or 0.06 etc etc... then you are able to open SOME form of position.
I see what you are saying; but many brokers know a discrete world. This might be a good reason to open a very small account with Oanda: it is the only broker, which I am aware of, which lets you do that. As for Dukascopy, the minimum tradable lot is a micro-lot.

Xaron, thank you very much for your precious advices. I am trying to digest the information and, much more difficult, to be disciplined enough not to break (ever) these rules.

For the others, I understand there are many ways to skin a cat, but simply other ways are not for me; in general I am not willing to even theoretically contemplate the possibility of a huge loss with just one move.

Thanks all for the valid opinions: many thinks to think about.
  • #88
  • Jun 11, 2010 10:03am Jun 11, 2010 10:03am
not sure why you quoted that part only, because that part wasn't actually the point... or any point. move to the rest of my post instead and have a think.

there's no reason why x pip movement has to be considered "a huge loss". i think you haven't even considered the possibility of "building a position", which is what i was alluding to but in a certain context.
Congratulations ScalaFX for coming out of the closet!
  • #89
  • Jun 11, 2010 10:38am Jun 11, 2010 10:38am
nubcake,

thanks for the insight. I see what you meant, but what I meant referring to different brokers is that there is a minimum tradable lot, for the majority of them. In my case this minimum is equal to my actual budget: therefore I can not 'build a position'. It is just not feasible for me.

I could do that only if I were willing to significantly increase my leverage, which -I think you concur- should not be a sound strategy; or, at least, I would not be comfortable with that.

That is why I said "many brokers know a discrete world" and that is why I cited Oanda. Oanda allows you to do that, since it is almost a continuous world (in lot sizes the minimum tradable is a .001 micro lot).
  • #90
  • Jun 11, 2010 7:49pm Jun 11, 2010 7:49pm
Quoting Xaron
To become successful you need at least one edge.

1st: Drop this stupid risk/reward stuff. It's pretty useless.
2nd: Use low leverage (and no, 10:1 isn't low. Use 1:1 or even below)
3rd: Don't use tight stops ever (the tighter the stops you need more precise entries which is very hard to reach due to the high noise in the lower timeframes)
4th: Entries are rather unimportant, the exit is where the money is made. Funny enough, most systems here care about the entry.
5th: Scale in and out. Why just using one entry with one stop and one target? If...
Good summary. I think finding optimal entries is the hardest thing to do. You take your best shot and then adjust to price movement. It takes an understanding of having multiple levels but not martingaling. So to clarify 1:1 not so much for me but the guys here, If you put 1000 dollars in an account at 1:1 you could trade .01 or 1 penny and never have a margin call. You would have to run out of your own money to lose the account. The broker is only on the hook for the commission.
  • #91
  • Jun 11, 2010 11:56pm Jun 11, 2010 11:56pm
Quoting actarus
nubcake,

thanks for the insight. I see what you meant, but what I meant referring to different brokers is that there is a minimum tradable lot, for the majority of them. In my case this minimum is equal to my actual budget: therefore I can not 'build a position'. It is just not feasible for me.

I could do that only if I were willing to significantly increase my leverage, which -I think you concur- should not be a sound strategy; or, at least, I would not be comfortable with that.

That is why I said "many brokers know a discrete world" and that...
fair nuf. if you are stuck with an account where you don't have much available margin then you are stuck playing the entry / exit game, which no one seems to have really mastered except maybe james16... but that's far too slow a game for my taste and not worth the effort if you don't have the large capital to make significant gains off with small percentages.

edit : but then again, i have done the entry / exit game before and did quite well... it's all about the type of market you are facing and what strategy to employ. some find wild swings to be scary and non-tradeable, yet i find it to be perfect for a basic entry + stoploss method and can sometimes knock trades right out of the park. seems to be the few months up to and just past xmas where this market comes around. </ramble>
Congratulations ScalaFX for coming out of the closet!
  • #92
  • Jun 12, 2010 2:07am Jun 12, 2010 2:07am
I find this thread very interesting.

I am a noob who plays the entry / exit style very similar to james16 style. I find if I can keep my head in check and follow the style I have developed it works.

However, I can grasp the concept of a totally different approach. Trading outside the box on a more dynamic level.

I hope it is expanded on in this thread.

Cheers
  • #93
  • Jul 1, 2010 10:33am Jul 1, 2010 10:33am
I trade without a stop loss very successfully and consistently. I open a trade everyday at the same time and exit at the close of a bar, unless the trend continues, I'm allowed to continue for another bar if it's the best trade on the market currently.

I use the ATR to create my lot size. ATR of that pair = 3% of my account. I don't put a stop loss, I don't use Break stops even when I reach a profit.

The reason my system works is that there is money management involved. I monitor my lot size very closely and calculate it each time. Also, I win a small percentage more than I lose and my winners are a small percentage larger than my losers. This is how a winning trading system works.

Setting a stop loss allows you to get hit with the wild swings, if you're truly trading with the trend, those swings have no meaning, they are just swinging up to find more sellers or vice versa. If I used a stop loss, I would not be successful in forex, it's just my way of doing things. I've been trading stocks this way for years and forex is no different.

I will say this, since I always close at a certain time, this IS my stop loss. I never break that rule so I'm not in the whole mental game of letting my losses run and all that. I trade very black and white and it works.
  • #94
  • Jul 1, 2010 10:37am Jul 1, 2010 10:37am
Quoting nubcake
fair nuf. if you are stuck with an account where you don't have much available margin then you are stuck playing the entry / exit game, which no one seems to have really mastered except maybe james16... but that's far too slow a game for my taste and not worth the effort if you don't have the large capital to make significant gains off with small percentages.

edit : but then again, i have done the entry / exit game before and did quite well... it's all about the type of market you are facing and what strategy to employ. some find wild swings to...

Trading the fast time frames only works if you TRULY let your winning trades run and cut your losses short. My guess is that 99.9999999999% of traders do the opposite. I know I did for a long time, even when I thought I wasn't. You either need to develop a system that won't allow for that, or become an expert. I don't think you can become an expert by consistenly losing, so you need to create a system to keep you in bounds until you're 10year veteran.

Human nature makes it very difficult to trade freehand without rules in place.
  • #95
  • Oct 20, 2010 8:11pm Oct 20, 2010 8:11pm
Quoting lbranjord
I've been trading stocks this way for years and forex is no different.
of course there's a different..........you'll soon see what i mean..gud luck buddy!
  • #96
  • Oct 28, 2010 11:28am Oct 28, 2010 11:28am
Here's what I do, and it works for me:

Low leverage-- Stoplosses must account for leverage and how much you want to risk-- if you're overleveraged you can go through a string of losers and blow out your account.

Tight Stops-- if the trade goes against me-- I accept it and move on. Reenter if applicable. If you do get stopped and have to reenter-- big deal. With low leverage and a tight stop, that's hardly going to make a dent.

Trailing winners-- don't exit until the move is over. Addon positions as necessary. Let your winners run.

Precise but flexible entries-- there are a million ways to enter the market. The key isn't finding the "right" way but the way that works for you-- what's easiest for you to trade and understand.

Stay out of chop. Understand consolidation and don't get eaten by whippy markets. There will be other areas to trade. Precise entries and tight stops don't mean a thing during consolidation, but when consolidation breaks..
  • #97
  • Oct 28, 2010 7:44pm Oct 28, 2010 7:44pm
Quoting neverallin
Here's what I do, and it works for me:

Low leverage-- Stoplosses must account for leverage and how much you want to risk-- if...
if i may ask....how much do you usually trail stops your profit position....
  • #98
  • Oct 29, 2010 7:36am Oct 29, 2010 7:36am
Quoting Mr.Elliott
if i may ask....how much do you usually trail stops your profit position....
after getting my intial stoploss to breakeven, I use a modified ATR to trail my trade out. I take half out at my profit target and trail the second half. I adjust the ATR as necessary according to the market structure as well-- for instance, loose ATR when the market runs are very strong, tighter when the market tightens up and gives smaller runs.
  • #99
  • Dec 13, 2010 5:54pm Dec 13, 2010 5:54pm
Hi,
i have a stop loss its about 60-100 pips big.
i enter a position and add one more if i have a feeling that its gonna turn, if the market is moving fast i dont add and sometimes i close before the 60-100 pips... if the position goes 15 pips or more against me i try to close it near to breakeven or with a small loss, if it goes in my favor, sometimes i put a stop on breakeven or above the most recent high... so the number of the stops that really get hit are very very small in the last 3 months i never had a stop falling, the biggest floating was about 40 pips...
ive been trading like this for a very long time, and i dont leverage i only use the same lotsize that matches the equity in my account.
so its very comfortable, trading is not like a action movie, 99% of the time is just waiting for a good setup...
i'm not here to make millions from an 5k account , you should build a solide performance over a long period and then start a small fund/managed account, thats how i did, dont lose your time trying thousands of strategies , stick with one and concentrate on making it better, try to be consistent, and make a good performance,serious people would kill for a performance of 20% in one year... so everybody would die to invest in your managed account.

ask yourself why the biggest and most respected hedge fonds dont make more than 20-30% in their best years? right - if your a serious trader be realistic and treat trading like a real work, and not like a dream.
consistency wins
  • #100
  • Mar 16, 2011 9:21am Mar 16, 2011 9:21am
Hi everyone,

Currently I trade without using stop loss. I set take profit 30 pips. My strategy is defence. It is just like soccer, if you have good defence, nobody can score goal. Your MM is crucial. Never trade more than 1 percent OF your equity.

Let it float, rules of nature what ever go up, must come down and vice versa. Take at look at month TF and measure what is the highest drop in price ? From there you will know how much cushioning you needed to sustain that loss temporily. When the price goes up it will hit 30 pips take profit.

Now I trade with peace with no stress. The crucial is GOOD MM and PATIENCE !
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