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Real Fx traders do not use stoploss

  • #21
  • Mar 18, 2011 6:09am Mar 18, 2011 6:09am
Agree with you guys. But if they don't use for preventing of lossing money. I think they can be always on the market. As a stop loss they use hedging. Or they have a to trades open always.
For instance trading capita: 10.000.000 $
They enter the market with to trades
Short: 5.000.000$
Long: 5.000.000$

When the market goes up, they close short trade, or change the lot size.

Any comments?
  • #22
  • Mar 18, 2011 8:02am Mar 18, 2011 8:02am
Quoting josef
Agree with you guys. But if they don't use for preventing of lossing money. I think they can be always on the market. As a stop loss they use hedging. Or they have a to trades open always.
For instance trading capita: 10.000.000 $
They enter the market with to trades
Short: 5.000.000$
Long: 5.000.000$

When the market goes up, they close short trade, or change the lot size.

Any comments?
Of course there are always stoplosses, many kind of thing that prevent us or them to go further in loss means the same, can be a mental state, an automated system, or else. Because basically it's about how we minimalize risk properly.
  • #23
  • Mar 18, 2011 9:24am Mar 18, 2011 9:24am
Quoting JohnFX_King
The Title of the thread that makes me smile. In my opinion no Stop losses mean you are 100% sure where the price will move. Forex is not a bank where you can put money and come in a year to take them out with the profit. Forex is the place to invest risk capital and there is always chance that something will happen and effect your trade. ( Like situation in Japan right now). Doesn't matter what kind of stop losses, but they should be.
.

This method is not for everyone .
It is for those who know where they are in the wave structure of everymarket they trade from time to time they know where they are before placing any trade.

It is for those who understand that though currency and commodity correlate but it is not all the time( atimes correlations get broken).

It is for those who can stick to their plans with a tight religious-like discipline.

IT IS for those who can exercise patience and for those who also know when to close at a loss even without a stoploss, if they wish ,by doing their maths and knowing how to balance up.

It is not for scalper ....I have my reasons

It is not for those who want to make it all quick

It is for those who have been frustrated by having their stoploss hit all the time and it appears as if they do not know what they are doing again and now they want a change

If is for those who see their platform as a bank and not a conduit for losing hard earned cash.
  • #24
  • Mar 18, 2011 9:55am Mar 18, 2011 9:55am
Ok I am a bit confused with the term "Real FX traders". To me, any professional full-time FX traders are "Real FX traders'. And I will tell you, not only does professional traders use stoploss but they accompany it with every single trade that they enter. In the face of rapid price movement against them like the Yen intervention that we just saw last night, stoploss is the only way to limit your loss and protect your capital.

Now, if you are referring to institutional traders from those banks and investment houses as "Real FX traders", they don't need to use stoploss that much because they are not in the market primarily for speculations. They are there primarily to exchange, to exchange one unit of money for another on behalf of the company that employed them. They ARE the MARKET. They can do whatever they want. There is no "losses" in the sense that we understand for them. So stoploss is not that needed for them.
Make your losses in demo. Earn your profits live.
  • #25
  • Mar 19, 2011 7:10am Mar 19, 2011 7:10am
Quoting JohnFX_King
The Title of the thread that makes me smile. In my opinion no Stop losses mean you are 100% sure where the price will move. Forex is not a bank where you can put money and come in a year to take them out with the profit. Forex is the place to invest risk capital and there is always chance that something will happen and effect your trade. ( Like situation in Japan right now). Doesn't matter what kind of stop losses, but they should be.


I think that depend on your trading style. For example me, im using scalping technique, so i have to make decisions in seconds, i dont have time to create stop loss or take profit
  • #26
  • Mar 19, 2011 8:27am Mar 19, 2011 8:27am
Quoting Forexia
There is no "losses" in the sense that we understand for them. So stoploss is not that needed for them.
It's just a bias about stop loss we usually know. The banks call it inefficiency preventing (in the term of unnecessary action) which can also be marked as stop loss. When a bank needs to bid eur/usd with 1,000,000 lots for example, the stop loss means "iceberging", imagine if they shot in to the market with 1,000,000 at one bid? The price will sky rocketed & make it inefficient for them, so they'll split the contract smaller then do some averaging bid in different time execution to disguised it from the crowd.
  • #27
  • Mar 29, 2011 3:14am Mar 29, 2011 3:14am
Quoting Forexia
Ok I am a bit confused with the term "Real FX traders". To me, any professional full-time FX traders are "Real FX traders'. And I will tell you, not only does professional traders use stoploss but they accompany it with every single trade that they enter. In the face of rapid price movement against them like the Yen intervention that we just saw last night, stoploss is the only way to limit your loss and protect your capital.

Now, if you are referring to institutional traders from those banks and investment houses as "Real FX traders", they...
Hi,

you are not right about this, every FX trader wheter it's market maker or prop trader need to manage his losses. If you are a market maker you need to fill the budget like you need it to fill as a prop trader, it depends. Yes it's true that you are primary there for exchange, but when you are quoting the bid/ask for someone you are just adding to your positions if he takes it and believe me sometimes you can get very shitloaded and it's your job to manage it and not to lose.

Mike.
  • #28
  • Mar 31, 2011 7:08pm Mar 31, 2011 7:08pm
In my opinion, The term stop loss is too broad of a term.

In my trading, I have at least four definitions of a stop loss.

safety net stop (in case power goes out)
mental stop (because I always monitor my open trades)
Break even stop
trailing stop

Those are the 4 types of stop losses that I use.

Here are a couple more:
fixed stop (never move it)
stop out (margin is below requirement of you broker)

Can anyone think of more kind of stops?

~Tim
  • #29
  • Edited 4:48am Apr 1, 2011 4:39am | Edited 4:48am
What part of that really sounds like a good idea? How do you prevent loss if the market doesn't do what your thoughts, research, analysis, crystal ball tell you? Respect price action. It is a sly creature with a a lot a variables. Unfortunately, too many of them don't come to light until after the trade has stopped out and you can reflect.
Take all you can, give nothing back!
  • #30
  • Apr 1, 2011 4:43am Apr 1, 2011 4:43am
Quoting josef
Agree with you guys. But if they don't use for preventing of lossing money. I think they can be always on the market. As a stop loss they use hedging. Or they have a to trades open always.
For instance trading capita: 10.000.000 $
They enter the market with to trades
Short: 5.000.000$
Long: 5.000.000$

When the market goes up, they close short trade, or change the lot size.

Any comments?
I used to do that until the NFA stopped me.
Take all you can, give nothing back!
  • #31
  • May 28, 2011 4:18am May 28, 2011 4:18am
I support humility 100%. What people don't know is: there is a reason why more than 90% of forex traders fail. And that reason is: they have all been trained to trade in a particular way. All of them put stoplosses below a swing low or above a swing high, below the low of a bearish pin bar etc. These are VERY obvious places and market makers will always hunt you down!! Successful traders are contrarian. They do exactly what everybody else is afraid to do. I have ever trippled an account in a month and I did it without a stoploss. I ended up blowing it all and ever since I tried to re-create the "magic" to no avail. Then it hit me! The only reason I lost is because I leveraged myself too high otherwise my chart reading skills were good enough. All I needed to do is cut my risk down. Trading involves techniques of both making money and preserving capital and trust me hitting a stoploss every other day is NOT preserving capital. Thanx for the great insight Humility and if you dont mind I would like to exchange a few emails with you. my email address is [email protected]. Hit me up.
  • #32
  • May 31, 2011 9:54am May 31, 2011 9:54am
Quoting jkironde
I support humility 100%. What people don't know is: there is a reason why more than 90% of forex traders fail. And that reason is: they have all been trained to trade in a particular way. All of them put stoplosses below a swing low or above a swing high, below the low of a bearish pin bar etc. These are VERY obvious places and market makers will always hunt you down!! Successful traders are contrarian. They do exactly what everybody else is afraid to do....
using no stop losses is financial suicide, except you are investing like warren buffett, then a stop loss obviously doesn't make sense.
  • #33
  • May 31, 2011 11:02am May 31, 2011 11:02am
Quoting Custos
using no stop losses is financial suicide, except you are investing like warren buffett, then a stop loss obviously doesn't make sense.
yup. just don't say that in the most popular thread on the planet where all of the muppets go to worship. you'll make them cry....

in a world where most lose does it really take such mental capacity to see why a thread that permits or encourages no stoplosses, no, even enforces no stoplosses, is the most popular amongst the foolish? anytime you permit losers to stop losing for some period of time is obviously going to bring in the masses of failures willing to sign-up and drink the koolaid.

why is it that real fx traders do not use stoplosses? why not just real traders? what is it about the fx market that makes it so different to any other market and requires 'real' fx traders to ditch the one trading tool that every single sophisticated article written about trading has always implored traders to absolutely use?

maybe it's true that 'real' fx traders don't use stoplosses. real fx traders can keep losing all of their account if that's how they want to roll. real traders use stoplosses and don't let bad trades build on them and hit margin calls.

if you don't pull the plug on a trade then your broker will. it's up to you to decide who you want to be in control of your money.

oh, but you say what if i have enough money to maintain margin requirements and only open small trades? then i say "what a waste of time". holding onto losing trades for extended periods of time to scratch a few hundredths of a percent account profit is the biggest mental wank in history. if you have more money than is in some nations then you can afford to let losers run and even average into them and trade your way out of the positions into profit... but most people are everyday people with bills and debts and so on and are looking for profits and wanting to build their account. get real for a moment and wake-up!

threads like this are such rubbish and filled with losing traders seeing someone finally promote the most ill-regarded of trading concepts and feel justified to finally trade like the fools they are. there are some people out there that truly can afford to trade without stoplosses and get away with it, but i doubt most people on this forum are in such a financially comfortable position that they can game the market this way.
Congratulations ScalaFX for coming out of the closet!
  • #34
  • May 31, 2011 11:10am May 31, 2011 11:10am
All trades should have stops, even if it is only as a back up feature. So for example, if you usually exit using discretion when a trade goes roughly 20 pips against you, you should set a stop loss perhaps at 40 pips, this is only there as a backup, if you trade long enough you will have a power outage, internet loss, broker platform crash, etc. You will be glad about this stop some day.

Other things you can do are, eixit a trade only if price closes on a certian side of a level in the market. Could be you are buying at support, say your time frame for the trade was 4hr charts, if price closes below this level on the 4hr you exit. However you have to consider that price could potentially move 500 pips before closing. Again you need a backup, so put a wide stop on any way. The problem with this is that you still have to calculate risk and you will proabably need to lower your position size. But this could stop you getting whipsawed, as we all know the market likes to do this! I often see price spike through a level to flush out traders stops, you can avoid this.

The last thing i will say is that being stopped means nothing! how many times have you been stopped and seen the market reverse and go where you wanted in the beginning? Probably too many times. Threre is nothing to say that you should not have a second atempt at the trade.

For example- say you short eur/usd at 1.4550 and place your stop at 1.4610 and you get stopped. You can simply replace your order at 1.4550, with the same stop loss and if the market does fall you get back in, it may well still be a winner. But if the market continues to rise you might not be filled again and you will be no worse off. There is the potential to be whipsawed here and you have no guarantees that the second attempt will work either. But it is still somthing to consider, so long as you believe that the reasons to be short still stand.

Just my thoughts.
  • #35
  • May 31, 2011 12:43pm May 31, 2011 12:43pm
Quoting nubcake
yup....
yeah, I agree with your whole post. We should compare ourselves to the pit traders who traded for their account, not to traders of large institutions. I bet any successful pit trader out there knew at what point to cancel out the trade. If you always average in, that's just such a dumb way to destroy your account. But I guess every noob has to go through that, before they realize that trading without a stop loss is also not the grail.

But yes, that certain thread you talk about got so many worshippers now, cause they got in there a license to not use a stop loss. But if you trade alpha (for your own account), that is one of the dumbest things to do.
  • #36
  • May 31, 2011 1:02pm May 31, 2011 1:02pm
depends on the style i would say.

im a worshiper of that certain thread.
the best thing that ever happened to me. you really have to read and learn to understand.

it is wise to learn and adapt, i used stop losses before, didnt work for me.

i watch the price action and manage my risk exposure as we go. i dont set trades on opinions, i try to be strategic about them. scale in scale out as the price moves.
AVT INVENIAM VIAM AVT FACIAM
  • #37
  • May 31, 2011 1:10pm May 31, 2011 1:10pm
the whole theory about stops, is in case of being wrong it protects your account right?

but if you manage your trades from start to finish, and you manage your risk as you go. why the stop? if you learn to trade and observe price behavior and you are trading in the right direction.

taking an unecessary loss is not so good. now if you are trading in the wrong direction then sometimes is best to kill the position.

its about trading with you brain and flexibility, doing ongoing analysis, and not arguing with the market. combining correlation, and macro economics, fundamentals and technicals. strategic scaling in to maximize profit and minimize risk, and if out of step strategically averaging out of a bad position (while learning your limits, there is sometimes when the battles are lost and one must accept that) the whole point of that "stupid thread" is to build, flexible chart reading skills, mindset, not trade like a robot and not have trading systems. to ongoing market conditions one must have an flexible style, rooted in objective clear market analysis, and fundamental analysis, as well as a flexible Money management in place with risk parameters
and take responsibility for our own mistakes, if one loses money (that is not acceptable) one must learn from every trade, and always protect the book. use the market money as risk money, every scale in phi progressive position lets you forage risk capital.

i rather learn to trade than learn to gamble with less risk.
AVT INVENIAM VIAM AVT FACIAM
  • #38
  • May 31, 2011 1:18pm May 31, 2011 1:18pm
redlion, what happens if you lose internet, or power? do you have backup of some sort. Some day it might cost you a lot of money.

Even though you have the discipline to get out manually, its not much good if your have no broker platform?

May sound basic, but i think its worth thinking about if you havent already.

h2
  • #39
  • May 31, 2011 1:21pm May 31, 2011 1:21pm
Quoting the redlion
the whole theory about stops, is in case of being wrong it protects your account right?

but if you manage your trades from start to finish, and you manage your risk as you go. why the stop? if you learn to trade and observe price behavior and you are trading in the right direction.

taking an unecessary loss is...
Well, if your analysis is wrong and market goes against you and you kill your position, that means that you are employing a stop loss. Not a conventional one, but you are employing one nonetheless.
  • #40
  • May 31, 2011 1:30pm May 31, 2011 1:30pm
correct. FTI never said dont use stops average till you get out (that is foolish)

if you read the thread, it teaches you how to fight your way out of bad positions, but always protecting the book, the stop loss is mental, the objective is to never lose a trade,

by correctly assessing market form, and conditions, overall fundamental and technical.

it also teaches you about the sitting duck levels how brokers sweep for stop zones, so a stop loss (physical) is detrimental, there are ways to bring the book back to break even, if badly timed. if wrong direction another asessment has to be done weighing the pros and cons of the Modus Operandi.

if i lose power, i have my phone
if i lose both im confident, i can rescue my position. i dont trade in a way to over extended my self i trade in a phi to pi ratio as to always have capital for rescues ( and if the power indeed goes out i should be trading in the right direction)

some people trade, daily some hourly, i trade the 5 minute positioning myself for the daily movement.im sure the market will give me options.

and if it doesnt, black swan event what have you, then kill the position and move on (remember the phi to pi, i am not over leveraging)
AVT INVENIAM VIAM AVT FACIAM
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