Real Fx traders do not use stoploss

didn't you hear? price always comes back

oh i should shush now before dopey has a cranky.

haha, exactly! What an efficient use of capital to stay in a losing position!

custos, i always thought of you as quant trader, very smart and our views are sometimes similar. so i do want you to open your mind to somethings that might be beneficial to you.

there are many types of styles of trading.
for example, most traders, look at their charts, news, so forth, what have you. what ever you method is to help you decide direction of the currency.
then you place an order, you put a stop loss at a reasonable level hopefully away from volatility and if you are right. you take profit if you are wrong you dont lose to much capital. that is why you have stop loss order to protect you from the market moving against you 100 pips or so. correct?

now, what FTI teaches is not, to hold on to your loses and pray theyll turn around and keep averaging until hopefully they do. (i think this is the impression that you have) in fact fti teaches you NEVER TO HOPE OR GAMBLE.

his style is more of a professional style of trading.

you follow the market and what is happening in the NOW, with objective ongoing analysis, scaling in and out as the market moves. if the price goes your way you scale in in fibo as the price retraces, you scale out and take profit then await the next wave, or according to market conditions you could pyramid your way to ride the daily.
it is all flexible but is risk managing in the now. if a trade moves against you.

we are not hoping for the market to come back, we can calculate the pips against us, and average in on a skew that is both flexible and sustainable should the rescue operation fail. it is not to set and forget, never to set and forget, DANCE WITH THE MARKET.

the market may NEVER COME BACK correct, but THE MARKET ALWAYS RETRACES, ALWAYS. at some point it will retrace, the key is to use the reasorces and make calculation in a way, as to catch the retrace in good timing as to hit the average price and get out quickly at break even.


example, with 1 1 2 3 5 8 13.... for each lot in progression, as the market moves in your favor you continue to scale in. PRESSING the attack, meaning if you are right you need to maximize profit, and for every scale in it takes 50% retrace to wipe out the current profit, if loss of momentum, or market retraces and your profits are in danger you scale back and keep 1 lot in. or liquidate the positions.

IT ALL DEPENDS ON MARKET FORM. with every tick the market changes, so we constantly assess market condition. by scaling in such a way if you are initially wrong it does not hurt the book so much, 100 pips against a lot is less painful than 100 pips against 13 lots correct?

now on averaging to get out, the rescue skew, everyone does it differently according to market conditions but example. 100 pips against your position with a pi rescue skew of 3.14, current lots x 3.14= 31.8% retrace. 100 pips against you to b/e it would take 31.8 pip retrace to break even, but if you feel the trend is strong you could skip a sequence and 15.4 pips would be needed to retrace to b/e.

DO YOU UNDERSTAND NOW? if you are down a lot of money, it is worth while to try to rescue the position, to come up with minimal damage. and if the market continues to go against you, it is better to get out. maybe the mindset or the analysis was not right.

see, in forex THERE IS NO REASON TO LOSE MONEY. IF I LOSE MONEY
ITS BECAUSE OF THESE REASONS

1 my analysis was wrong
2 i failed to see the changing market conditions
3 my mindset was wrong (fear , greed, revenge etc)
4 i over leveraged so i had no options to rescue

fti teaches how THE PROS do it, that is why the post is so long, it goes over mindset, learning market structure, market form, flexible money management etc.

you should really read it and understand it custos, it is beneficial, do not discount something with out really understanding it. that is ego, ego is bad.


the reason why stop losses are not needed is because we do not guess and set a trade, we MANAGE the position as the market changes, price can never be predicted

Well, I like the pyramiding approach, but am still concerned about the no stop loss and averaging in to not lose strategy
I am not sure if professionals really trade that way. If I look at richard dennis's donchian channel strat, paul tudor jones documentary, victor sperandeo's books,... who are all proven great traders, nobody ever talks about averaging in. Also I recently read a diary of a professional trader, who has one loss after the other, but in the end gets a 60% return a year. Sperandeo himself advocates only looking for great opportunities and employing stoplosses in case of being wrong. Paul tudor jones advocates always only looking at the risk at place, never at the return, always cutting losses. Sorry, but I am not convinced that fti is up in these ranks. I rather take advice from people who I know made it in this business, than rely on somebody on a forum of whom I don't know anything, and more importantly, I don't know if he is telling the truth.
But anyways, maybe there are some pros who average in. I personally just think, if I do my analysis right and have all odds in my favor, then why should I average in, if the market doesn't go my way? Why not just accept the loss, look for another opportunity, do my analysis all over again and get it all back. For me having an edge is about proper risk:reward and win:loss.
Maybe I am wrong here, but I think averaging in is just trying to fulfill the need of a human to always be right. But in the markets you CAN'T always be right.
Thirdly, on a pure technical basis, I could not get one system to work without a stop loss, maybe I am too dumb a programmer, or maybe I need to consider fundamentals as well with a no stop loss strat. But if I use technicals alone, there will be a black swan event at one point in time where all my account equity evaporates on one wrong call with constant averaging in without being able to get out at b/e.

Anyways, for me stop losses are essential for being ahead of the game.

i understand were you are coming from, and believe me, that is the approach, and mindset to have.

as the art of war says, "fight only when the enemy is already been defeated"
it is using our brains, at all times, and chosing the best posible entrances, in the direction of price, well timed according to multi time frame analysis
see nubcake and you think the average in is the ONLY strategy taught.

i mean, it depends on circumstances,
if my initial position is against the direction and im completely wrong, why? go average more money risking a bigger loss?
kill the small position and re analyse, correct?

however if i am already have a considerable position at risk, and i am able to time the retracement well why take an unecessary loss?

now, in forex there is stop hunting, we could get in to this subject if you want. but to me a physical stop is a bad idea.
for black swan events, i am confident i can rescue the position, on a retrace.

i dont think see how this style can be coded on an ea, it requires constant ongoing analysis and recognizing changes as they happen

why do you humor him? you have not misunderstood anything. what redlion and the rest of them don't understand (and fti himself keeps harping on about this, but they don't listen!) is that you need virtually infinite capital for when you stuff things up so that you can forever average your way out of positions.

they aggressively average into a losing position with larger and larger positions to 'rescue' it to not take the loss. redlion did his little spiel explaining this already.

now one of fti's followers has just had some form of failure or blowup... yet they keep the faith. capital capital capital is the answer, but they just don't get it. it's the same as any martingale method. they work great until they hit that one losing streak that nukes the account. it's all just different ways to play the same negative edge for an extended winning period with one final blowup.

the only way to TRY and manage risk with fti's method is to trade as small as is possible, but if you get on the wrong side of the market and it doesn't retrace the way you expect and need it to and goes for a runner then your account goes bye-bye as you try to average-out of the bad position. this is where luck comes into it... if you are lucky enough you might avoid a black swan or two, or happen to not trade when the markets are behaving differently to what is expected, and so you survive awhile longer.

you know that traders use stoplosses and you have shown perfect examples. they don't work at a bank with virtually infinite capital. they live in the real world where they have to be smart about their risk and manage it professionally.

fti himself warns them that they need capital, but they don't listen. so in the meantime they walk the no-stoploss tightrope and have success after success for long enough that they believe in it and then when they finally get punished they blame it on psychology instead of realizing the method is guaranteed to eventually fail.

they are playing games with their own mind and ignoring reality.

yeah, I am just more comfortable with a stop loss. Personally "stop hunting" as you call it, rarely bothers me. I see that more as the big guys accumulating/distributing their positions over a couple of days. It is unintentional stop hunting, in my eyes. They just need liquidity to get into their huge positions. You just have to get in after all these adjustments take place and price takes off. Easier said than done, but it's doable. Well, I still rather take the "unnecessary" loss. Cause, if I have done my analysis, I want to be in my position with big money, not small peanuts. I rather take the loss on big money. The next few trades will for sure compensate that one loss.

i see what you're saying, to each his own.

at the end what matters is positive equity growth, and being able to understand our limits, our threshold of pain. and understanding our methods.

the strategies that will yield the best result is the once we come up with ourselves.

i personally, combine all my knowledge, and i trade according to what the market shows me at that time.

im just a beginner in this game, so i will continue to learn. the last thing i want to do is close my ears to wise words.

so learn all i can from everyone that is willing to teach. and implement that, which works best for me.

i do like discussions like these one where we can have a trade of ideas. so i thank you both.

yeah, as I said, I am personally all for using stop losses. As long as my money doesn't get traded without at stop loss, I am fine with other people not employing one. Also, without disrespecting redlion, but he is just 5 months or so in this game. In the first 5 months I also didn't use a stop loss thinking I can beat the market.
Either he will totally figure the market out and know how to trade it without a stop loss, or he will blow up eventually and use a stop loss for his next account. It's a maturing process, in my point of view.

yeah, good discussion!

by the way, you touched my ego a little bit.

i might be in it 5 months, but

1- i have doubled my account
2- i have a clear understanding of what is going on in front of me in the chart
3- i achieve consistent profits
4- i do not feel like i'm guessing
5- with my methods of observation and style of trading, i have helped some more experienced traders (for free of course, i believe in helping others) have more consistent profits

so i think i'm in the right path,

i just have to keep my ego in check, being a very bright guy, i do not want to get cute with the market because it will chew me up and spit me out, in no time. all i can do is analyse and follow price, and always trade with the least amount of risk possible (not only by not over leveraging, but by timing my entrances and actively managing, combining fundamental and technical analysis together)

as i always say fundamentals get you a feel for direction, technicals help you capitalize on timing.
direction + timing = profit

the biggest problem with this is that it can take awhile for them to get their margin call and in the meantime have to hear how great they are at not losing.... when they aren't using stoplosses

well, one of them got their margin call i suspect. i bet s/he still doesn't learn the lesson though.

seriously, how many people double or triple an account using no stoplosses? probably most. how many blowup? all except one or two who have the money to back up their dangerous game.

what a joke.

just something for people to sit and think on...

i don't know the specifics but it is my little-man nobody understanding that banks don't have unlimited funds. relatively speaking, though, the funds available to banks versus the funds available to everyone else is virtually unlimited.

let's assume that someone does in fact have unlimited capital to use in the markets. at no point can their funds be depleted. not ever.

why would someone like this ever bother to analyze the markets and formulate ideas and concepts to base trading decisions on? if they can always cut a loser and then double-up until they finally gain more than they have lost, or they can continue to average-in until they are above breakeven into profit, then why would they bother TRYING to be right in the markets? being wrong doesn't matter because their is no monetary risk, right?

well, yes. that is right. they have no true risk of losing money when they can always up their ante until they overcome previous losses. they can just keep rolling the dice or spinning that wheel over and over until they are in profit.

so why would someone with no monetary risk EVER bother trying to be right? why wouldn't they just flip a coin and enter, or just always enter one direction and play one side a market. the answer is simple. because the risk in this case is NOT money, it is TIME! for all of the time being wrong but having no money at risk is TIME lost being not being in profit. nobody under any circumstances has unlimited TIME to spend in the markets.

time is the risk when you have unlimited capital! maybe this will give some people a bit of perspective and answer an unanswered question... or maybe not.

learn to trade nubcake.

stop arguing and learn to trade. dont argue with the market, dont be so rigid.

open your mind. i listen to you, i will consider whether stop losses might in fact be beneficial and maybe conclude that a "catastrophic stop" might be a good idea or might not. maybe revise my risk parameters, or be more conservative on rescues? a lot to ponder, thanks to you and custos.

i feel you always want to be right, we are not in a debate team in high school.

are you profitable consistently?
do you have a sound strategy?
sound resolve to implement it?
are you implementing money management strategy?
are you watching the markets?

or just trolling the forums? you wont find the way here nubcake, you need to sit in front of your chart and strategize.

fti might not be your cup of tea (obviously) but have you taken the time to LEARN the things THAT MIGHT HELP you develop as a trader better?
have you FILTERED OUT the things you dont believe is beneficial to you?

ill give you an example.
I Dont like Jet traders style of wanting to be validated in being right. but i have been playing with his ideas and i like his theory of ATR for measuring capacity of the market. i believe objective measuring of possibility of range, might be something to keep in mind.
i was already implementing ATR in ways to measure, not only skews needed, but daily market capacity to a certain extent, i will continue to develop this idea, if its garbage ill throw it out.
cloggie is an ass, but he is very knowledgable ive been listening to his rants, and quietly learning from him. all traders here have a strategy, arguing without learning just shows STUPIDITY

i advise you to open your ears, and open your eyes, dont just open your mouth, (key board) we are all here to share ideas, not to be right.

long post so read at your own risk of time wasted...



sorry, quoting fti's mantra's means nothing to me, or anyone.

you could consider as chicky mentioned that the margin call be your stoploss if stoplosses 'offend' you so much, however, in that case your account would truly only hold a fraction of your true trading capital. but this would restrict your ability to continually hit the market with bigger and bigger lot sizes as required by your scaling in and out methodology. you would no-longer be trading fti's methods and would actually be shifting to a new perspective and trading strategy. you would be outcast if you did this and let your 'friends' know this, and fti himself would surely banish you. so, if you want to stay in his good books then i would suggest you keep risking your whole account as you currently do. risk versus reward... risk your account for perceived friendship, that is.

it's not about wanting to be right. it's about being right, and if not being right being shown or proven wrong. prove me wrong and i'll eat humble pie, but proof is not simply quoting fti's mantra's and dogma. proof is providing something substantial, sound, and makes perfect sense. you have absolutely not provided anything that i find to be proof of anything except your devotion to a certain perspective which is likely to be the end of your capital some day in the future.

i advertise quite openly that i'm not. but you can't equate your inability to take a loss as being successful. myself, and anyone who tries, can have quite a long string of successful and profitable trades when not using a stoploss and 'trading their way out of losers'. it is the most dangerous way to trade, both financially and mentally.

you don't realize that you are gaming your own mind, and every time that you don't take a loss and instead trade out of it is just one more pat on the back proving to yourself that you are doing the right thing... and some day when you are proudest of all of your achievements and being an elite professional trader you will bury your account by not taking a loss.
of course not, else i would be wildly profitable. the thing is, and you do not realize this, is that YOU do NOT have a sound strategy at ALL! you are playing with fire.
irrelevant until i have an edge, and your 'resolve' is irrelevant until you have an edge as well. in the meantime... playing with fire.
yes, the thing is that you ARE NOT
the time i spend here is when i'm taking a break from other things, including charts.

you wish i was trolling. then you could dismiss reason. this is precisely why i'm banned from the thread, along with some other members. have you noticed that any criticism is pushed aside? have you noticed that there is no discussion or debate, it is all just one man's dogma? have you noticed that no one dares speak out of tune and follows along with whatever the leader speaks about, and everything else is prohibited? if you go back and read through all of my posts including those put in the rubbish bin you would come to the conclusion that at no point did i 'invade' or 'troll' fti's thread, and you would see that i made observations on the nature of the members there and tried to give perspective on some things and explain some 'outsider' members perspective to those who live in that thread. and, of course, i made note that the forums rules are being broken at certain points... of course all of this is considered thread bashing by those drinking the koolaid.

in fact you yourself posted how unbecoming it was of the members in that thread to behave the way they did for page after page of putrid nonsense. it just shows how full of rubbish they are and all of their elitist posturing is simply lies, that is, lies to themselves. it was them breaking simple rules and it was so beautifully revealing of the TRUE character of those there, and you witnessed it with your own eyes and i'm glad FOR you that you did and had more sense of self and dignity to be the beacon of reason amongst their pure idiocy. there IS hope for you yet.

seriously, go read my post history if you care to. the willingness of members to jump off of a bridge at the command of their leader is quite sad, and idly amusing, and a fascinating example of certain human nature. it seems no one can have an opinion of their own. we are all sheep to the shepherd (or wolf)?

is this a real question? you can't be this naive.

and did you notice how as soon as you brought-up the subject of how you use ATR to frame your perception of the market you were immediately shut-down??? don't you realize you are NOT allowed to speak in concrete terms in that thread? it all has to be ambiguous and therefore unable to be debated. have you noticed how virtually no one makes any real talk about how they actually trade? do you think that maybe it is an unspoken rule that you simply don't speak out of turn if you want to remain friends with the trading-god and continue to receive his blessings? food for thought.

as for jettrader and anyone else who stands by what they say, this is another thing many people have issues with. there is too much pussy-footing around by most people in life. as soon as someone says it like it is they are shunned. notice how anytime someone in the past has asked in your favorite thread a direct question they get shunned (being too 'rigid' is the classic mantra spewed by default, and you now adopt this mantra yourself). it's quite classic how a lot of what is 'taught' in that thread is very mystical or ambiguous. if you don't define something you can't point out it's flaws. your 'boss' has his framework for working the markets and what he 'shares' is often drowned in ambiguity so that it is so undefined that it can't be debated, and some aspect he keeps entirely to himself and doesn't even bother to share (not that he has to. just saying). more food for thought.

i keep my ears as open as i can. i like watching the nature of humans, and i keep an ear out for anything that sparks new ideas in my head.

don't dismiss directness for trolling or you will surely miss many a good point. i don't mean just myself.

as for my posts, i would suggest to you that you put me on ignore as your 'buddies' have done. i surely won't be helping you in your current quest for financial suicide and will only create confusion in your self-prescribed dogma. if it entertains me enough i have all the time in the world to refute whatever nonsense i read and this is without a doubt completely hazardous to your current trading.

you see things your way. you have done whatever reading and research you have done. it's your journey, and for all that i have said you may very-well have knowledge that i do not. make of it what you will. that is how life goes.

long post.

no, no reason for ignoring. and yes im still in my quest, so your opinions and point of view will be taken into account.

i just believe you dont understand, and you dismiss it.

but ill tell you something nubcake, when i feel comfortable guiding you out of a mess personally, i will P.M you and i will teach you all i know.

you might find, its not so bad
rigidity does indeed kill, everything needs to be done in context of what the market is doing at the time. i will assure you my account is safe. i am not in it to lose my capital and rest assured that i wont

Hi Redlion,
I am home alone tonight and have nothing better to do than scan FF. Says a lot about my social life! Oh well, my kids are out having fun and my wife is flying home from Germany tonight, so I have been enjoying your posts here and in other threads.

I know fti's position on stops, and he makes some very good points. I am too cowardly to trade without stops, however. I will add just this point for you to consider. In my trading group, I know that six traders have accounts with several million dollars available to trade. Three use stops, three do not. They all make a lot of money, but they have very different trading styles. They are very smart traders and share a lot of information among themselves, which I guess helps the three without stops recover their losing positons. By the way, they are followers of fti's thread (they do not participate but were reading it while he was writing it several years ago) and they all believe that he is the real deal.

Have a good weekend.

yeah me too. i believe he is, before i read his thread i was doing calculated gambles, with risk rewards and stop losses, set and forget type of trades.

i won some, i lost some (mostly lost some) my stop was always getting hit before price took off, and sometimes i was glad i had a stop loss as my position would have been screwed.

when i had the chance to REALLY learn fti's methodology, i began to UNDERSTAND price, and began to observe and go along for the ride.

i owe him all my success and any other future success to fti

Redlion, I suggest you stop wasting your time with my IDOL nubcake...it's like teaching a monkey how to use a wrench...but I think you will have a better luck with the monkey pulling if off but anyways, I respect nubcake and his honesty for not being profitable but vastly knowlegable though...maybe he knows how to time travel too My main point is listen to what nubcake says and EXACTLY do the OPPOSITE. Heck! he is not making money with all the stuff he knows, so technically if we do the opposite of it then surely we can make money... Learn from the mistakes of others...

(i hear a comeback brewing from afarrr...........................)

that's such a newbie mindset: Reversing what doesn't work, then it has to work.
If a strategy is a losing strategy, it is very likely that by reversing it, that it still will be a losing strategy. Random calls reversed stay random calls.