Help for a newbie - should I use stops? | Forex Factory

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Help for a newbie - should I use stops?

  • #1
  • First Post: Jul 20, 2011 5:23pm Jul 20, 2011 5:23pm
Hey everybody,
I've been trading and learning for about a year and I've developed my own system with PA, Fib levels and MAs. Now I've been trading live for about a month with minimal gains 4% up so far, but my dad and his friend swear that trading off PA, indicators all that stuff is BS and that currencies move like a sine curve and all you have to do is have enough money in the account and don't use a stop loss and just leave the positions open.
I disagree but they swear its the best way. So id just like to ask any one out there if my results are good for a newbie and give any evidence that my dad and his friend are wrong.

Thanks in advance
  • #2
  • Jul 20, 2011 6:39pm Jul 20, 2011 6:39pm
Definately use a stop! Its insurance to protect the rest of your capital. If you are going to be trading with the trend, move to break even when you can. If it does hit your stop, wait for your entry and get back on the pip train and keep riding! In the blink of an eye, things could change. You never know what the market is going to do. Do I think your results so far are good, being a newbie? Sure, gotta start some where, as long as you are making money and your capital is growing.
Damn The Torpedoes, Full Speed Ahead!
  • #3
  • Jul 20, 2011 7:32pm Jul 20, 2011 7:32pm
I agree with dizzle. Of course the longer you hold onto a trade, there will likely be a larger pull back. Your trade needs to be able to handle that, so of course don't set it too close to your entry price, but allow for fair drawback.

The longer you hold onto to a trade the more likely it is that something crazy can happen in the market, if you want longevity you can't allow any major market move to blindside you.

Winning big many times is great, but you only need to lose big once to lose it all.
  • #4
  • Jul 20, 2011 9:22pm Jul 20, 2011 9:22pm
Quoting Matt795
Hey everybody,
I've been trading and learning for about a year and I've developed my own system with PA, Fib levels and MAs. Now I've been trading live for about a month with minimal gains 4% up so far, but my dad and his friend swear that trading off PA, indicators all that stuff is BS and that currencies move like a sine curve and all you have to do is have enough money in the account and don't use a stop loss and just leave the positions open.
I disagree but they swear its the best way. So id just like to ask any one out there if my results...
Inserted Video
  • #5
  • Jul 20, 2011 9:29pm Jul 20, 2011 9:29pm
Quoting newyear498
http://www.youtube.com/watch?v=OVytw0DlkfE
Awesome! Just remember, it could have all been avoided if he would have set a stop loss! haha!
Damn The Torpedoes, Full Speed Ahead!
  • #6
  • Jul 20, 2011 11:50pm Jul 20, 2011 11:50pm
Quoting newyear498
http://www.youtube.com/watch?v=OVytw0DlkfE


Thanks for the replies
  • #7
  • Jul 21, 2011 10:36am Jul 21, 2011 10:36am
Your father is correct based on your description. For now, being new, use a stop every time. By basing your method on limiting risk you will be in a position to produce limitless rewards.
  • #8
  • Jul 21, 2011 10:54am Jul 21, 2011 10:54am
Quoting Matt795
Hey everybody,
I've been trading and learning for about a year and I've developed my own system with PA, Fib levels and MAs. Now I've been trading live for about a month with minimal gains 4% up so far, but my dad and his friend swear that trading off PA, indicators all that stuff is BS and that currencies move like a sine curve and all you have to do is have enough money in the account and don't use a stop loss and just leave the positions open.
I disagree but they swear its the best way. So id just like to ask any one out there if my results...
and how does your father know where price is going? Meaning how does he decide if he wants to be long or short? If I look at the weekly or monthly euro chart, I can't see how that could be anything close to a sine curve. The charts are not governed by science but by people thus rendering this sine curve idea useless in my opinion.

However, I agree with your father that indicators are useless.
  • #9
  • Jul 21, 2011 6:59pm Jul 21, 2011 6:59pm
Quoting Custos
and how does your father know where price is going? Meaning how does he decide if he wants to be long or short? If I look at the weekly or monthly euro chart, I can't see how that could be anything close to a sine curve. The charts are not governed by science but by people thus rendering this sine curve idea useless in my opinion.

However, I agree with your father that indicators are useless.
I definately agree with the indicators part but these are his exact words "Buy when it looks like its going up and sell when it looks like its going down" there is no other justification for entering or exiting a trade, the only sure exit i think is a margin call
  • #10
  • Jul 21, 2011 7:44pm Jul 21, 2011 7:44pm
Quoting Matt795
Hey everybody,
I've been trading and learning for about a year and I've developed my own system with PA, Fib levels and MAs. Now I've been trading live for about a month with minimal gains 4% up so far, but my dad and his friend swear that trading off PA, indicators all that stuff is BS and that currencies move like a sine curve and all you have to do is have enough money in the account and don't use a stop loss and just leave the positions open.
I disagree but they swear its the best way. So id just like to ask any one out there if my results...
No one is wrong, no one is right. There is no best way. There is only the best unique way for you. what seem best for you does not mean the best for your dad and his friend.

Result is the only thing that matters.

Having a stop will give you a system, a framework to work on. Something which lets you sleep at night while managing your RISK.

Personally i think your on the right track if you take trading seriously, use a stop, treat it like a business.

what your dad is doing is playing the probability of the market returning to X level and hitting TP all the time but risk having the account being wiped off.

Both are working strategies, both require different level of screen time, stress tolerance, and money management.

Do what you think works, and keep practicing what works.
  • #11
  • Jul 22, 2011 1:07am Jul 22, 2011 1:07am
Quoting Matt795
I definately agree with the indicators part but these are his exact words "Buy when it looks like its going up and sell when it looks like its going down" there is no other justification for entering or exiting a trade, the only sure exit i think is a margin call
haha, bad exit strategy
  • #12
  • Jul 22, 2011 6:11am Jul 22, 2011 6:11am
Quoting newyear498
http://www.youtube.com/watch?v=OVytw0DlkfE
That is disturbingly funny.
  • #13
  • Jul 22, 2011 5:41pm Jul 22, 2011 5:41pm
As I have come to accept there is always a way to make money trading Forex and so I've altered the idea of my dad and his friend and I've posted in the trading systems part of FF.

Here's the link
http://www.forexfactory.com/showthread.php?t=305501
  • #14
  • Jul 27, 2011 10:48am Jul 27, 2011 10:48am
Quoting Matt795
Hey everybody,
I've been trading and learning for about a year and I've developed my own system with PA, Fib levels and MAs. Now I've been trading live for about a month with minimal gains 4% up so far, but my dad and his friend swear that trading off PA, indicators all that stuff is BS and that currencies move like a sine curve and all you have to do is have enough money in the account and don't use a stop loss and just leave the positions open.
I disagree but they swear its the best way. So id just like to ask any one out there if my results...

Blindly not having stoploss is very dangerous but if you are aware of the daily volatility range and you know you are not terribly wrong in terms of market direction. It is ok not to have stoploss.


Most of long term trader does not use stoploss but they have their planned stop level when market did not go as they expected.
  • #15
  • Jul 31, 2011 3:32am Jul 31, 2011 3:32am
thanks for the advice. I think for now I am going to work with stops so that I have a framework to work off of.
  • #16
  • Jul 31, 2011 10:09am Jul 31, 2011 10:09am
Quoting Matt795
As I have come to accept there is always a way to make money trading Forex and so I've altered the idea of my dad and his friend and I've posted in the trading systems part of FF.

Here's the link
http://www.forexfactory.com/showthread.php?t=305501

Trading without stop losses is as most would agree......pretty dangerous and a hell of a gamble.It's something most traders learn the hard way quite early on in trading,myself included.

If you've earned 4% so far this month then you are doing quite well.Based on a $10k account you'd be some £400 in profit by now.
FXsniper Pips This Month: -997
  • #17
  • Jul 31, 2011 12:22pm Jul 31, 2011 12:22pm
For a new person on FX a stop is a must, I think, especially if you trade intraday. Even if you are counting on а some drawdown of your position it would be better to limit the risks before opening a deal.
  • #18
  • Edited 6:24pm Aug 2, 2011 4:48pm | Edited 6:24pm
Hi guys

A newbie here on the forum but trading coming up to 4 years but always looking to learn, share and improve. In my opinion, failing to use stops is a criminal offence. The human psyche works in strange ways. The novice trader lets losing trades run by failing to use a stop loss or by moving the stop loss as price edges closer. The idea being that our hopes are pinned on the markets reversing any time soon in our favour. We also get out too early from our winning trades as soon as we have made a profit in the fear of losing it. A decent book like Trading in the zone will of course and rightly so teach you the opposite. Get out early from our losing trades and let your winning trades run. Putting this into practice takes time but a mechanical approach with the right psychology is essential to being a successful trader.

Could I ask how you calculate where your stop loss will be and how much of your equity do you risk on a trade?

ps Like you I totally disagree with you dad!!
Trading is simple but not easy!
  • #19
  • Aug 3, 2011 9:51am Aug 3, 2011 9:51am
Personally, I don't think you should use stops. That is why I use Binaries on Nadex to trade with.

www.nadex.com
Binary Options Trader
  • #20
  • Last Post: Aug 3, 2011 1:48pm Aug 3, 2011 1:48pm
Quoting TrendSurferZ

Could I ask how you calculate where your stop loss will be and how much of your equity do you risk on a trade?

ps Like you I totally disagree with you dad!!
I calculate my stops based on a percentage of account 1-2% and then based on the pip cost I calculate how far in terms of pips in acceptable then I take that level and with other analysis see whether that level is appropriate.
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