Real Fx traders do not use stoploss

Imagine having a $50k account, and every time you traded a microlot it would move the market noticeably. Well, this is how it is for the real market players except they, of course, have much bigger accounts. Losing a million is nothing to them. Imagine that only 10% of the FX population could possibly move against you whenever you decided to take a position. Imagine that you have to take more measure to conceal the ripples made when you actually do enter the market then you do ever having to worry about your account being blown.

The FX is still the wild west, and the only people making money are Jesse James and his gang. You are either one of the people getting stolen from or doing the steeling, or are on the same side as those steeling. You can equate setting a stop to broadcasting that you are sending money down the tracks to the gang to be stolen.

The only constants in FX for the movers are that there is a heap of fear, anger, greed, anxiety, ego, and worry in the market. Those are all exploits that those that win look for. Setting stops are perhaps the most easily exploitable example of these. Which is why price turns around just after a stop is hit. It's not just your stop that was hit, it's the other thousands of traders that set a stop there too. Averaging down makes a lot of sense if you are smart enough to determine market direction.

Let's not forget that if you have very little exposure or risk, then it would take an economy totaling failing before your account was ever blown up.

If you want to get ahead in this game, you've got to start thinking against the grain 90% in the other direction. Consider everything.

Chris

Well in FX you'd have to dream quite a bit bigger... as recent intervention by the BOJ on October 31 was estimated at $65 Billion and as you can see it was mostly temporary.

To move the market you'd have to be playing in the interbank market... playing in the spot OTC market and trying to move the market against a broker or others is quite laughable. Although they would gladly take your money, your arms and legs and then beat you with them for being so stupid.

A million dollars ain't gonna do a thing in a $4+ trillion a day market.

Yes, precisely my point. They move the market against the status quo, yet it is in most instances temporary, like BoJ.

Interbank, BoJ, dealers, hedge funds, private billionaires, columbian drug cartels, etc all have the power to move the market against all the rest, and they do daily. So your best bet is to have enough capital to cover the market moving in any record direction without using a stop, or use stop that is well beyond a few major retraces.

Chris

hi,

sorry but you wrote so much BS in this post, last BOJ fx intervention on the market was in 10 yards usd - it moved the market 4 figures, that means that you need 500 mio usd to move usdjpy 20 pips, ofc depends on liquidity, usdjpy is second most liquid market try to imagine with eurusd, you would need maybe 2 times more, so now tell me what hedge-fund is going to move the market? its not only about moving the market in your direction, even if you moved it 20-30 pips you need to close your position its much harder(you dont get oanda spread for 500 mio )...its true that it happens but its not in the way you think, and only with top tier banks(on majors)

This is my take on stop loss. Trading is a game. As a player in this game, you are bound without exception that you will have lossing trades. Placing a stop loss will remind you that you're not invincible and that you have to take the losses as part of the game. However, SL should be positioned based on your trading system, not on fixed dollar amount or fixed pips.

you don't need a fixed stop if you meet all the below criteria:
1. experienced
2. disciplined
3. can mentally adjust to current market conditions
Most people cant fathom closing out a losing trade with their own hand, thus rely on an always-in-market stop. Market going against you fast? good, cut the loss and get in on the other side per your plan. there are some creative ways to make money on both sides of this via scaling-in (i.e. predefined risk), and should be easy to figure out.
You *dont* need an active set-and-forget stoploss if your actively in the markets. However, it is beneficial to know ahead-of-time areas of interest for where you'd like to cut it if things get out of hand.

Of course you are assuming people want to stare at charts all day, what a waste of time, I have better things to waste my time on so learning the levels to put takeprofit and stoploss was essential for me.

It only takes me 20-40 minutes chart time a day to work out what to trade, I know many priceaction traders that do the same. Life is too short.

Each to their own I guess.

Didn't assume anything about people's 'wants.' Simply stated that it can be done if actively in front of the screen. Trying to answer some questions in the thread.

well it depends on your trading method. But in my experience its ideal to place a stoploss. Sometimes youre just not disciplined enough to take the lost and continue to adjust the SL for even greater damage. Possibly an unexpected "intervention" or breaking news spikes unfavourably for your trade and then youre down hundreds of pips.

Most traders want to get in at the best price for their trade so it'll reduce the need for a wider SL. Follow your trading setup and if trade hits your SL then theres something wrong with the analysis instead in my opinion.

Humility is 100% right!!! Got same strategy and trippled my account since june 2011.

Makes me humble just thinking about it.

I set a stop just in case there is an EMP from sun spots or the computer dies.
I set a stop and my cursor is on the 'close' button just in case momentum turns hyperspeed against my position.

Does it matter that pro fx traders set SL or not. There is no evidence of that and from whom did you hear. Who are these pro FX traders.

Bottom line: SL or no SL, are you making money consistently?

Sorry for bumping this thread up. After a couple years of agony and turmoil, I personally no longer use a stop loss anymore. Three things literally transformed my trading: switching to an ECN/STP broker, trading without stop losses, and a third which is confidential. Nor do I use any indicators anymore, other than price. I perfected my 5 min scalping to a point of having no losing trades. I can trade almost every candle so I do a 200+ trades a day, usually more. This approach actually came after working at a stock prop shop where we only scalped. Riding a trade out is certainly a smart thing, but it simply does not interest me due to my love of scalping. The stop loss situation is similar; it really cannot be debated as good or bad simply because so many other variables are at play, such as the broker type, the trader's experience, the methods, the trader's preference, etc. What is good for me may not be good for someone else. Once a week a trade might go against me 100 pips or more. Mostly me being sloppy (due to the sheer ease/boredom which I now experience). But since I trade on the 5 min charts and only scalp 1 pip, panic never enters my brain. Things can be put into perspective by glancing up at the 1hr or 4hr chart, which makes me smile again knowing how far out a trade ISN'T actually going against me. During those occasions, I simply wait it out. In fact, I usually keep trading on other pairs although I ease up a bit. But for those who like to trade without a stop loss, the following tips are important. 1) Chose your broker carefully; no dealing desks working against you. 2) Withdraw your profits frequently; I do it weekly and only keep my initial deposit in my trading account. 3) Trade the lower timeframes; price will correct itself soon enough. 4) Subscribe to RANSquawk or some other service for fundy news via audio stream; I don't trade during big news. Margin calls? Sure, but hasn't happened yet to me. Money management is still vital. You still have to know what you are doing. Market goes crazy and moves 2,000+ points against me? Sure, it could happen. But unlikely. I can still manually close the trade. But in reality, I don't care. I take my profits each week so if God forbid I lost my initial deposit, well I am still way ahead of the game. The irony of my situation is that it goes against almost everything I initially learned when getting into Forex. I trade without S/Ls, I don't ride out positive trades, I don't use indicators or any sort of analysis other than the previous candlestick, and I don't even trade with the trend. It's simply my approach which I would and would not recommend to others. lol. Little did I realize how many doors it opened up for me, perhaps by eliminating that psychological barrier. I must say though, the number 1 factor to my success was actually switching to a non-dealing desk broker (fxcc.com). There is no way I could scalp the 5 mins if a broker was breathing down my neck.

I approve completely that if you want to be successful in forex you have to remove the stop loss from your vocabulary unless they serve to take profits.

Off course, you have to be open minded to do that but not only. You also need to go slow with your leverage to avoid the fatal margin call. You see it ?

Use small lots according to your balance, be aware if the price is at a historical low or high and then wait, for your order to be profitable and take profits out of the table, that's it.

I hate being elusive. Without going into too many details, I will post a couple screenshots soon of my scalping method. Works great. Hopefully tonight I will post them.

Q. Why is it recomended that the average trader uses a stop loss?
A. Because the average trader must lose.

Hi,there. Is it suitable for newbies. I am new on Forex. And I've had a lot of looses. So I began to use stop lost. Could you suggest any right variant to save money for newbies and how to use it better. TY Happy trading.

i want to set a stop loss, but can not decide where to put it.


http://i45.tinypic.com/5jtht1.gif

do not use a stop loss, and your account is on its way down the FX drain. Advise, do the 1 % rule. If your account is too small, do micro lot (1 micro)to contain 50 pips.

http://i49.tinypic.com/4nj4.gif