someone help me transition to using stops | Forex Factory

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someone help me transition to using stops

  • #1
  • First Post: Jan 11, 2012 6:18pm Jan 11, 2012 6:18pm
So i demo traded the whole summer, in 5 months starting with 500 of fake money and turned it into $3000, using a very arbitrary strategy that involves buying in pieces (buying at support or selling at resistance, then if it goes against me buying/selling at the next sup/res as long as it is at least 100 pips away), 2 currencies that arn't exactly correlated but follow similar direction (i did this as it adds a bit of diversity, one might go into profit in that case i would funnel those profits into the losing position) and buying and buying if it goes against me up to a maximum leverage of about 15x (I only had to get up to that point once) the majority of the time it was 5-10x.

I have started doing this now for a month and a half with real money, about $200, am up to $280... however the thought of trading without a stoploss is scarring me every time i take a position, i am trading exactly the same way as i did the demo account and have a similar goal. How can i go about transitioning to using stops... my strategy isnt exactly stop friendly and my ego HATES losing.

please help.

Thankyou for the responses and i'd appreciate the input of some seasoned traders that successfully use SLs.

-Pat
  • #2
  • Jan 12, 2012 5:05am Jan 12, 2012 5:05am
That's a dangerous strategy. You'll be earning small amounts just to lose everything when the price finally goes against you and you won't have enough margin to cover all those paper losses.
  • #3
  • Feb 19, 2012 5:21pm Feb 19, 2012 5:21pm
I am in the exact boat as you my friend. I know its bad to not use a stop however I just started making money when I took one off.
All posts are my personal opinion
  • #4
  • Feb 19, 2012 8:35pm Feb 19, 2012 8:35pm
Quoting staffpro
So i demo traded the whole summer, in 5 months starting with 500 of fake money and turned it into $3000, using a very arbitrary strategy that involves buying in pieces (buying at support or selling at resistance, then if it goes against me buying/selling at the next sup/res as long as it is at least 100 pips away), 2 currencies that arn't exactly correlated but follow similar direction (i did this as it adds a bit of diversity, one might go into profit in that case i would funnel those profits into the losing position) and buying and buying if it...

Hey Pat, why not only deposit money you're willing to lose. In a way your margin call can be your stop loss. Only deposit into your trading account 5 or 10% of your available capital.. And the rest could be earning interest in Bonds or fixed interest securities, always have some available in your bank account for a new deposit. Stay liquid. Don't put all your eggs in one basket so to speak.

Obviously this will cut into your profits but thats the trade off you will need to make in order to be "safe".
Time hides Nothing
  • #5
  • Feb 19, 2012 9:17pm Feb 19, 2012 9:17pm
  •  MPP
  • Joined Jun 2007 | Status: Be yourself, everyone else is taken | 2,734 Posts
Quoting staffpro
So i demo traded the whole summer, in 5 months starting with 500 of fake money and turned it into $3000, using a very arbitrary strategy that involves buying in pieces (buying at support or selling at resistance, then if it goes against me buying/selling at the next sup/res as long as it is at least 100 pips away), 2 currencies that arn't exactly correlated but follow similar direction (i did this as it adds a bit of diversity, one might go into profit in that case i would funnel those profits into the losing position) and buying and buying if it...

if your nervous - you're over trading

go back to the demo account and get the system down to a tee - so you can do it in your sleep.

focus on your exit method, Sl is simply a version of an exit method and all systems must have an exit strategy. I don't trade with a Sl, i exit when either my tp is hit or the market tells me that my direction is no longer valid.

but most importantly I trade a lot size i feel comfortable with.
  • #6
  • Feb 19, 2012 10:09pm Feb 19, 2012 10:09pm
MPP's post is a great answer. I feel that esp. if you are trading MT4, showing the dealer your SL may not really be in your best interest. Having a "mental" stop is similar to knowing when the market no longer agrees with you.
Disregard all prognostications.
  • #7
  • Feb 19, 2012 10:49pm Feb 19, 2012 10:49pm
Quoting staffpro
my strategy isnt exactly stop friendly and my ego HATES losing.
-Pat
People are telling you to only risk money you can lose, but that's really not the issue, is it? The issue is clearly stated, it's his ego, not the money. It's a common problem, especially if you're an American. Everything in our society primes us to be a winner. Hell, we don't even recognize 2nd place as being of much value.

When I started trading live I put $5k into an account. At the time, I was making $50k and my wife was making $45k and we didn't have kids then. So $5k to me was really not an issue at all. Yet I hated losing as much as the next guy. I truly didn't give a shit about the money, but losing trade was a huge blow to my sense of self, and it's easy to internalize each loss as some sort of failing that can be solely attributed to yourself.

What you need to do, as I did as well, is to focus on trading as a season, or long term activity. Each trade by itself means nothing in the long run, assuming you don't blow your account in one trade. This is the true value of small amounts of risk per trade. But just like a baseball season of 162 games, losing one game is not a big deal. It's the season total that really matters. That's just one part of the mindset that is needed.

The other part is understanding exactly why you are trading. Everyone says it's for the money and the freedom from all the idiots and assholes in their life. Yet, it's always more than that in the beginning. You need to identify what it is you want and address it.

Yes, you need an edge, as the tirelessly boorish insist upon insisting. Yet, if you engage in destructive behavior by not controlling your ego, you're screwed. The change is gradual, all from within and necessary to do this. You know you need to use some type of stop system, you're not an idiot. Yet, you come seeking here as if someone will provide you with an easy method to do it. That's not going to happen. Work it out yourself, work yourself out.
  • #8
  • Feb 19, 2012 11:21pm Feb 19, 2012 11:21pm
Quoting Dopey
I truly didn't give a shit about the money, but losing trade was a huge blow to my sense of self, and it's easy to internalize each loss as some sort of failing that can be solely attributed to yourself..
You know, I think not caring about money is a serious problem for a trader - at least, it has been for me. Personally, I just don't care that much about money. I have been rich and I have been poor and I have been happy either way. I could blow out an account and I don't really care. So, my goal in trading is to trade OPM. I might not care about losing my money but I am sure I would dread losses of OPM.

Quoting Dopey
What you need to do, as I did as well, is to focus on trading as a season, or long term activity. Each trade by itself means nothing in the long run, assuming you don't blow your account in one trade. This is the true value of small amounts of risk per trade. But just like a baseball season of 162 games, losing one game is not a big deal. It's the season total that really matters. That's just one part of the mindset that is needed.

The other part is understanding exactly why you are trading. Everyone says it's for the money and the freedom from...
Good advice. I would suggest self-imposing hard stops on every trade and mandatory cessation of any trading for a month at least if you move/remove a hard stop even once. If a trader can not discipline himself to accept losses his days are numbered anyway.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #9
  • Feb 20, 2012 1:40am Feb 20, 2012 1:40am
Quoting The Fool
You know, I think not caring about money is a serious problem for a trader - at least, it has been for me. Personally, I just don't care that much about money. I have been rich and I have been poor and I have been happy either way. I could blow out an account and I don't really care. So, my goal in trading is to trade OPM. I might not care about losing my money but I am sure I would dread losses of OPM.
Don't read that much into it. I didn't care about the $5k, not money in general. To me, it was the same as if I had paid a fee or something of that nature, like renewing my residency visa, once the money was paid out, it was gone. The only people who truly don't care about money don't have any.

I never understood the OPM thing. If a person truly cares about money, then losing OPM is always preferable to losing your own. I believe that when people say that losing OPM is tougher, there is something else at work, such as loss of prestige, respect, honor, etc. If the relationship is clearly stated and understood between the fund and the client, then losing is part of the business and it has nothing to do with anyone's integrity. Unfortunately, most people don't, or can't, think this way.
  • #10
  • Last Post: Feb 22, 2012 12:56am Feb 22, 2012 12:56am
Quoting staffpro
using a very arbitrary strategy ....
If your methodology requieres active management of positions (not using fixed stops) I would agree with the suggestion of using a Margin Call or a %of total trading capital as your stop loss level. (deposit only what you are willing to risk)

However, your comment (quoted) suggests that either your results were pure luck or you still can't put your ideas/concepts together into a trading methodology. I would concentrate into that before risking any real money, with or without stops.

regards
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