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No SL No Leverage Strategy - working so far

  • #501
  • Apr 17, 2012 2:48pm Apr 17, 2012 2:48pm
Quoting Nacho
Bluesteele banned. He is not giving any contribution to this thread but just insulting other traders anyway.
Imagine that !!


And congratulations "Nacho".

A great "trade".
When the Joker is in the deck.. fear not and play it well
  • #502
  • Apr 17, 2012 3:02pm Apr 17, 2012 3:02pm
Quoting nanningbob
The sharp correction for EURUSD up from 1.3000 to 1.3145 at the start of this week has left many pundits bewildered. .....
Good article. However, I still prefer to use SLs, for the reasons given here. Each to their own.
  • #503
  • Apr 17, 2012 10:47pm Apr 17, 2012 10:47pm
Quoting nanningbob
I dont hedge, I cant, unless I use multiple accounts but I dont there either. I have found in practicing it on a demo to be a headache to unhedge the trade. I dont know how you guys ever got to me using hedging. My threads are open to the public and I have written thousands of posts. You havent found me propagating hedging in any of my material. I have mentioned it but it has never been part of any trading strategy of mine other than the only real use I have seen for it is a time out for some reason. It freezes time so you can relax, plan, and think...
Using hedge for freezing time = dumb.

Just close the position. Same thing.
  • #504
  • Apr 17, 2012 10:50pm Apr 17, 2012 10:50pm
Quoting nanningbob
Still waiting for your wit and wisdom in using SL. Dont worry I am not expecting it, I know you cant teach or train. Head bashing is your best skill. I used to trade around 60% but now am closer to 80% 77.04% to be exact for the last 9 months. If you dont understand that it means almost 23% of my trades are losers. Dang he takes losses. Bet that amazes you doesnt it. Man you are a piece of work.
No one doubts you're high winning rate. What is questionable is the method you trade and amount you are risking to get that high win rate. Risk is proportional to reward. There is no way around it no matter how fancy your money management.
  • #505
  • Apr 17, 2012 10:53pm Apr 17, 2012 10:53pm
Quoting fierceman
There is no difference between the concepts. It is the same concept. By hedging, you are closing your position, but paying for it. It makes no sense. There is no such thing as "freezing" your position. It's either open or it is closed. You are either exposed to the market or you are not. That's all there is to it. All this hedging stuff just obscures the truth that you are either in or you are out.
That's exactly right. All one is doing is playing a mind game when they hedge. A mind game that actually costs them money.
  • #506
  • Apr 17, 2012 10:56pm Apr 17, 2012 10:56pm
Quoting bluesteele
Sounds like gambling too me.

Why not fade the gap.
I have a thread I once started on trading the gap before close and after open. It was essentially a stab at double or nothing. The only risk was that the gap wouldn't close which is unusual. See here: http://www.forexfactory.com/showthread.php?t=234477
  • #507
  • Apr 17, 2012 11:23pm Apr 17, 2012 11:23pm
Quoting 2+2=4ex
That's exactly right. All one is doing is playing a mind game when they hedge. A mind game that actually costs them money.
I used to love hedgeing. Take now for example. I have a signal with a target of 3025, and a signal with a target of 3182. would love to be able to shoot for both targets using the same margin, instead of trying to guess which target will be hit first. Oh well guess that's what I get for being a U.S citizen.
All that is left in FF is just plain garbage. "Cloggie"
  • #508
  • Apr 17, 2012 11:27pm Apr 17, 2012 11:27pm
Quoting thelws
Leverage has almost no effect on a trader with stops if that is what you want to know. In fact, leverage only affects traders with no stops.

Exactly. The funny thing is I pointed this out to Bob a while back ago. I pretty much asked what is he going to do with the open trades that are hundreds of pips in the red when the required margin becomes greater due to regulation. This clearly crushes the trader-without-stops' strategy. Yet he now mentions it as a benefit to trading without stops. Poor bob has his head screwed on backwards.
  • #509
  • Edited Apr 18, 2012 1:26am Apr 17, 2012 11:35pm | Edited Apr 18, 2012 1:26am
Quoting tonyo524
I used to love hedgeing. Take now for example. I have a signal with a target of 3025, and a signal with a target of 3182. would love to be able to shoot for both targets using the same margin, instead of trying to guess which target will be hit first. Oh well guess that's what I get for being a U.S citizen.
Yea, using the same margin you can't in the US. However, you can still execute the strategy with a second account - although double the margin. Contrary to what one might believe, I do advocate taking positions that just happens to create a hedge in some circumstances, if the entries and exits are independent of each other. In other words the trade setup/plan is based off different time frames. I actually listed this type of trading style on my website. Again, the intent is to not create a hedge, just trading two different setups that happen to make a hedge. Also, the hedge is not completely offset due to differing position sizes since multiple time frames. In most cases one results in a loss and one results in a profit. In some cases, although not frequent, both trades result in profit. Never do both trades result in loss if you know how to set it up properly. Of course both trades need to be based off of something that gives you an edge such as S/R.
  • #510
  • Apr 18, 2012 12:14am Apr 18, 2012 12:14am
Quoting 2+2=4ex
Exactly. The funny thing is I pointed this out to Bob a while back ago. I pretty much asked what is he going to do with the open trades that are hundreds of pips in the red when the required margin becomes greater due to regulation. This clearly crushes the trader-without-stops' strategy. Yet he now mentions it as a benefit to trading without stops. Poor bob has his head screwed on backwards.
Actually leverage effects the number of positions you can take. The lower the leverage the fewer positions you can take. It also effects the lot size you can use. If you are a one in one out trader yes it has very little effect.
  • #511
  • Apr 18, 2012 4:54pm Apr 18, 2012 4:54pm
Folks,

please stop this discussion:

Nanningbobs live results http://www.forexfactory.com/showthre...69#post3951969

Withstand drawdown more than 1000 pips , average earning per month 3-10% (50% (?) a year.

ANYBODY of you can beat this, hanover or 2+2=4ex, then I'm with you.
I trade sth. similar like Nanningbob and average 14% a year right now, getting better day to day.
My capital usage on 50:1 is below 2,5 % with a maxentry of 5 % and stop by 1% which happens 1 time a month if I'm unlucky.
What's your return p.a. ?

greets Jack

PS: I appreciate your comments very much hanover, although I'm not with you. Thanks for posting @ forexfactory.
  • #512
  • Apr 18, 2012 8:11pm Apr 18, 2012 8:11pm
This SL vs. No SL debate is endless and traders on both sides have shown with their method a trader can be profitable either way. However, I believe the real difference is the amount of return on your investment potential each of those successful methods can generate.

I have traded both methods successfully over my 10 years of trading and the use of a SL allows you to generate more income from your investment. Now I did clarify my criteria as both methods being successful for the basis of my opinion. Use of a SL is not easy to master, however once mastered the profits are immense. Early in my career I used one and quickly found out I was a poor trader. However, over the past 12 months I have studied, learned and conquered my past failure of the use of a SL in a system. So, it is very possible and profitable to use a SL and for it to be very small to maximize your position size.

Here is an example from a trade I took this evening. This is a classic reversal pattern where prior resistance turns support. I have drawn the green line to show the downtrend, which also shows where support and resistances areas are developed. I have drawn a maroon box to show the levels. We get a trendline break, a break through previous resistance and the test of new support. The 81.19 line defines the level which we can establish our risk to set a position size and is our new support. In this trade, I planned 15 pip stop at 81.09. You can see the low is 81.17, so this went past my projected support by 2 pips. That is all. The RR on this trade is 15 pips risk and the next resistance line provides 60 pips profit. A 1:4 ratio. These patterns happen over and over, where you have a very high level of confidence about the outcome.

I hope that is helpful and I think both can produce profits, but for me it really boils down to how well you use your investment.

Good Trading to you all.

George
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  • #513
  • Apr 18, 2012 9:19pm Apr 18, 2012 9:19pm
Quoting 2+2=4ex
No one doubts you're high winning rate. What is questionable is the method you trade and amount you are risking to get that high win rate. Risk is proportional to reward. There is no way around it no matter how fancy your money management.
So, if Bob has a consistently high winning rate because of his disproportionate R:R, is that a flawed trading strategy?


If there's no way of going around or over proportional R:R, then shame on Bob for not adhering to proportional R:R
  • #514
  • Apr 18, 2012 11:02pm Apr 18, 2012 11:02pm
Quoting JackintheBox
PS: I appreciate your comments very much hanover, although I'm not with you. Thanks for posting @ forexfactory.
Jack, many thanks for the kind words.

You might be interested in this thread where folk are claiming 10%-30% returns, not per year, but PER WEEK. Even though this sounds way too good to be true, I believe that it's possible, and in my post here I explain why.

I use SLs because I personally hate drawdown. I can't stomach watching positions move against me for too long, and my money slowly disappearing down a black hole. But everybody is different. That's a big reason why these discussions are interesting.

Bottom line is that if somebody is happy with the return that they're making, and is comfortable with the level of risk involved, then that's their personal choice. Nobody can argue with that.

Good trading to you, I wish you great success.

Quoting George Adams
This SL vs. No SL debate is endless and traders on both sides have shown with their method a trader can be profitable either way. However, I believe the real difference is the amount of return on your investment potential each of those successful methods can generate.
George, I agree with you entirely. S/R and trendlines can give great low risk entries, which I've attempted to show elsewhere. There are some great techniques in these threads: here and here. If you can get low risk entries/high RR trades on a TF that allows high frequency trading, and therefore rapid opportunity for compounding, the sky is the limit.

I wish you continued success also.

David
  • #515
  • Apr 18, 2012 11:20pm Apr 18, 2012 11:20pm
Quoting Schminner
So, if Bob has a consistently high winning rate because of his disproportionate R:R, is that a flawed trading strategy?


If there's no way of going around or over proportional R:R, then shame on Bob for not adhering to proportional R:R
Depends what you want risk to reward. As I have said before my SL are based on percentages rather than a fixed pip rate. Goes something like this: SL percent of account =1%. On a 2000 dollar account if you trade 1 dollar lot size 1% SL would be 20 pips, a dime = 200 pips and a penny would equal 2000 pips. Lower lots size gives you more trading room and therefore a higher rate percentage of winners. Risk to reward is not measure as a ratio of 4:1 or 2:1 but wins versus losses. I am not adverse to taking the 20-40 pips during the JPY session, 30-60 during he euro session and the 50-100 during the USA session. The problem I have with the you cannot trade any other way crowd and must follow our rules crowd is if you change the rules, they will crucify you. I have taken 920 trades so far this year and only 10 have hit my 1% loss limit. That means my risk is 1% potential max loss on every trade I take. In other words for every 100 trades I make only 1 hits my maximum risk of 1% of my account. I have had three of the ten go a little longer and hit 1.5%. So I dont think my risk to reward is off at all. Again you are only defining things within the, these are the only rules parameters. I believe my system is basically risk free and returns 7-10% a month. I don't doubt you can earn more but consistency and regular return is what I look for and what I want. Low risk, great reward, unless you are stupid enough to think 10% a month is a lousy return.
  • #516
  • Apr 19, 2012 12:36am Apr 19, 2012 12:36am
@fxtr51

if i understand you correctly with the lock-unlock method you place a 'hedge' trade at the point where usually a SL happens and freeze this loss.
later with a new signal you unfreeze the loss for a potential BE or profit, but also a potential risk that this floating loss getting bigger.

It will make more sense to do this with the TP instead SL and take the loss and bigger up the profits,
because then the losses will be linear but the profits grows exponential.
  • #517
  • Edited 1:53am Apr 19, 2012 1:40am | Edited 1:53am
Quoting Schminner
So, if Bob has a consistently high winning rate because of his disproportionate R:R, is that a flawed trading strategy?


If there's no way of going around or over proportional R:R, then shame on Bob for not adhering to proportional R:R
My post could of been worded better. I was not questioning his win rate or his monthly return up to now. Quite frankly I don't care. When I said bob's method is questionable, I meant that his method is left open to high degrees of ruin because he does not put a cap on his loss from the moment the trade is placed. He basically just diddle daddles with trade entries and then says he looks to trim losses when the cumulative drawdown of all open trades reaches 20% - or whatever it is nowadays.

Also, I've posted many times that it is possible to trade profitably without a stop loss. My whole contention with bob is that a no-stop method cannot outperform a stop loss method so long as the trader executing the stop loss method does it properly. It's basic math that explains higher trade turnover (with an edge) with greater position sizes = greater profit due to compounding (as compared to some quasi-averging down strategy). Bob's method, the way he describes it, is a mess in my opinion. He's basically carry trading and averaging down with some sort of martingale element for recovery. Like I said it's a mess and he has no edge or mechanism to prevent large losses. Since he lacks these he cannot compound his gains. So long as he refuses to learn how to trade with a stop loss he will never double his account in a year without extremely good luck. And if he does get lucky one year eventually he will lose it and be set back years because his strategy is not sustainable due to the vulnerability of big drawdowns.

So many traders neglect time and opportunity cost. I find neglecting those equates to much less profit long term. If you want to be a carry trader (more like investor) I wish you luck. I find it more profitable to do actual (real) trading.

With all that said, no one is wrong and no one is right. We all have different preferences. Perhaps the biggest difference we have, which leads to these lengthy debates, is brought on by our goals and preferences. I have choosen to aim very high. I'm looking for aggressive growth at the expense of less room for error. Which for some can lead to higher stress. Someone who is looking to just gain a steady 10-20% annually (averaged) without any stress may opt for the low leverage without stops loss approach like bob. Again, just a matter of preferences and goals.
  • #518
  • Apr 19, 2012 2:25am Apr 19, 2012 2:25am
Quoting Mediator
@fxtr51

if i understand you correctly with the lock-unlock method you place a 'hedge' trade at the point where usually a SL happens and freeze this loss.
later with a new signal you unfreeze the loss for a potential BE or profit, but also a potential risk that this floating loss getting bigger.

It will make more sense to do this with the TP instead SL and take the loss and bigger up the profits,
because then the losses will be linear but the profits grows exponential.
There are many ways to manage the lock-unlock method.
And you can trade using SL profitably too.
It is a matter of taste.

We havenīt discussed ideas like yours because of the SL-missionaries
and I will not continue to discuss anything in this thread ....
because I need to watch my trades and do other things.
  • #519
  • Apr 19, 2012 4:15am Apr 19, 2012 4:15am
Quoting fxtr51
There are many ways to manage the lock-unlock method.
And you can trade using SL profitably too.
It is a matter of taste.

We havenīt discussed ideas like yours because of the SL-missionaries
and I will not continue to discuss anything in this thread ....
because I need to watch my trades and do other things.
ok. i respect your answer and thank you for your response.
  • #520
  • Apr 19, 2012 4:25am Apr 19, 2012 4:25am
Quoting fxtr51
There are many ways to manage the lock-unlock method.
And you can trade using SL profitably too.
It is a matter of taste.

We havenīt discussed ideas like yours because of the SL-missionaries
and I will not continue to discuss anything in this thread ....
because I need to watch my trades and do other things.
For me I am at the copy machine at school and messing with these guys is better than staring out the window at a group of kindergarten kids. At least 2+2 has clearly delineated our differences. It is not that I havent tried what he is talking about, it is because of my work schedule I only have a few moments every 4-6 hours to trade. So if I trade like him all I ever did was miss trades. Easier just to set them up in the morning when I get up and then monitor them several times a day. That is why I have a lot of people who follow my threads. They have to trade like I do. Anyway off to get a professional Chinese massage. They go to traditional Chinese schools for years and learn to do it right. Tah Tah.
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