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No SL No Leverage Strategy - working so far

  • #581
  • May 6, 2012 9:42am May 6, 2012 9:42am
Quoting P.Dean
He is basically saying that the 95% losers of this market all or most of them are the sl believers and none of or less of no sl believers fall into the 95% overall market losers.
If that's the case i like for him to put his mouth where his money is and show it or anyone else in that case.
Problem as I see it, is that one do not have knowledge of what proportion of retail traders use stop losses. From a mathematical or statistical perspective it should be sufficient though to show only one extremely successful trader that do not use stop losses to disprove the hypothesis that using stop losses is a precondition for success. You only need one black swan to disprove that all swans are white. I don't believe he ever made the claim that only traders that don't use stop losses are profitable.
Much depend on luck, but the more you practice the luckier you get! NT & GP
  • #582
  • May 6, 2012 10:07am May 6, 2012 10:07am
Quote
My only claim is:
You can lose using a SL.
You can lose using no SL.
You can win using a SL.
You can lose using a SL.

Donīt take one sentence out of context, P.Dean .

A few postings back 2 successfull traders of this forum were mentioned who make profits without using a SL.
I add nanningbob and Alorente (and myself and Favorite) because I know we all trade profitable without SL but we use different methods.

We donīt need to prove it anymore.
  • #583
  • May 6, 2012 10:33am May 6, 2012 10:33am
excellent example, as clear as Hanover's,

now, let's look at the result:

hedge: -200 floating loss (unrealised)

vs

SL: -200 loss

at this point, this exact point.

if the trader has an edge or a probability that is > 50% to be right in his next decision, let's say 55%

then the expected return of next decision:

hedge:

200 * 55% + (-200) * 45% = 20 pips;

vs

SL:

-200;

i understand that at this point, i didn't do anything for SL scenario (should've entered another pos, maybe?).

anyway, what's wrong of my reasoning above?

thanks a lot for your help and explanation. i'm really confused and not sure about the topic, and that's why i decide to seek you guys' help to clarify my puzzle till the end of the world .

Quoting thelws
Hedge method
1.0000 - Buy ENTRY (pay 1st spread) Pay Rollover for 1 position
0.9000 - Ohnoes... price went wrong way
0.9000 - Hedge (by selling). (Pay 2nd spread). Pay Rollover for 2 position. -100 floating loss
0.7000 - Price reversing. Oh yea. Close hedge leg. +200 pips. (-300 floating loss)
0.6000 - Ohnoes, price didn't move back to my breakeven. Hedge again. (Pay 3rd spread. Pay rollover for 2 positions) -400 Floating loss
[b]Total pips made:...
  • #584
  • May 6, 2012 10:46am May 6, 2012 10:46am
charvo... you are ignoring the whole example and cherry picking bits and pieces you want in order to explain your point of view.

I will copy and paste merlin's words exactly here. This link is his exact post:
http://www.forexfactory.com/showthre...46#post1838646

Quote
lets pretend we are long EURUSD with 10 lots.

to close this position, what do we do? we short 10 lots, right?

if we short 10 lots via a market order, the position is closed.
if we short 10 lots via a limit order, the position is closed.
if we short 10 lots via the hedge feature, the position is closed!

sure, the hedge feature will show two positions open on the platform, but in reality the position is closed. we do not make or lose money as the market moves, which is the same situation as if we had no position at all....

You have NO expected return. You are actually out of the market when you hedge. The example that I gave is as clear as I can make it. I showed you why the no hedging method produces exactly the same result as a hedged method (minus extra costs)
  • #585
  • May 6, 2012 11:14am May 6, 2012 11:14am
Quoting fxtr51
Donīt take one sentence out of context, P.Dean .

A few postings back 2 successfull traders of this forum were mentioned who make profits without using a SL.
I add nanningbob and Alorente (and myself and Favorite) because I know we all trade profitable without SL but we use different methods.

We donīt need to prove it anymore.
Is that the best you got that the two you mentioned are successful!! who said so.. how do we know.. only a fool will make such statement without backing it up with a prof excuse me for saying.
you say, "We donīt need to prove it anymore".. when and where was it that you did prove it in the first place!!..

Listen, at this time and stage of trading world and this forum with their new products and increased knowledge of retail traders, until one does not back what he preaches with a live explorer account and trade it live for over 6 months to a year nothing is for certain and its all just empty talk, do you see the logic in this my friend, this is what i am trying to tell you.

I for one highly doubt that either four of you are profitable.. you guys disagree, ok, my apology in advance, but.. prove it.

You all say you don't have to prove anything, don't have the time, don't care etc, ok fine, but don't preach and lecture either or even open a thread, or say your profitable or so and so are profitable, bcz simply its not sufficient.
Talking a good game and playing a good game are two different things and that is why they play the game. What's laid out, needs to put in action to see if it works in the heart of reality in the eyes of everyone otherwise is as good as useless.

I personally highly command that FF should not allow any trader to open a thread without a explorer account to go with it. I hope they will see this post and think of it highly. This is where all members will for sure get served the real benefit.
  • #586
  • May 6, 2012 12:17pm May 6, 2012 12:17pm
got it so clearly now. Merlin's words indeed convincing!

i'm not a math person really. thanks for the patience.

Quoting thelws
charvo... you are ignoring the whole example and cherry picking bits and pieces you want in order to explain your point of view.

I will copy and paste merlin's words exactly here. This link is his exact post:
http://www.forexfactory.com/showthre...46#post1838646
  • #587
  • May 6, 2012 12:24pm May 6, 2012 12:24pm
Am not impressed with this strategy.
It is directly opposite what i learn here in FF and what i believe from my learnings.
I learned to build + floating profit. But your strategy will always have negative floating profit.
I learned to build positive legs. But your strategy make me to build negative legs.
At some point are latter you will have lot of negative legs smiling at you. If you go back the chart and test it, you will find lot of price which is never retested.
IMO its a bad strategy. Sorry if i hurt you. But it is just to say what i feel about this strategy.

Cheers buddy
  • #588
  • May 6, 2012 3:23pm May 6, 2012 3:23pm
Quoting P.Dean
I personally highly command that FF should not allow any trader to open a thread without a explorer account to go with it. I hope they will see this post and think of it highly. This is where all members will for sure get served the real benefit.
I agree.

(Have you noticed that I never started a trading system thread ?
And I probably never will. There are enough of them in this forum already)
  • #589
  • May 6, 2012 4:06pm May 6, 2012 4:06pm
Quoting nanningbob

That is the fallacy of your argument once again. Here is the real fact, you cannot buy and sell IBM at the same time it is a zero sum, you can only do one or the other as separate transactions. You cant sell IBM if you dont have any. You cannot buy and sell eur/usd. You can buy eur and you can buy usd and you can buy both at the same time because they are two different instruments not unlike stocks etc. I have to buy IBM stock before I can sell it. However with eur/usd I can do both at the same time, I can buy euro and I can buy usd at the same...
Bob what are you on about now?

In the spot forex market, and in the example you've given of Eur/Usd you're buying one currency and selling the other, or if it's simpler for you to understand you're paying for your Eur with Usd. Sure you can buy both Eur and Usd but you still need to pay for them with something! Whatever you pay with you're in effect betting that the value of your purchase, in this case Eur, will increase against the currency you paid with.

As regards selling IBM shares which you don't own, I'm not sure if naked short selling is still allowed in some countries or whether there are restrictions so I can't answer your question, however I'm sure there are other options for someone wishing to bet against IBM's share price.
  • #590
  • May 6, 2012 6:55pm May 6, 2012 6:55pm
Quoting nanningbob
That is the fallacy of your argument once again. Here is the real fact, you cannot buy and sell IBM at the same time it is a zero sum, you can only do one or the other as separate transactions. You cant sell IBM if you dont have any. You cannot buy and sell eur/usd. You can buy eur and you can buy usd and you can buy both at the same time because they are two different instruments not unlike stocks etc. I have to buy IBM stock before I can sell it. However with eur/usd I can do both at the same time, I can buy euro and I can buy usd at the same...
I'm sorry, but there is not a single fact that you got correct there. I thought we already had a discussion about this in another thread...
  • #591
  • May 6, 2012 8:12pm May 6, 2012 8:12pm
Quoting fierceman
I'm sorry, but there is not a single fact that you got correct there. I thought we already had a discussion about this in another thread...
I got it right. When you buy eur on eur/usd you are buying eur. When you sell eur/usd you are buying usd. That is correct.
  • #592
  • May 6, 2012 9:08pm May 6, 2012 9:08pm
Quoting nanningbob
I got it right. When you buy eur on eur/usd you are buying eur. When you sell eur/usd you are buying usd. That is correct.
Yes, that is correct. However, if you use EUR to buy USD, and then use USD to buy EUR, you have no market exposure - your account equity doesn't change regardless of where price moves (except your account is actually leaking due to overnight interest). For all intents and purposes, you are out of the market, and are donating the difference in overnight interest, and an extra spread payment to your broker.

The argument between "hedging" or using an SL is actually absurd, because it amounts to the same thing. When you "hedge", you are in fact exiting your position just like you are with an SL. The only difference is that it costs more to "hedge".
  • #593
  • May 6, 2012 9:39pm May 6, 2012 9:39pm
Quoting fierceman
Yes, that is correct. However, if you use EUR to buy USD, and then use USD to buy EUR, you have no market exposure - your account equity doesn't change regardless of where price moves (except your account is actually leaking due to overnight interest). For all intents and purposes, you are out of the market, and are donating the difference in overnight interest, and an extra spread payment to your broker.

The argument between "hedging" or using an SL is actually absurd, because it amounts to the same thing. When you "hedge", you...
I dont think your really know what I believe or do. As I have explained in the past hedging has very limited uses. I liked it as a time out. The last time I used it years ago. I hedged a profitable trade because my wife wanted to go out for dinner. I came back 3 hours later and found out I had kept my profit and price had reversed. I originally thought it would run but I didnt want to take the chance of losing the position I thought was very good at the time. In that case I saved myself a winning trade. The cost of interest is negligible and really irrelevant. People hedge, hedge is used to control losses, whether you use another currency to hedge, another stock, or bond or whatever............. the principle is still the same, it is meant to prevent large losses which a hedge in forex does. No matter what you use as your hedge instrument, no matter what market you use it in, you always have the same problem no matter what field of investments. That is if you hedge, finding a way of undoing the hedge in a way that makes the transaction profitable is the problem every hedge trader faces in every investment field. To me it is that simple. You see no value in it, great. Some people find an occasional use for it, I average 1 time every 2 years in my usage. Big deal. You want to get all worked up about that be my guest. Some think they can trade that way but they realize they must close the two positions at different times to make it work. Ok I got that, not my cup of tea though. So why keep beating this like the world depends on it. I can understand the concepts, it amazes me some people are stuck in the mud on this. Why do you even bother?

As I have stated before my position on SL is around 1% with an occasional exception if I understand the fundamentals of a currency. However, I trade small positions, low leverage, so I can have a wide margin or field to trade in. I allow trades to become winners. Why? Because most of the time they will. My analysis is pretty good. I am a very strong believer in ranging in Forex. What goes up must come down and what goes down must come up. That is the only truth about Forex I have found to be 100% true all the time. So I trade that truth and the whole philosophy of my trading is based on that truth. It works whether you like it or believe, I dont give a rat's as.....................
  • #594
  • May 6, 2012 10:22pm May 6, 2012 10:22pm
Quoting nanningbob
The cost of interest is negligible and really irrelevant.
Whether it is negligible or not depends. In any case, I don't see why someone would want to incur even a negligible cost in return for absolutely nothing.

Quoting nanningbob
People hedge, hedge is used to control losses, whether you use another currency to hedge, another stock, or bond or whatever............. the principle is still the same, it is meant to prevent large losses which a hedge in forex does. No matter what you use as your hedge instrument, no matter what market you use it in, you always have the same problem no matter what field of investments. That is if you hedge, finding a way of undoing the hedge in a way that makes the transaction profitable is the problem every hedge trader faces in every...
No. This type of hedging only controls your losses insofar as it eliminates (or reduces) your net exposure, which can always be done in a simpler, cleaner and cheaper way, by closing or reducing your position. Real hedging, on the other hand, is used to optimize a portfolio by leveraging the correlation between different markets.
Quoting nanningbob
You see no value in it, great.
There is no value in it, and I'm pretty sure you're smart enough to see that by now.
Quoting nanningbob
You want to get all worked up about that be my guest.
It is difficult to judge someone's tone at internet forums. I assure you, I am not getting worked up about it at all. I am trying to educate people about what, to me, seems like a perfectly simple and logical idea regarding a self-destructive practice which is deceptively called "hedging".

Quoting nanningbob
So why keep beating this like the world depends on it. I can understand the concepts, it amazes me some people are stuck in the mud on this. Why do you even bother?
I guess I could just give up, but I am a persistent mofo. I think that this topic, while not terribly important in itself, is a window into how irrational thinking really can creep into people's trading, and how little some people understand about the market that they are doing business in.
  • #595
  • May 6, 2012 10:46pm May 6, 2012 10:46pm
Quoting fierceman
Whether it is negligible or not depends. In any case, I don't see why someone would want to incur even a negligible cost in return for absolutely nothing.


No. This type of hedging only controls your losses insofar as it eliminates (or reduces) your net exposure, which can always be done in a simpler, cleaner and cheaper way, by closing or reducing your position. Real hedging, on the other hand, is used to optimize a portfolio by leveraging the correlation between different markets.

There is no value in it, and I'm pretty sure you're...
Well, anyway good luck, I do enjoy friendly debates. If people want to deal with two trades instead of one, be my guest. I think at this point I have tried everything there is to try in the market and I have my preferences. It is true that the more skilled I get the less I have to use certain questionable techniques in trading. Some things I like to do, like multiple levels and entering the market in parts instead of all in all out positioning. I understand I am not always going to get in the market right the first or even the second time even though my overall analysis is sound. I startd almost 6 years ago when a trader taught me to trade the 15M chart. Got tired of getting my head bashed in and whip-lashed. Then it was the 1H, then the 4H, then the daily, now the weekly trend, with daily strength entering off of the 4H chart pivot/S/R levels. I am comfortable with the concept of top down analysis and giving trades a wide berth. I find it consistently profitable. The bottom line is what we all want to do, just be consistently profitable. Some will do better than others. Anyway good luck to you, I really dont disagree that much with you on the issue of hedging other than the concept that on occasion I can see a purpose for it rather than your position of never a purpose. Fair enough I can accept that. So on to the next concept. What is really good about these debates is not so much for you and I but other traders can see the different concepts and come to their own conclusions. In that way you and I have both served a purpose to the FF community.
  • #596
  • Edited May 7, 2012 12:54am May 6, 2012 10:56pm | Edited May 7, 2012 12:54am
I'm going to try and stay away from talking about hedging or no stop loss for some time. It becomes repetitive nonsense after awhile. If someone wants to hedge to give themselves a false sense of security even at a greater cost then that's their choice. Sometimes devices help people cope with the situation from a mental aspect. Fortunately, hedging is a crutch I don't need nor have the temptation of falling victom to. If someone believes that swap payout to broker is negligible, then that's their opinion really. I prefer to keep that money since I feel paying it does not provide me with an advantage and hedging actually increases the length of time to achieve my goals on profit. Lastly, anyone who uses a broker that does not allow hedging on the same account has now consumed double the amount of margin neccessary to have a net flat position.
  • #597
  • May 6, 2012 11:00pm May 6, 2012 11:00pm
Quoting 2+2=4ex
I'm going to try and stay away from talking about hedging or no stop loss for some time. It becomes repetitive nonsense after awhile. If someone wants to hedge to give themselves a false sense of security even at a greater cost then that's their choice. Sometimes devices help people cope with the situation from a mental aspect. Fortunately, hedging is a crutch I don't need nor have the temptation of falling victom to. If someone believes that swap payout to broker is negligible, then that's their opinion really. I prefer to keep that money since...
So have you read 10.2 yet?
  • #598
  • May 7, 2012 12:20am May 7, 2012 12:20am
Quoting fierceman

Yes, that is correct. However, if you use EUR to buy USD, and then use USD to buy EUR, you have no market exposure
It's amazing the amount of people who simply can't seem to understand that very basic principle!

What you'll find with Bob though is that when someone points out he's totally wrong about something, rather than admit he's wrong he'll either ignore it and bury his head in the sand, try to squeeze the toothpaste back in the tube, or come out with some obvious remark like "I got it right. When you buy eur on eur/usd you are buying eur. When you sell eur/usd you are buying usd. That is correct.". It's quite funny to watch.....
  • #599
  • May 7, 2012 12:52am May 7, 2012 12:52am
Quoting pipmutt
It's amazing the amount of people who simply can't seem to understand that very basic principle!

What you'll find with Bob though is that when someone points out he's totally wrong about something, rather than admit he's wrong he'll either ignore it and bury his head in the sand, try to squeeze the toothpaste back in the tube, or come out with some obvious remark like "I got it right. When you buy eur on eur/usd you are buying eur. When you sell eur/usd you are buying usd. That is correct.". It's quite funny to watch........
What is really funny is you dont even realize you just made a fool of yourself. Good show.
  • #600
  • May 7, 2012 1:31am May 7, 2012 1:31am
I personally highly command that FF should not allow any trader to open a thread without a explorer account to go with it. I hope they will see this post and think of it highly. This is where all members will for sure get served the real benefit.[/quote]

PDean, Now that is a very good idea.

Works both ways as well, OP sets up an account to prove/ dissprove the method, but thoses members that know that the idea is flawed will also have to link in their account to provide reasonable reasons with evidence as to why its BS, rather than the usual shooting from the hip.

Somehow I can't see that becoming the norm on here,.

M.
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