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No Stop Losses!!!

  • #21
  • May 10, 2006 1:32am May 10, 2006 1:32am
Quoting Darkstar
Well, in all fairness I frequently lose 10-30% on a failed trade so that doesn't bother me. I technically have a catastrophic stop too, its called a margin call at 50% loss. What makes it work for me is that a winner nets 30-100% and the wins are far more common then the losses. It's not how most people trade, but I'm ok with that...

I guess it really depends on why your taking the trades you are. If your taking them because of a chart formation or an indicator then by all means you should use a stop incase the formation doesn't pay off. My reasons for taking trades have very little to do with the chart so a stoploss is an arbitrary guess as to how things will play out.

A good part of why this works is because I don't take any random trade. If I don't know exactly what’s going on I hold off until I do. Risking 50% of my account keeps me from gambling on possible winners.

The point I was trying to make was that if your not supremely confident in the trade, you probably shouldn't be taking it. Trading without a stoploss is a testament to how much you really believe in your analysis. If you don't believe in it enough or can't accurately determine what your risking, then maybe you should consider that your analysis needs to be improved. A stoploss in the manner that it is deployed by most is simply a crutch for bad analysis.

PS- I say you, but I don't really me you, just anyone in particular that happens to read this...
Darkstar, sorry I'm not criticizing. I understand your logic but the reasons for your trades are known and understood by few. By and large 99% are trading indicators and systems that have no intrinsic meaning and that, though profitable, would not be so without stop losses. So whilst your stop loss policy works for you, applied to most it would be leathal.

Generally speaking, most should be risking only 1%-2% which would (hopefully) keep them in the game long enough to learn something. I think its important that most understand this and therefore you are the exception to the rule rather than the model of it.
I was here, here I was. Was I here? Yes I was!
  • #22
  • May 10, 2006 1:45am May 10, 2006 1:45am
Quoting SterlingTDR
Darkstar, sorry I'm not criticizing. I understand your logic but the reasons for your trades are known and understood by few. By and large 99% are trading indicators and systems that have no intrinsic meaning and that, though profitable, would not be so without stop losses. So whilst your stop loss policy works for you, applied to most it would be leathal.

Generally speaking, most should be risking only 1%-2% which would (hopefully) keep them in the game long enough to learn something. I think its important that most understand this and therefore you are the exception to the rule rather than the model of it.
I would definitely agree with you on all points.
  • #23
  • May 10, 2006 1:48am May 10, 2006 1:48am
Quote
I wasn't picking anyone as an example brother. [img]images/smilies/smile.gif[/img]

Just trying to add an additional perspective...

Sorry don't get me wrong, wasn't taking personal offense at all ... as you were ... just adding my own perspective
You can quit and they won't care, but you will always know.
  • #24
  • May 10, 2006 2:47am May 10, 2006 2:47am
i love hard stops...really...best thing ever...you do your best analysis,you are selective, you are patient to pick the best low risk spots you can get...ok, BUT, the moment, the trade is on, you are exposed, you just have to see, if the market allows you to cut out a little piece this time...

oh, btw, i think, trade managment is overrated (dont micro manage!!)...
  • #25
  • Sep 11, 2006 8:50am Sep 11, 2006 8:50am
As someone who trades Crude Oil as well as the Nordic pairs, trading without a stop would be a surefire way to emotional, financial and psychological ruin.
  • #26
  • Sep 11, 2006 9:58am Sep 11, 2006 9:58am
I personally use stops, but, I also think this is a fairly fruitless conversation only because what works for some works for others. I know a couple of traders that do not use stop losses and do quite well. It all boils down to the system you have and how you personally trade.

But, I do see renasdad's point. If you are trading with stops, then, you need to make sure you have a redundant method for making sure the stops get executed. I recently signed up for a VPS server and run my experts (which manage my SL's) from that. It's working nicely and I don't worry about what happens if my connection goes down in the middle of a trade.
  • #27
  • Sep 11, 2006 3:20pm Sep 11, 2006 3:20pm
I used to trade without stop losses and have not lost a trade doing this but have had some uncomfortable situations (the worst was 40 points away from a 50% account drawdown). You can get away with it when the markets ranging but when a nice trend starts in the wrong direction for you it could be a long wait for it to return and at what point do you decide to take the loss? I now use stop losses on all trades as I'd rather take the loss and move on rather than the slow torture of watching the price move against me day after day.
  • #28
  • Sep 11, 2006 5:54pm Sep 11, 2006 5:54pm
Quoting Darkstar
Well, in all fairness I frequently lose 10-30% on a failed trade so that doesn't bother me. I technically have a catastrophic stop too, its called a margin call at 50% loss. What makes it work for me is that a winner nets 30-100% and the wins are far more common then the losses. It's not how most people trade, but I'm ok with that...

I guess it really depends on why your taking the trades you are. If your taking them because of a chart formation or an indicator then by all means you should use a stop incase the formation doesn't pay off. My reasons for taking trades have very little to do with the chart so a stoploss is an arbitrary guess as to how things will play out.

A good part of why this works is because I don't take any random trade. If I don't know exactly what’s going on I hold off until I do. Risking 50% of my account keeps me from gambling on possible winners.

The point I was trying to make was that if your not supremely confident in the trade, you probably shouldn't be taking it. Trading without a stoploss is a testament to how much you really believe in your analysis. If you don't believe in it enough or can't accurately determine what your risking, then maybe you should consider that your analysis needs to be improved. A stoploss in the manner that it is deployed by most is simply a crutch for bad analysis.

PS- I say you, but I don't really me you, just anyone in particular that happens to read this...
ok...this is creepy. I trade the exact same way as you do, and if you ever posted your strategy online, I can assure you that I haven't read it. I use trendlines and other basic technical stuff to figure out my entry and exit points.
  • #29
  • Sep 11, 2006 5:56pm Sep 11, 2006 5:56pm
Quoting Darkstar
Well, in all fairness I frequently lose 10-30% on a failed trade so that doesn't bother me. I technically have a catastrophic stop too, its called a margin call at 50% loss. What makes it work for me is that a winner nets 30-100% and the wins are far more common then the losses. It's not how most people trade, but I'm ok with that...

I guess it really depends on why your taking the trades you are. If your taking them because of a chart formation or an indicator then by all means you should use a stop incase the formation doesn't pay off. My reasons for taking trades have very little to do with the chart so a stoploss is an arbitrary guess as to how things will play out.

A good part of why this works is because I don't take any random trade. If I don't know exactly what’s going on I hold off until I do. Risking 50% of my account keeps me from gambling on possible winners.

The point I was trying to make was that if your not supremely confident in the trade, you probably shouldn't be taking it. Trading without a stoploss is a testament to how much you really believe in your analysis. If you don't believe in it enough or can't accurately determine what your risking, then maybe you should consider that your analysis needs to be improved. A stoploss in the manner that it is deployed by most is simply a crutch for bad analysis.

PS- I say you, but I don't really me you, just anyone in particular that happens to read this...
PS: I think you traded the yen last night, cuz I did it, and I was very sure of what was going to happen.
  • #30
  • Sep 11, 2006 6:00pm Sep 11, 2006 6:00pm
No trend lines, Infact they would be misleading. But I bet it is a similar style.

Scott


Quoting blueshift
ok...this is creepy. I trade the exact same way as you do, and if you ever posted your strategy online, I can assure you that I haven't read it. I use trendlines and other basic technical stuff to figure out my entry and exit points.
  • #31
  • Sep 11, 2006 6:04pm Sep 11, 2006 6:04pm
Quoting Snaffle
I used to trade without stop losses and have not lost a trade doing this but have had some uncomfortable situations (the worst was 40 points away from a 50% account drawdown). You can get away with it when the markets ranging but when a nice trend starts in the wrong direction for you it could be a long wait for it to return and at what point do you decide to take the loss? I now use stop losses on all trades as I'd rather take the loss and move on rather than the slow torture of watching the price move against me day after day.
That is why one doesn't guess when risking that much. You must be sure. At the beginning of every week (this is where I've been noticing a lot of reversals) I revaluate the whole situation, and I patiently wait for a good entry point. And I always avoid ranging markets.
  • #32
  • Sep 12, 2006 7:47am Sep 12, 2006 7:47am
Quoting Darkstar
Well, in all fairness I frequently lose 10-30% on a failed trade so that doesn't bother me. I technically have a catastrophic stop too, its called a margin call at 50% loss. What makes it work for me is that a winner nets 30-100% and the wins are far more common then the losses. It's not how most people trade, but I'm ok with that...

I guess it really depends on why your taking the trades you are. If your taking them because of a chart formation or an indicator then by all means you should use a stop incase the formation doesn't pay off. My reasons for taking trades have very little to do with the chart so a stoploss is an arbitrary guess as to how things will play out.

A good part of why this works is because I don't take any random trade. If I don't know exactly what’s going on I hold off until I do. Risking 50% of my account keeps me from gambling on possible winners.

The point I was trying to make was that if your not supremely confident in the trade, you probably shouldn't be taking it. Trading without a stoploss is a testament to how much you really believe in your analysis. If you don't believe in it enough or can't accurately determine what your risking, then maybe you should consider that your analysis needs to be improved. A stoploss in the manner that it is deployed by most is simply a crutch for bad analysis.

PS- I say you, but I don't really me you, just anyone in particular that happens to read this...
I have a few points that I wanted to make on this comment.

1)Just out of curiosity..are you trading real money?
2)Losing 10-30% on any trade is absolutely nuts. No matter how accurate your system is, you are begging for trouble. Your risk of ruin is just off the wall here. If you keep losing those huge amounts, you are simply going to wipe yourself out. It is possible to hit a losing streak. There are NO GUARANTEES in any market. I see people on this board wasting their time optimizing optimizing optimizing, and they simply don't get that no one will be that perfect. If you hit a bad streak, you are going to start from zero. Stop losses are a huge part of risk management, they define the trade. At some point BEFORE you place the trade you should be saying "ok, this is where I know I'll be wrong", put in the stop loss, and that is it. It is NOT a crutch. Out of personal experience I have wiped out my account when I first started to trade real money and the reason for the blowout was the fact that I refused to give in and take a loss. I "thought" I was right and the analysis was right, so I won't back down. Guess what, the market DOES NOT CARE WHETHER YOU ARE RIGHT OR WRONG. It is going to go in its own direction. Putting stop losses isn't a crutch. It seems to me as if you are expecting to win on every trade and that you don't even think you can lose. The blowout will come. You will see. Read Mark Douglas. Both books. To me this seems like bravado on your part. Wayyy too much ego. You are like the fish I play poker with online who simply don't know when to release a crappy hand and will bluff at the pot at all costs. You have to let that go. When you go into a trade, you should know that it really can go either way. Yes I would like ALL my trades to be winners, but I certainly don't expect them to.. It seems as if you do, which makes it harder to let go when they move against you, which is why you are losing 10-30% of your account on any trade. The most successful traders in the world are successful for a reason and ask any one of them and they will tell you: RISK MANAGEMENT. 30% is insane. Having stops limits the losses when the market is rampaging the other way. The second I "got that" was the second I turned things around. I am back in the game, trading with real money, and am doing extremely well. Not neccessarily because of my system, but because my risk management is significantly better than what is used to be.
3)Ultimately, how you trade is how you trade. You have your system, I have mine, and there are four million other systems on this board. People will trade how they want to. So when you read the second point, I'm simply stating my point and how I personally trade. But if you are comfortable doing what you are doing...THEN DO IT...I am simply giving my observations and opinions. I think it's a recipe for an explosion. But trade the way you like. You can "believe" in your system as much as you'd like, what matters is what the market does. Until you get that, I don't think you can achieve the next level of trading of where you would probably like to be.

THE HUN.
  • #33
  • Sep 12, 2006 8:36am Sep 12, 2006 8:36am
"If you don't believe in it enough or can't accurately determine what your risking, then maybe you should consider that your analysis needs to be improved"

Having a stop loss determines EXACTLY what you are risking. Without one you are going to waffle at those points.

THE HUN.
  • #34
  • Sep 12, 2006 12:38pm Sep 12, 2006 12:38pm
Sorry that I'm butting in but I just want to say what I feel about stop losses =\

I only use stop losses when I have to go out. Otherwise, I feel that stop losses that are entered in are quite harmful. I have often experienced my stop loss taken out by spikes and to see prices go in the direction of my trade afterward. Since those few times, I've placed a stop mentally in my head. If you have the discipline to use that stop, you're better off manually exiting a position.
  • #35
  • Sep 12, 2006 3:26pm Sep 12, 2006 3:26pm
Out of curiosity, do you trade real money?

THE HUN.
  • #36
  • Sep 12, 2006 5:08pm Sep 12, 2006 5:08pm
pros dont use stops
  • #37
  • Sep 13, 2006 1:46am Sep 13, 2006 1:46am
Yea I do.
  • #38
  • Sep 13, 2006 1:55am Sep 13, 2006 1:55am
I have the same approach to stop losses and for the same reason. All too often I have seen spikes which seem to make no sense, except possibly to clear out traders' stops. As a result, unless I am going out, need to get some sleep or am trading news, I do not use stops. I believe that using stops is asking for trouble and I would rather keep that information private. I know what my stop is, but I see no reason for my broker to know. I hate to ever have to use stops, but as I mentioned above there are circumstances when they are unavoidable.
  • #39
  • Sep 13, 2006 2:06am Sep 13, 2006 2:06am
Quoting moonchild
I have the same approach to stop losses and for the same reason. All too often I have seen spikes which seem to make no sense, except possibly to clear out traders' stops. As a result, unless I am going out, need to get some sleep or am trading news, I do not use stops. I believe that using stops is asking for trouble and I would rather keep that information private. I know what my stop is, but I see no reason for my broker to know. I hate to ever have to use stops, but as I mentioned above there are circumstances when they are unavoidable.
If you don't trust your broker with quotes why would you trust him and pay in real money? Each time my stoploss is hit and market reverses I check other platforms for minimum/maximum - if it's similar I don't make big deal out of it. If it's not similar, then I write to my broker. It happened only once in last 5 months and I was returned all the money.
Best regards,
Lucky
  • #40
  • Sep 13, 2006 2:20am Sep 13, 2006 2:20am
I rarely use them and have done well, Athough I do use mental stops...
Yes its a real account.

do what works best for you and to each his own..
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