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No SL No Leverage Strategy - working so far

  • #961
  • May 27, 2012 8:31am May 27, 2012 8:31am
*a quick aside.....could someone jump in (or PM me) and let me know how to insert the name of the poster of a quote?* Thanks!


Quote
Now we're getting to the crux of the matter.....how do you quantify it then?

I start with the a basic 3% of account and divide that into 1/8. I enter with the first 1/8 and keep the other 7 to "feed in" to the trade. Whether it's against me or going in my favor. Bob's 'recovery document' can explain the particulars. How/when the other lots get entered is rarely ever the same. It's subjective based on my interpretation of things like strength of move, nearest s/r, fibs (including extensions), etc.....

Quote
but why purposely choose a strategy which has the odds of longevity against it

As far as whatever this strategy has going against it, I think we're at the point where we'll agree to disagree forever. No?

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and is less productive

If you'll promise to pay attention this time I'll answer this. Again! It works for me.

To me, something that works is "more" productive than something that doesn't. To all you successful SL traders out there, I applaud you! Bravo! Good on you! And you'll notice I haven't tried to bash your way of trading nor have I tried to "convert" anyone to my way. I'm simply trying to explain that there is another way that people are having success with. So when this OP or someone else comes along who may be taking the worst of it, they deserve something more than The Bitches chiming in with dismissive gems such as "that's dumb", "that will never work....no, no, I've never tried it but I'm certain so-and-so is lying to you that he's making it work" Really?! That's why we're all here at FF?

Let's say you were asked to comment on a sandwich at a local deli that serves up 20 different sandwiches and you've tried, say, 7 of them. Five of which you didn't care for. But you haven't tried the one you're being asked about. Someone raises their hand and tells the asker that they have had the sandwich and thought it was very good. The Runts start chiming in saying that it couldn't possibly be good because 5 of their other sandwiches were not good, and until we get proof of a lab taste analysis from the guy who told you it was good, we simply refuse to believe it to be true. Oh, and then you would be so tickled at your response, you would add a bunch of these
  • #962
  • May 27, 2012 8:53am May 27, 2012 8:53am
Quote
The problem with really having "no stop" is that should a position lose, at no point in time will one close it, regardless how bad the loss is.

Not true, though. If we were to believe this, we need to stop believing in s/r. A trade that goes against you will find s/r and retrace. That presents the opportunity to recover. Maybe not recover all of the loss mind you, but definitely recover some capital.

Quote
the alternative is to risk such a tiny amount that should a currency pair lose 50%+ of it's value, that such a loss would not create any significant setback in ones trading account. Of course, if this is the case... it is doubtful one is making a return that would approach even 10% per year.

The tiny amount is only the entry. If the trade goes in my favor I'll add to it (maybe a nice 1-2-3 on a pullback).

Quote
Most people who trade "without a stop" actually do have a stop.... an emotionally reactive stop, that is generally terribly ineffective at actually protecting their trading capital... but they have a stop nonetheless. It's a stop for their emotions...not for their money.

I'll agree at least there's a "jumping off" point. You'll never hear me tout "100% winners" as some do. Sometimes that initial entry was destined to leave my account. We can consider this a SL, sure. But I think the heart of the matter lies with entering without a SL and thus no defined r:r upon entry.

Quote
If anyone has any hard data showing a 12 month history of successful stop-free trading, in the spot forex market, I would be very interested to see it posted. Anecdotal only goes so far... but a sample of real data, derived from trading real money, would be something I for one would like to see.

I don't know if it's still up but Bob has/had just the thing you're looking for. Even twelve months I think.
  • #963
  • May 27, 2012 9:16am May 27, 2012 9:16am
Well Randy... the fact that you do acknowledge that sometimes you take a small loss when the trade is just not working out at all in fact completely negates this whole "no stop trading" conversation. No stop is no stop. period. Margin call i suppose.

having subjective stops, or variable stops, while often ill advised, is in a completely separate category, and can possibly be involved in a viable trading approach that ends up producing a profit over time.

you know, if you traded in the futures pits, you would know that these "differing catagory of orders" is complete nonsense. If you traded futures in chicago at any time in history, or trade them via your computer on the globex or cbot or cme today.... then what most believe is a "stop loss" order is something that their platform "creates" artificially. There are only market orders, and limit orders. "stop loss" orders don't exist.

My point is, for the vast majority of trading history, there was no preset stop loss order. you simply stood around, knowing what price you will throw up your hands and scream at some guy across the pit that your gonna close your trade.

If one didn't have the discipline or resolve to plan that trade and exit as planned, well, they filed for bankruptcy and got a different job.

But a variable or mental stop, even if it allows for potential large losses on a per pip basis, can be viable depending on how risk is managed.

I personally still feel what your doing is limiting...if nothing else, but by no means "doomed to fail". Keep it up, report back here in a year... I'm sure many besides myself would like to hear the result of your journey here.

X

P.S. as far as S/R and retracing goes... I am a huge fan of this concept, however, it's the 1% of the time that retracement doesn't occur in a reasonable price move that a "no stop" strategy will fail at. If you went long the eur/usd at 1.4195 on october 28th... your still waiting for a retracement, over 1500 pips and 8 months later. Or what about the guy who went long "on the breakout" on May 4th, 2011 at the 1.4905 price. One year and 2,400 pips later, and he's still waiting too. And 99% of trades won't be so poorly taken... but a true "no stop" strategy, given enough time will end up having at least ONE of those terrible trades... and for that trader, it will be the first and possibly only losing trade they can ever afford to take.
  • #964
  • May 27, 2012 9:39am May 27, 2012 9:39am
Quote
Well Randy... the fact that you do acknowledge that sometimes you take a small loss when the trade is just not working out at all in fact completely negates this whole "no stop trading" conversation. No stop is no stop. period. Margin call i suppose.

Your point here does not negate the conversation.

A trader who enters a position with a hard stop loses that amount should the trade go against him the amount of his stop. I don't enter with a hard stop because I anticipate price will retrace at some point (again...not return to my entry. It may never do that and I don't need it to), allowing me to recover and possibly even return back to my entry (no loss) or continue in my favor (profit!). The hard SL user, that has a stop triggered, never has this opportunity. Heck, the amount I enter upon my recovery point may go into profit enough to eradicate my entry loss (remember, my entry is small). A second possibility at profit! Or, to zero out a loss without price returning to my entry point! You don't give yourself these opportunities with a stopped-out trade.

Quote
If you went long the eur/usd at 1.4195 on october 28th... your still waiting for a retracement, over 1500 pips and 8 months later. Or what about the guy who went long "on the breakout" on May 4th, 2011 at the 1.4905 price. One year and 2,400 pips later, and he's still waiting too.

After the Oct. 28th entry, price retraced 50% from mid January to late February. Easy recovery opportunity. After the May 4th entry, price retraced roughly 70% a mere month later. Even better recovery opportunity.
  • #965
  • May 27, 2012 10:05am May 27, 2012 10:05am
Randy... maybe you didn't catch the part of my response where I acknowledge that such an approach, while unorthodox and one I feel is ultimately limiting, can nevertheless be effective...

in this statement, the implication was that I do agree with your point that what you are doing can be successful.

but make no mistake about it... it is not the same as trading "without a stop".

It is trading with a variable stop, that sometimes (maybe even often) creates situations that would skew the risk:reward ratio well into the realm of "risking a pound to make a penny"... but I fully acknowledge that one could generate a profit using this strategy.

I don't want to denegrate this thread into an argument of semantics, or otherwise take it off topic... but maybe a real example of a story I came across will better exemplify what "trading without a stop" looks like.

I heard on the radio a story about an elderly woman who was retired and worth a 7 figure sum due to her wise investments in General Motors corporate bonds.

In 2008-9, when GM was in a world of hurt, and looming on the brink of bankruptcy, rather than reduce her position, or cut her losses (as the bonds were devalued due to questions of solvency and continual rating agency downgrades), she wasn't to be swayed in her faith that GM would pull through.

Then, GM did the unthinkable, and filed for bankruptcy.

In one fell swoop, her entire life savings and financial stability was reduced to the point where it wouldn't buy her a meal at the buffet, nevermind anything of real value.

Now, THAT, right there, is "trading without a stop".
your trading with a variable stop, and occassionally accepting trades that risk a great deal more than they will likely ever make. Fine... it's still not trading without a stop, and when you explained this, I immediately agreed that it is possible to generate an edge with such an approach.

And as far as retracement goes... while reducing ones loss from what it could have been...the mere fact you close a position that is losing shows you do have a situational/variable/psychological stop of some sort, and that if you (or anyone) were to wait for all trades to retrace to break even over the course of a trading career...it would only take one very poorly placed trade to have that person and GM lady in the government assistance line together.

X
  • #966
  • May 27, 2012 2:04pm May 27, 2012 2:04pm
Nor do I want to debate semantics. All I know is that when this strategy is discussed, the naysayers come out en masse and start shouting about how trading without a SL is dangerous.

It's like when 'mutt told me what I'm doing is not trading. That's more than fine with me....I'm not a trader. I'm only concerned about showing a profit and "trading" in this manner is what I've grown comfortable with. My title and the title of this strategy are secondary.
  • #967
  • May 27, 2012 6:24pm May 27, 2012 6:24pm
Quoting forextraderx
Randy... maybe you didn't catch the part of my response where I acknowledge that such an approach, while unorthodox and one I feel is ultimately limiting, can nevertheless be effective...

in this statement, the implication was that I do agree with your point that what you are doing can be successful.

but make no mistake about it... it is not the same as trading "without a stop".

It is trading with a variable stop, that sometimes (maybe even often) creates situations that would skew the risk:reward ratio well into the realm of "risking a pound...
That is also called putting all your eggs in one basket. I trade 20+ currencies, so if one goes bankrupt the rest will keep earning money. Spreading your risk is also a very traditional way of handling an investment.

Here is a pic of the eur/jpy. It has had 6 major trend direction changes and one range area in the last 1.5 years. These trends will last weeks or even months at a time. If it is above the line you buy if it is below Sell. Every trade except the last one will become profitable but that one can be minimal if you also stay above the weekly open on buys and below the weekly open on sells. All you need to know is what will make it change direction or watch if price crosses the line. As long as you are above or below the line, you dont need a SL. You just wait patiently for the trade to go into profit and take the ride. It makes the whole trading process simple and basically easy to do. Low leverage and low lot size can make almost anyone a profitable trader. That is why I have such a large following. I have made it simple, easy to do, and profitable. Just have to close out the trade that is going to go the wrong way. Once you master that you can always be a successful Forex trader. I dont have to sit all day and watch a screen either. Just follow PA in the direction it is going for the week. Anyway off to work. The red arrows tell the story.

Oh did I tell you my win ratio for last week was just under 80% but of course I have no edge. LOL you guys are funny.
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  • #968
  • May 27, 2012 6:54pm May 27, 2012 6:54pm
Quoting nanningbob
That is also called putting all your eggs in one basket. I trade 20+ currencies, so if one goes bankrupt the rest will keep earning money. Spreading your risk is also a very traditional way of handling an investment.

Here is a pic of the eur/jpy. It has had 6 major trend direction changes and one range area in the last 1.5 years. These trends will last weeks or even months at a time. If it is above the line you buy if it is below Sell. Every trade except the last one will become profitable but that one can be minimal if you also stay above the...
First off, claiming an 80% win rate doesn't do anything to support or negate whether you have an edge or not. I can show you a system that has a 98% win rate... but i'll tell you upfront that it'll cost you a lot of money over time.

And I'm not sure who "you guys" are, or why you quoted my post exactly...

In fact, I'm pretty sure that this is a 3 way conversation with each person not even really discussing what the other one is.

I was inferring that trading without a stop, without any stop, is not a responsible way to trade, and I believe in almost all cases leaves open a door to invite unnecessary loss in, and can often jeapordize one's trading career.

Turns out Randy does have some situations in which he will close a trade out that is going against him, for a very small loss (per his very small risk amounts) So, in fact he does have a stop...it just isn't preset.

Neither of us were dicussing win rates, or methodology, and I said nothing about a methodology, working, not working or otherwise.

And by the way, I completely agree with you regarding longer term time frame trendline breaks.

I help my brother manage some of his money using weekly and monthly charts, while considering supply and demand zones for potential entry points/targets, and trendline breaks for signals to get in.

We still use stops however... and after just a few months, the win rate is quite high (not sure off the top of my head, but there have only been a few trades anyway)

I guess I am glad your doing well with your approach... my brother is doing well with a similar approach that I've showed him. That was never the debate.

I am right now showing him how to move down to a daily chart, and take an entry to the market if the market moves back to the trendline. It's too early to say what the results will be, but risking 1% with a 40-50 pip stop as a daily candle touches a trendline that the weekly/monthly is currently riding up, and targeting 200-500 pips can provide some outstanding returns... particularly if that daily candle pulls back 3 or 4 times early on in the trend before reaching an opposing weekly/monthly supply or demand zone.

Anyway Bob... not really sure where your coming from with this or why exactly you quoted my post... maybe it's just a misunderstanding on my part. If i'm missing something, please let me know so I can properly address your point.

X
  • #969
  • Edited 8:46pm May 27, 2012 8:04pm | Edited 8:46pm
I answered your statements in blue and in red. ???? You stay within the parameters I said in my post and you will have success. Dont see any difficulty with that and also why your assumptions that disaster is just waiting down the road, when I clearly showed it is not. The reason my win rate is so high is very simple. Just follow the weekly trend. Get that and you will be a successful trader. That is an edge whether you admit it or not. And yes 80% win rate is doable and successful. You just have to trade high enough charts to see what price is really doing over the next several weeks and months. Trade small, trade smart, be successful. Dont let the so called professionals brow beat you into doing something else.

I heard on the radio a story about an elderly woman who was retired and worth a 7 figure sum due to her wise investments in General Motors corporate bonds.

In 2008-9, when GM was in a world of hurt, and looming on the brink of bankruptcy, rather than reduce her position, or cut her losses (as the bonds were devalued due to questions of solvency and continual rating agency downgrades), she wasn't to be swayed in her faith that GM would pull through.

Then, GM did the unthinkable, and filed for bankruptcy.

In one fell swoop, her entire life savings and financial stability was reduced to the point where it wouldn't buy her a meal at the buffet, nevermind anything of real value.

Now, THAT, right there, is "trading without a stop".

I was inferring that trading without a stop, without any stop, is not a responsible way to trade, and I believe in almost all cases leaves open a door to invite unnecessary loss in, and can often jeapordize one's trading career.

It is an example of how you can trade without a SL, be profitable, and knowing when the run is over and get out. Getting out is the SL point. Didnt think you would be that touchy. Sorry.
  • #970
  • May 27, 2012 8:48pm May 27, 2012 8:48pm
Quoting nanningbob
I answered your statements in blue and in red. ???? You stay within the parameters I said in my post and you will have success. Dont see any difficulty with that and also why your assumptions that disaster is just waiting down the road, when I clearly showed it is not. The reason my win rate is so high is very simple. Just follow the weekly trend. Get that and you will be a successful trader. That is an edge whether you admit it or not. And yes 80% win rate is doable and successful. You just have to trade high enough charts to see what price is...
Man... I knew there was a reason why I didn't register on this form for such a long time... and after 2 days, I remember why.

Bob, did you even read my posts? or did you just give me some sort of "form letter" response...? I'm actually kinda wondering, because I'm going to clarify, line by line, the communication here as I see it. If it still feels after this that we are just not even talking about the same subjects...then we'll have to agree to not understand each other, and maybe we an try again in a slightly different arena sometime in the future...

Quote
I answered your statements in blue and in red. ????

I don't see any blue and red. If you attached an image, forgive me, because FF site is not loading for me as it should, and I can see no avatars or images from almost anyone (already contacted them about it... we'll see)

Quote
You stay within the parameters I said in my post and you will have success. Dont see any difficulty with that and also why your assumptions that disaster is just waiting down the road, when I clearly showed it is not.

I already have success...been full time for a couple years now. also, your putting more emphasis on disaster than I intended. I believe trading without a stop is limiting (and I still do), and I believe eventual disaster is likely for most, given enough time. But I never once stated "dude, this is just a career crusher waiting for the other shoe to drop". Furthermore, I'm not even sure what post your talking about (the first one to me? some other post somewhere in the thread?)

Quote
The reason my win rate is so high is very simple. Just follow the weekly trend. Get that and you will be a successful trader. That is an edge whether you admit it or not.

Ok...now I KNOW you didn't read what I wrote....because I spent over a paragraph going into detail on how I am helping my brother learn to invest and trade, and am using supply/demand zones on weekly/monthly chats combined with TL breaks, and the success so far is great. We do use stops mind you...but rather than state whatever you are doing is not working... I believe my bro and I do something very similar...and so far, so good.

Quote
And yes 80% win rate is doable and successful.

No doubt man, but it's also possible on the 5 minute charts. Check my trade explorer...i know it's new (as am I here), but it shows last week, up 9%, using stops, with over an 80% win rate, and approx 47 closed trades.
I know 1 week doesn't really mean a hill of beans...and it's a good week for me, I'm usually lower than 82%... but, as I said, I do this full time and have for a while.

Quote
Trade small, trade smart, be successful. Dont let the so called professionals brow beat you into doing something else.
Totally agreed, but as for the professionals browbeating... the only professional that browbeats me is myself. In fact, my burning desire to eliminate my own inconsistent results (I can make money every week for 2-3 months, only to make nothing or lose half of it back for the following 8 weeks...etc.)

I had a rock solid 2011, and suddenly this year old habits are back. I'm up for the year in my primary account, but it's a far cry short of what I can do. And starting a public journal here is one tool I am using to find and plug "leaks" in my game.

Anyway... ya. so, either you didn't read my posts, or i didn't get a very important image attachement. At any rate... feel free to respond here, and please correct me if I am somehow even more confused than I currently believe myself to be.

X
  • #971
  • May 27, 2012 8:53pm May 27, 2012 8:53pm
Bob...I see the blue and red now... sorry, we really are crossing wires here. posts arn't loading properly in some cases for me, and the grapics and attachements are a complete clusterf*** on my end.

I think we pretty much agree here tho... and I'll post it. just wanted to PM you before we create some sort of conflictual situation over a forexfactory technical issue (at least primarily)

X
  • #972
  • May 27, 2012 9:12pm May 27, 2012 9:12pm
Quoting forextraderx
Bob...I see the blue and red now... sorry, we really are crossing wires here. posts arn't loading properly in some cases for me, and the grapics and attachements are a complete clusterf*** on my end.

I think we pretty much agree here tho... and I'll post it. just wanted to PM you before we create some sort of conflictual situation over a forexfactory technical issue (at least primarily)

X
I have no problem with you or your examples, just gave an example how you can trade without fear and trade without a SL. Just stay on the correct side of the line and you wont have any problems. It can be simple and profitable. Buy and hold strategies can work in Forex also.
  • #973
  • May 28, 2012 1:31am May 28, 2012 1:31am
lol, well after all the back and forth it turns out that no-one here is actually trading without a stop loss after all, classic!

Performance is the measure of how successful a strategy is......
  • #974
  • May 28, 2012 2:03am May 28, 2012 2:03am
Why don't you just trade how you want and stop arguing about stops... you shouldn't have to prove a system to anyone just trade it for fucks sake. That being said +rep to nanningbob his system has made me some cash but i don't trade it anymore
  • #975
  • May 28, 2012 2:11am May 28, 2012 2:11am
Quoting RBlackburn

That being said +rep to nanningbob his system has made me some cash but i don't trade it anymore
Why not?
  • #976
  • May 28, 2012 2:11am May 28, 2012 2:11am
Quoting RandyG67
I start with the a basic 3% of account and divide that into 1/8. I enter with the first 1/8 and keep the other 7 to "feed in" to the trade. Whether it's against me or going in my favor. Bob's 'recovery document' can explain the particulars. How/when the other lots get entered is rarely ever the same. It's subjective based on my interpretation of things like strength of move, nearest s/r, fibs (including extensions), etc.....

The tiny amount is only the entry. If the trade goes in my favor I'll add to it

I'll agree at least there's a "jumping off" point.......We can consider this a SL, sure.
Finally!

Ok not so revolutionary and not as bad as I thought, at least you're adding to winners as well, and using a stop loss. The whole thing isn't actually a million miles away from more traditional methods of trade and risk management albeit slightly convoluted and dare I say it less productive!


Quoting RandyG67

To me, something that works is "more" productive than something that doesn't.
Right, so now it's only a matter of how successful someone aspires to be, some people are happy for a while just not to be losing any more. Who knows, six or twelve months on from here once that novelty has worn off you'll tighten the whole thing up and be doing pretty much the same as any other consistently profitable trader who takes advantage of the benefits offered by this market.....or maybe not, I guess only time will tell.....
  • #977
  • May 28, 2012 2:34am May 28, 2012 2:34am
Quoting pipmutt
Why not?
Yeah i'm not sure, i think i get bored during the day and need a more hands on approach... I'm mainly just price action
  • #978
  • May 28, 2012 2:58am May 28, 2012 2:58am
A passenger train leaves Rome for Paris traveling at the speed of 80 km/hr. In half an hour a freight train leaves Paris for Rome traveling at the speed of 60 km/hr. Which train will be further from Paris when they meet?
  • #979
  • May 28, 2012 3:45am May 28, 2012 3:45am
Quoting 2+2=4ex

A passenger train leaves Rome for Paris traveling at the speed of 80 km/hr. In half an hour a freight train leaves Paris for Rome traveling at the speed of 60 km/hr. Which train will be further from Paris when they meet?
No idea but has either of them got a buffet car that sells those little chocolate muffin things with the choc sprinkles on, I like those......
  • #980
  • May 28, 2012 3:48am May 28, 2012 3:48am
Quoting 2+2=4ex
A passenger train leaves Rome for Paris traveling at the speed of 80 km/hr. In half an hour a freight train leaves Paris for Rome traveling at the speed of 60 km/hr. Which train will be further from Paris when they meet?
I like that one, might give that to my students one day, I could include it in a Point of No Return calculation,, mind you I wouldn't be to popular after they have sussed it out.

M.
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