Aussie Trading Room and Cartoons Gallery

I had 2 LONG trades, one of them had a SL which triggered overnight and the other one I closed manually. No big deal I took a small loss and moved on ;-)

that's the reason i dont use sl....everytime i use it, it triggers. my view is that i have a target and i believe that if it doesnt go my way i can always close it manually....my entry is mostly too early and with sl i usually get triggered so ive learned not to use it....this is just me

Yes me too.

Re the currency, here in Beijing the Chinese don't use the word Yuan very much. (I hear it more often to describe the ring roads, e.g. san yuan lu, third ring road.) More often I hear Renminbi or kuai. But they definitely write ¥ for yuan. I will ask my Chinese friends the origin.

Kuai is a classifier for money. In Chinese grammar they have classifiers.

like... 我有三十塊錢.

stop and reverse (long)

What is that? a snake??

Here are my views of stop loss

I) By placing stop loss, risk is identified before a trade is taken, a trader knows and understands how much he can afford to lose without getting emotional and irrational for his next subsequent trades entries. Risk management is the most important of any portfolio/account management.

A trader cannot decide how much he can win, the market moves the way it wants, but a trader can limit his losses per day/week/month/time, so that he can move on into a new trade idea.

II) By placing stop loss, the trader can avoid BREAKOUT scenario, a breakout scenario is usually when price hits and move along a certain direction in a very strong trend where RSI crosses 70 and 80 or 30 and 20, and continue to propel on a single direction, and price may not even return to resistance turns support or support turns resistance in near terms in matters or day due to strong fundamental events or steriod.

Breakout often leads account to margin call/stop out most of the times, and the damage is far more than expected in most of the time, take recent EUR/USD breakout a month plus ago from 1.24 into 1.30. If anyone recall it from 1.24 then 1.2650 then 1.2750 then 1.2880 then 1.2940 into 1.31.

III) similar as above, by not placing stop loss, a retail trader is often or not , not a trained hedge trader , does not know accounts management = multiple account trading-> some buy some sell at different entries and stop loss, risk profile into low, middle, high, scalping range and long term etc,, nor does forex options trading for hedging purposes.

Often or not the retail trader will either commit collapsed trading, opening new entries on subsequent price level in the same direction, the real danger would be accompanied with martingale method of increasing lot size at subsequent level, it won't be as bad if the trader can make good grid entries on at least 100-200 pips away on subsequent entries compared to one who does a new entry on few pips away or 20-50 pips away.

Accumulation of red pips in a direction will lead to margin call and account blow even faster.

Its only lucky if the trader is trading within a range bound of M or W in a fibo of 23.6 to 61.8 range, once a breakout across 61.8 and trader made his entry against the flow from 0 to 23.6 and subsequent levels of 50 and 61.8, hes leading his account to be blown even faster.

Trader can be emotional and berserk and loses his cool and decisive thinking/planning/trade plan

IV) A trader may open too many positions in the same account of both long and shorts, resulting in indecisiveness to close which order first, and often or not its likely to be overall negative than positive reading.

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By having stop loss, a trader is not married to a trade, he's neither bullish or bearish bias, but trade accordingly to plan and price, he get out if he is wrong earlier, and minimize his losses and risks, cutting losers shorts.

By having stop loss, if a trader is wrong and did not have a good trading day/week, can re-plan before he enters the market again with the remaining % of his account to fight another day.

A trader must learn to keep his losses small, and ride on his profit, it's ok and alright if a trader keep hitting stop loss, which means the trader must learn to identify even better and sharper entries.

He lacks the skills/knowledge/technique should continue to explore or learn instead of jumping into the market as a Centenarian person who buys a particular shares and hope to see its value rise back one day. But the saying goes, the stronger get stronger, the weaker get weaker, a old thinking trader does not admit he is wrong and until it get extinct. As mentioned, it's in the pattern, if a trader is lucky to trade withing a M or W, if hes red and wrong, he can wait for his position to be break even or green if he has the leverage and patience to do so and it has to be in certain pairs only.

The chances of a trader not using a stop loss is the same as gambling on a direction, but if he keep changing sides and take mere pips from the market through scalping with a poor R R and lack of sniping techniques, his overall losses will be greater than his small fishes that he had farmed.

The trader must respect the rule and high probability of resistance turns support, support turns resistance when the market goes against him and retrace back to former support/resistance near point, he must cut losses at that point given a chance, or be blow away by breakout again.

But it only takes a single breakout to clear the trader's account.

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Price have the tendency to move up and down, it fluctuates in all different time frame and have either bullish/bearish patterns or side way in different timezone and volatility.

Asian, europe and US session all has different volatility, it's important to use stop loss in high volatility or stay out of trade to only use buy sell stops with tight stop. As buy sell stops position often occurs in strong trend of breakout, and unlikely to be against the trend, and it also has to be depend on fundamental aspects and session volatility.

Retailer must learn risk management and account protection, to prevent becoming a prey in this market.

A trader can be wrong 7 times on a mere stops of 10 pips, but once he rides on profits of 3x80 or even 3x50, he already compensate for his earlier losses.

Not marrying a trade
Ride on profits
keep losses small

3 basic rules to dominate.

Learn to snipe instead of spam like machine gun

Very nice view of using stop-loss, with valid points that are true but not universal, the only universal use of a stop-loss for me would be to avoid those breakout moments you mentioned, else for a seasoned trader not taking random positions, a stop- loss spoils the fun [damn spikes]. for me stop-loss points should be used to protect profits not stop losses. Everything else you mentioned boils down to trader discipline, based on his/her system of trading.

FUDGE

Paul you are in China. Please provide firsthand China information for this forum.

This is a must read SL discussion. Good job, 5percent.

A Doji is forming at the daily UDTL. This implies a fall is in the cards. But, I wouldn't think it will go too far before heading north again. IMO

I am in China too.. But which China are you talking about. In the world there are two China(s). The PRC and the ROC. lol

When people outside Taiwan talking about China, they mean Red China not KMT ROC. Nobody calls Taiwan "China".

BTW, Paul is in Beijing, China.

Well, historically Taiwan isn't a part of China, when the R.O.C. government fled to Taiwan they set up their government here. And the name of the island from hundreds of years ago was called Pakan.. it also, had the nick name formosa from the Portugese.

Also, on all official government documents here, it has the Republic of China. but the People's Republic of China doesn't like that.

Kind of like two Korea(s).

But in this case.. One democratic China and one Communist China.

Also, the KMT is the name of a political party. There are a few political parties on the island nowadays.

One more thing. In the R.O.C. we still use traditional Chinese characters, as in commie China they used the simplified once that have lost the culture and grammatical meanings. I do hear that they want to go back to traditional writting so they can read the older traditional books and history, etc

I assume your chart is a daily close line. Could you post your insight?

The Aussie is heading toward sub-1.02 again. Some people may call recent PA range-bound. I'd call this a bullish consolidation.

Competely agree. When I first saw the daily chart today, might first thought was bear flag... Besides, studying the past, when there is a true reversal out of a bear market, there is very rarely any range period. It just shoots up. The lack of this kind of behavior makes me think the bears will be taking over even more.

But, My view is after this down trip, the Aussie will move up again.