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Trading Without a StopLoss

  • #81
  • Apr 12, 2013 5:34am Apr 12, 2013 5:34am
Quoting Zokynho
Trading with no stop means that you don't know what the market is doing and simply hope that it will turn into a profit. Mike your post i good and you probably have success with stop loss but i disagree with this sentence.... Nobody know what will market do next,there are only higher probability, knowledge and experience with speculate where the market will go and how to be prepared for that. sorry for my english isn't the best Regards!
Here you say that trading without a SL is simply trading on hope, yet in your previous post you state that you trade without a SL
You are trading on hope.
Please Do Not PM Me With Coding Enquiries
  • #82
  • Apr 12, 2013 5:35am Apr 12, 2013 5:35am
Quoting Pipocrates
its a hell of a system
Show us then...put up or shut up.

Quoting Pipocrates
conventional wisdom leads to conventional results in forex conventional results are losers
Prove it...talk is cheap

Quoting Pipocrates
i be done mon
Not yet....mister margin call will decide that for you
Doing what you like is Freedom. Liking what you do is Happiness.
  • #83
  • Apr 12, 2013 5:35am Apr 12, 2013 5:35am
Quoting Zokynho
Trading with no stop means that you don't know what the market is doing and simply hope that it will turn into a profit. Mike your post i good and you probably have success with stop loss but i disagree with this sentence.... Nobody know what will market do next,there are only higher probability, knowledge and experience with speculate where the market will go and how to be prepared for that. sorry for my english isn't the best Regards!
Not really. When you're the master, your SL will rarely hit so there will be times you won't use SL for some trades.

However, any intermidiate or lower level traders MUST use SL. Newbies cannot even use SL, because they move SL more and more. I went through all of this. So, the evolution is like this:

 

  1. Newbie: Set SL -> Move SL to bigger range -> Keep moving -> End up with bigger loss or magin call. Which is basically the same with trading without SL, but in negative way.
  2. Begginer & Intermidate: Set SL -> Does not move SL -> SL hit rate is average.
  3. Professional: Set SL -> Does not move SL -> SL hit rate is very low -> Sometimes it's too low, so trading without SL, but in positive way.

back... and more dangerous.
  • #84
  • Apr 12, 2013 5:36am Apr 12, 2013 5:36am
Quoting Gumrai
If anybody wonders why some of us defend the use of a stoploss, it is because we have suffered the traumatic experiences that inevitably happen when you don't use one. We know that newbie traders will read this thread and we do not want them to suffer the same way that we have. Most traders that do not use a SL are delusional, in denial, are unable to accept a loss or worse, think that they know better than the market. The market is always right and unless you are able to accept that you are wrong when persisting with a losing position, the market...
Hey Gumrai,

for newbies i would always reccomend to use stop loss without exceptions,but for traders that have more experience and having hard time with stop losses,feel better with no accepting loss that easy, why not use different aproaches to the market and try some different things.
This doesn't mean that they think that they better than the market (nobody know better them market) but adopt to market without SL can be easier from psihologicall aspect,and then situation is changing you are the winner agains market

Regards!
  • #85
  • Apr 12, 2013 5:45am Apr 12, 2013 5:45am
Quoting realjumper
.... Brokers cannot move the market 40 pips just to get a few retail SL's....that's just crap and a p......
I don't think you understand how it works. Brokers can take out stops, not by moving the price, but by temporally increasing the spread.

So if you have a long position with a hard stop, they don't need to take the ask below the stop level, they just bring the bid down by widening the spread. It wont cost them anything.

It does happen, and several brokers have been busted doing it.

Anyway, the point is if you're watching your trade closely, just use a Mental Stop instead of a Hard Stop and exit at market if the trade fails. That's what many big traders do.

I'd only use hard stop if I wasn't able to watch an open position.
  • #86
  • Apr 12, 2013 5:51am Apr 12, 2013 5:51am
Quoting SM02
I don't think you understand how it works. Brokers can take out stops, not by moving the price, but by temporally increasing the spread. So if you have a long position with a hard stop, they don't need to take the ask below the stop level, they just bring the bid down by widening the spread. It wont cost them anything. It does happen, and several brokers have been busted doing it. Anyway, the point is if you're watching your trade closely, just use a Mental Stop instead of a Hard Stop and exit at market if the trade fails. That's what many big traders...
No...I understand it very well. A broker cannot widen the spread 30 or 40 pips.....get real!!!!
Doing what you like is Freedom. Liking what you do is Happiness.
  • #87
  • Apr 12, 2013 6:03am Apr 12, 2013 6:03am
Quoting realjumper
I can see where you're coming from, but it still comes down to a few basics. 1. Know what a SL is there for. It's not there to be placed at a position that you would like to lose, if need be. I mean, no one likes to lose. Ok, 10 pips is not a big deal, so I'll place my SL there shall I? Guess what? It WILL get hit most of the time. The SL is there for an emergency. To protect your account from serious damage in the even of a major event.....and there has been, and will be many. That doesn't mean to say that you sit there like a muppet watching the...
I agree what you said here,this comes with experience and knowledge,you are really good trader but i was trying to say that instead of a emergency stop loss i am using different tehnique to sort out loss out then just blindly accepting stop loss (i use partial hedge positions,add to positions later or recovery trade,depends on market situation and my analyses)

I just don't like SL but that doesn't mean that i will leave loss till margin call and hoping that trade will come in my favor off course...I also accept lossess sometimes but not before asking myself first:"what can i do to resolve situation and prepare next plan what to do"

I was triyng to said that i know myself and how i funtioning,so many times after waiting chance all day my SL hit by pips or two and goes in my favor i am frustrated and my discipline patiente isn't good and sometimes trying to revenge the market,but with what i do it is stress free i am relax and can continue to make quality decidions...but for this need to have knowledge of market

Maybe to you sound stupid but functioning for me and i am happy with it...

Regards!
  • #88
  • Apr 12, 2013 6:10am Apr 12, 2013 6:10am
Quoting Zokynho
I agree what you said here,this comes with experience and knowledge,you are really good trader but i was trying to say that instead of a emergency stop loss i am using different tehnique to sort out loss out then just blindly accepting stop loss (i use partial hedge positions,add to positions later or recovery trade,depends on market situation and my analyses) I just don't like SL but that doesn't mean that i will leave loss till margin call and hoping that trade will come in my favor off course...I also accept lossess sometimes but not before asking...
As long as you're happy, and you accept the risks of what you're doing, then it's all good
Doing what you like is Freedom. Liking what you do is Happiness.
  • #89
  • Apr 12, 2013 6:14am Apr 12, 2013 6:14am
Quoting Gumrai
Here you say that trading without a SL is simply trading on hope, yet in your previous post you state that you trade without a SL You are trading on hope.

No Gumrai,i am not trading on hope , i am trading logical with techical+fundamental analyses and good risk management!!
If i trade on hope,i would be in sanitary with this kind of job,i trade free stres with quality plans how to deal with market and situations!

Regards!
  • #90
  • Apr 12, 2013 6:17am Apr 12, 2013 6:17am
Quoting realjumper
As long as you're happy, and you accept the risks of what you're doing, then it's all good
yes agree.it is all about finding your comfort and be happy doing it!

Let's take some money from banks!


Regards!
  • #91
  • Apr 12, 2013 6:23am Apr 12, 2013 6:23am
There is nothing wrong with 'trading' without a stop - the confusion here is in the sentence itself.

Theres a difference between trading and investing.

If i where to check the current price for E/U and walk down to my local exchange i could buy X euros and give them my dollars -- cash.

No stops, no margin calls, no leverage, no nothing. Thats it.

Of course, the market will continue to fluctuate against my purchase price, except i cannot get margin called.

As value gets cheaper i can repeat and continue to purchase more euros...essentially averaging into a position.

The problem incurred here when applied to brokers is that it is a margin account and hence its value fluctuates, which could indicate a margin call.

Thats the difference. Trading vs. Investing.
  • #92
  • Apr 12, 2013 6:24am Apr 12, 2013 6:24am
Quoting Zokynho
I trade over 1 year without SL with success, and not saying that this is right thing to do,but if you not using SL you need to have plan few steps ahead. Ask yourself: "if goes in my directions,what to do or if goes agains me what will i do to protect myself...." Learn and read more about adding to position,hedge when need to,made beetwen,about recovery trading and different money management tehnique....In forex is all about risk,why accept loss if you believe in system and your analyses + good money management (very important).... PA cannot go...
The problem of stoploss is that it puts a trader in bondage. I do rotational hedging, with Position hedging to protect my equity in case the maket turns wide. I trade without fear of losses and this is helping me to make more pips.
  • #93
  • Apr 12, 2013 6:29am Apr 12, 2013 6:29am
Quoting dare123
The problem of stoploss is that it puts a trader in bondage.
It does not.
Doing what you like is Freedom. Liking what you do is Happiness.
  • #94
  • Apr 12, 2013 6:38am Apr 12, 2013 6:38am
I agree with both of you Realjumper and Dare,there is no right or wrong in this bussiness,it is what functioning for every trader itself!
I know traders who are really good with SL (cannot be in peace,cannot sleep,have nervous if don't put it),and know people who hate SL and frustrating when SL got hit missing good next oportunities and lose more than!

It is all about where you find yourself,but for newbies i would ALWAYS recommend SL.

regards!
  • #95
  • Apr 12, 2013 6:44am Apr 12, 2013 6:44am
Quoting Zokynho
Hey Gumrai, for newbies i would always reccomend to use stop loss without exceptions,but for traders that have more experience and having hard time with stop losses,feel better with no accepting loss that easy, why not use different aproaches to the market and try some different things. This doesn't mean that they think that they better than the market (nobody know better them market) but adopt to market without SL can be easier from psihologicall aspect,and then situation is changing you are the winner agains market Regards!
Here you show your inexperience.
You cannot win or lose against the market. The market is simply a go-between bulls and bears. The market doesn't care, it simply brokers between those who wish to buy and those who wish to sell. It pockets spreads and commisions and that is all it cares about. The market has no personality.
The aim of the trader is to be synchronised with the market moves, trading in line with current sentiment.
You don't win or lose against the market, you simply have losing or winning trades. The market is always right.
Please Do Not PM Me With Coding Enquiries
  • #96
  • Apr 12, 2013 6:45am Apr 12, 2013 6:45am
Quoting dare123
Why is Trading Without Stoploss categorised as anti trading?
I am not sure how many traders will tell you this, but trading is 20% winning and 80% protecting
your cash and without a stop loss, you are utilizing only 20% of your artillery.

danny
  • #97
  • Apr 12, 2013 7:07am Apr 12, 2013 7:07am
Quoting Gumrai
Here you show your inexperience. You cannot win or lose against the market. The market is simply a go-between bulls and bears. The market doesn't care, it simply brokers between those who wish to buy and those who wish to sell. It pockets spreads and commisions and that is all it cares about. The market has no personality. The aim of the trader is to be synchronised with the market moves, trading in line with current sentiment. You don't win or lose against the market, you simply have losing or winning trades. The market is always right.
OMG!

It was allegorical meaning Gumrai...of course no one cannot beat market in your way of sense,(all of us are market, our psihology and our money),i was thinking that i feel like a winner when i have winning trade and making from it....

I am looking on trading like on battles! Every profit trade is my win agains market! But war will never end and no one cant win at the end of it,just be winner and make money or looser and lose money!

Regards!
  • #98
  • Apr 12, 2013 7:32am Apr 12, 2013 7:32am
Stoploss or not stoploss ? that's always the question.

I personally do not use fixed stoploss, instead i use a large and hidden managed by an EA . (large SL and large TP of course)

in this manner if sl is hit we did not feel that a broker or any other "antity" are playing stoploss hunting
  • #99
  • Apr 12, 2013 7:37am Apr 12, 2013 7:37am
Quoting billytt
hello markot,, each to their own,, trading should be simple,, i like the way ernie chan says (several times) he used to work here. he used to work there , he used to work somewhere else. i cannot remember if he said or perhaps einstein said keep it simple not simpler.. quantitive trading in my view should be used by people using other peoples money, it just isnt necassary... keep it simple.. i can see how the tabls hopee are trying to be turned with maths and algorhytms hopefully bringing arbritrage into play but jeez there are easy ways to trade,,,...
Hello billytt.

I do agree that trading should be simple, that is my trading style of course. Hpwever, we are talking about stop loss and i do like what Ernie has to say about it. Regardless of what strategy u/we use, Ernie sayes that Stop loss should be used to protect u from Black Swan event , and u should give enough room for ur position not to be ruined by tight Stop Loss. Therefore, if u backtest ur strategy and backtest showed that u have never experienced 20% DD it doesn't mean tht u wouln't in future.Placing stop loss is right thing to do, but only if it doesn't interfier with ur performance. Also, he mentioned that Stop loss can be used in FX and Futures, but are not succesfull in stock markets ( problem with liquidity).


On the other hand, if ur stop loss is being hit regulary and then reverse, u may use this valuable info (as someone already mentioned), to re-enter position. After all, in real life u are paying for good information - doesnt sound right not to act upon that aquired information.
  • #100
  • Apr 12, 2013 7:53am Apr 12, 2013 7:53am
Many people trade without SL because they think they'll make more money - because they're not taking losses. But the opposite may be true - they may make more money if they have a SL.

Clearly, the purpose of trading without SL is to not get stopped out. But, of course, with or without SL, many winning trades go in to drawdown before they become winners. We just don't know how far they'll go in to drawdown.

If you trade without SL and use high leverage you may be lucky for a while, but your account will blow up sooner rather than later.

So, if you trade without SL, the only practical, sensible approach is to trade with very low leverage. If a trade goes negative your account can cope with a big drawdown. Your win rate will be immense (presumably up to 100%), but your financial returns will be relatively low (because you're protecting your account by trading low $ per pip). And you may find yourself out of the game for a long time while you wait for your trade to reverse and eventually become a winner.

Compare this with the alternative.

Trade with a SL, risk (say) 2% of your account per trade, which will result in a higher $ per pip. You'll lose some trades, and you'll lose some money. But your returns on winners will be higher because of the higher $ per pip.

I imagine there are 2 types of traders who trade without SL:
1. Newbies; and
2. Experienced traders who:

  1. Trade with rock solid confidence using mental stops and who are comfortable closing a losing trade when they see the market has moved against them: or

  1. Use a hedging strategy, whether formal or informal.


The newbies above will either blow their account or change their trading style quickly.

Ultimately, we all have to find our own psychological comfort zone and trade within that. Some will prefer a high win rate and accept the risk of trading without SL, while potentially accumulating slower returns. Others can accept losing trades and the potential for higher returns.

If anyone has done a study of trading both styles I'll be interested to hear their conclusions.

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