Do you believe fixed stop-losses cause losses in the long run? | Forex Factory

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Do you believe fixed stop-losses cause losses in the long run?

  • #1
  • First Post: Jul 27, 2013 12:03am Jul 27, 2013 12:03am
Do you believe that :
if you put fix stop loss from the beginning ,you will lose your trading in the long run ?
If you believe, please specify the reasons
if you do not believe also mentioned the reasons
THX. S.C.
if there is something you should keep secret,simply just save it,, so, just
  • #2
  • Jul 27, 2013 1:27am Jul 27, 2013 1:27am
Learning to place stop losses properly early will save you money.
If you are constantly losing money with stop losses, you are either placing them wrong or constantly trading in the wrong direction (both of which novice traders do).
I use a stop loss to manage risk. Not using one can result in big draw downs that the majority of novice traders won't be able to get out of.
  • #3
  • Jul 27, 2013 5:41am Jul 27, 2013 5:41am
Well i do not think that setting up the fixed stop loss would make you loser instead you would limit the losses which is really good on long run to save capital money for more potential trades.
  • #4
  • Jul 27, 2013 4:14pm Jul 27, 2013 4:14pm
I like to place a 'crisis' SL away from my entry...say 50pips. However I always have the real exit marked on my charts to exit manually. I tend to stick around until my trade goes into profit so if I need to leave I can then place SL into real position or to BE
Enter Signature
  • #5
  • Jul 27, 2013 10:14pm Jul 27, 2013 10:14pm
Quoting Davit
{quote} or if you get stopped out at 30-40pips and you count how many times that happened in a month and then you take all your stopped out trades and research which % were actually profitable trades had it not been for SL then something may shift in your trading paradigm. As an example of my recent trades 4winning trades over 300pips all were initially over -50pips in red but I gave them room to live and not long after all closed with profit.In conventional trading I would of had 4 losing trades -160pips instead of +300pips {image}
Hi Davit!
Congrats on the 300+ pips, but wouldn't you agree "I gave them room to live" is the same as "I'm in the red right now by over 200 pips but I'll just hold on a little longer and hope it comes my way"?
This is what new traders need to avoid and they need to focus on your signature .
Imagine trading for Goldman Sachs and your manager comes over to you and shouts "Why the hell is this trade so far in the red?" and your response was "I'm just letting it breathe a little!". You can guess how quickly you would be told to leave.
  • #6
  • Edited 10:45pm Jul 27, 2013 10:34pm | Edited 10:45pm
In a way you are just like a trader solely trading of oscillators, taking variables that are creating big orderflow completely for granted. I took the time to illustrate this. Hopefully will explain it all. It is your job to COVER zones with your SL the majority is watching. Heck, its even more important than the entry itself.
Furthermore, SL's need to be in synergy with the method you are using. If you are trading of S/D zones its your job to cover these zones. Therefore place your stop below or above a specific zone.

On a sidenote, ( to emphasize the picture ), most traders are tend to enter a trade early because of the fact they might miss out on the trade. Using a fixed stop in combination with that kind of mindset is devastating. You´ll be allways putting your SL (in case its fixed) at the WORST price ever.
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  • #7
  • Jul 28, 2013 2:15am Jul 28, 2013 2:15am
What shorting opportunity was there?
The market is moved by supply and demand. Once supply has been consumed at a certain level it will move up to the next.

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  • #8
  • Jul 28, 2013 2:59am Jul 28, 2013 2:59am
I deleted my posts.I realized my trading style and thinking does not fit in conventional mold so I let this thread be as is.
Regards
In trading, you have to be defensive and aggressive at the same time
  • #9
  • Jul 28, 2013 3:10am Jul 28, 2013 3:10am
Quoting Davit
I deleted my posts.I realized my trading style and thinking does not fit in conventional mold so I let this thread be as is. Regards
Please don't feel like I was attacking your trading style as it's not what I wanted to do. I just want to get to know which way you are coming from. Indicators don't move markets. Only S&D does. I've been trading full time now for the last 5 years and keep seeing these alternative methods on FF popping up yet none of them last. People get too bogged down with trying something new and different they throw reason out the window. Your trade may have worked out this time but for every one that does there will be two that don't, unless you trade so small you don't feel it and can let trades run 500 pips in the red in the hope they come around in your favor.

Good luck Davit, I hope you prove me wrong and are here in the next 3 years with this same strategy.
  • #10
  • Jul 28, 2013 3:31am Jul 28, 2013 3:31am
Quoting fosking
{quote} Please don't feel like I was attacking your trading style as it's not what I wanted to do. I just want to get to know which way you are coming from. Indicators don't move markets. Only S&D does. I've been trading full time now for the last 5 years and keep seeing these alternative methods on FF popping up yet none of them last. People get too bogged down with trying something new and different they throw reason out the window. Your trade may have worked out this time but for every one that does there will be two that don't, unless you trade...

I am not offended and I don't trade recklessly I hit 92 %winning average 49wins 4losses biggest loss was -$12 this month and none of my trades were more then max -130 in the red.
You project a little. I don't follow some lagging indicators.I trade with trend building a position and sometimes Counter trend when harmonics fit in.Price never goes up or down in straight manner.
As you know from your experience obviously there is lot more to trading News,Fundamentals,momentum,sentiment so I am not a timing bomb waiting to explode.I still have my original account!
My final thought about SL. One can have SL but needs space to accommodate your gain target.If one is aiming 500pips obviously 50pips SL is too small.That is why trading short gain,short TF results lot of losses because market volatility can become random and can easily take you out and still trade can go your way.
This is a huge subject which I can't possibly express all the nuisances.
Cheers and I am done here
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In trading, you have to be defensive and aggressive at the same time
  • #11
  • Jul 28, 2013 5:27am Jul 28, 2013 5:27am
to me SL frees my mind from torment. I know if price reaches a certain point then my premise was wrong and I'm out.
The prospect of having unlimited losses is unpalatable to me.just one slip up,just a hope that price will reverse like it always has is the ruin of many.It can happen in a flash. I can't play that kind of game.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #12
  • Jul 29, 2013 10:20am Jul 29, 2013 10:20am
Quoting sandycarrot
Do you believe that : if you put fix stop loss from the beginning ,you will lose your trading in the long run ?
//----

the answer would be no..... but I might be wrong......

morgan Stanley, nomura, wells fargo, jp morgan, credit agricole, credit Suisse, Barclays, goldman sachs and other such firms often publish there suggested trades.... usually there is a several hundred pip stoploss...... in all the years I can never remember a single one mentioning a stoploss of less than 100 pips....h
to trade and code, keep both simple... no call to impress....h
  • #13
  • Jul 29, 2013 10:35am Jul 29, 2013 10:35am
1. It depends on the strategy/method that it is employed.

2. Who cares! If you're winning more then you lose. Everyone's answer reflects their current beliefes about the markets. Usually losing traders aren't flexible enough to accept an opposite opinion.
Trading = a mirror to your human flaws. Fix them or be fixed.
  • #14
  • Jul 29, 2013 10:50am Jul 29, 2013 10:50am
Ah the stop loss argument...I wrote this some time back for bloxtrading:

http://www.bloxtrading.com/courses/l...tail.php?id=52

And this:
http://www.bloxtrading.com/courses/l...tail.php?id=67

Cheers
  • #15
  • Jul 29, 2013 1:46pm Jul 29, 2013 1:46pm
this has been answered precisely 42,973 times since forex factory came about.. the fastest way to find the answer is to use the search box and read.. not rely on the misguided information posted constantly by new users yet to blow their accounts.
  • #16
  • Jul 29, 2013 4:37pm Jul 29, 2013 4:37pm
Quoting fosking
If you are constantly losing money with stop losses, you are either placing them wrong or constantly trading in the wrong direction (both of which novice traders do). I use a stop loss to manage risk.
This ^^

Anyone who uses the "death by 1000 cuts" argument for not placing stops - it's not the fact you're using stops that's the problem...
Anything can happen.
  • #17
  • Last Post: Jul 30, 2013 4:07am Jul 30, 2013 4:07am
Quoting fosking
{quote} Hi Davit! Congrats on the 300+ pips, but wouldn't you agree "I gave them room to live" is the same as "I'm in the red right now by over 200 pips but I'll just hold on a little longer and hope it comes my way"? This is what new traders need to avoid and they need to focus on your signature . Imagine trading for Goldman Sachs and your manager comes over to you and shouts "Why the hell is this trade so far in the red?" and your response was "I'm just letting it breathe a little!". You can guess how quickly you would be told to leave....
Everything is relative. A trader who criticize other traders which using 200 pips stop loss because he use 50 pips stop loss will get complained by a trader who use only 25 pips stop loss. That trader then will get complained by another trader which use 10 pip stop loss. Is that mean the smaller stop loss, the better? Is that mean that 1 pip stop loss (after spread, off course) is the best stop loss?

The idea is not to set tight stop loss, but to give your trades chance to get reward (profit) higher than your stop loss (risk). No problem if you set 500 pips stop loss as long as you will let your trade to have a chance to bank more than 500 pips profit, maybe 1000 pips profit, for example.

In fact, tighter stop loss mean bigger cost to your trading since spread has bigger effect to trades with smaller TP and SL.
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