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

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

  • #1
  • First Post: Aug 3, 2013 2:30am Aug 3, 2013 2:30am
Do you believe if your stop loss too tight
you will find it hard to stand up in the long run
if there is something you should keep secret,simply just save it,, so, just
  • #2
  • Aug 3, 2013 2:46am Aug 3, 2013 2:46am
Yes. If its to tight it will be too easily hunted or caught in market noise.
  • #3
  • Aug 3, 2013 4:37am Aug 3, 2013 4:37am
my stoploss is 400pips! my broker hates my guts!!!
  • #4
  • Aug 3, 2013 4:42am Aug 3, 2013 4:42am
Are you trading a micro account with that kind of stop-loss 400pips?
When I Buy Price Short, When I Sell Price Goes Long.
  • #5
  • Aug 3, 2013 11:16am Aug 3, 2013 11:16am
There should be a reason for where you place your stop - it tells you that the reason for entering your trade was simply invalid and that it's time to eat your losses and move on. It shouldn't be 400 pips away for the sake of being 400 pips away; your broker has nothing to do with stop hunting or any of the other nonsense rookies attach to their stop losses being hit.
  • #6
  • Aug 3, 2013 12:06pm Aug 3, 2013 12:06pm
Quoting jcvmw
Are you trading a micro account with that kind of stop-loss 400pips?

i use a prime broker with a minimum balance req of $50,000, but my account balance is way more than that.
  • #7
  • Aug 3, 2013 1:01pm Aug 3, 2013 1:01pm
I target at least 5 times risk. Its either I'm hot or I'm out.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #8
  • Aug 3, 2013 2:28pm Aug 3, 2013 2:28pm
Quoting Makavell
{quote} i use a prime broker with a minimum balance req of $50,000, but my account balance is way more than that.
I just wanted to thank you in advance for your funds transfer. People with lots of money but little knowledge are what make this so profitable for the rest of us.
  • #9
  • Aug 3, 2013 3:37pm Aug 3, 2013 3:37pm
Quoting Kanzler
{quote} I just wanted to thank you in advance for your funds transfer. People with lots of money but little knowledge are what make this so profitable for the rest of us.

I happen to trade a $210,000 acc with fxcm(active trader)currently which I opened with $70,000 three years ago less over $140,000 withdrawn from account over 2 year period. I checked your profile and saw you use fxcm too so Dumbo, Ill leave your Kanzlic skull to take a wild guess who's been doing the transfers and who's been donating to the markets. Ill also wish to use this rare opportunity to thank you and the other over 190,000 fxcm liquidity providers for making this so profitable for the few of us.
  • #10
  • Aug 3, 2013 3:43pm Aug 3, 2013 3:43pm
Quoting Kanzler
{quote} I just wanted to thank you in advance for your funds transfer. People with lots of money but little knowledge are what make this so profitable for the rest of us.

Yes me too!! Obama, Obama is the man, equal distribution he says.
When I Buy Price Short, When I Sell Price Goes Long.
  • #11
  • Aug 3, 2013 4:01pm Aug 3, 2013 4:01pm
Quoting Makavell
{quote} I happen to trade a $210,000 acc with fxcm(active trader)currently which I opened with $70,000 three years ago less over $140,000 withdrawn from account over 2 year period. I checked your profile and saw you use fxcm too so Dumbo, Ill leave your Kanzlic skull to take a wild guess who's been doing the transfers and who's been donating to the markets. Ill also wish to use this rare opportunity to thank you and the other over 190,000 fxcm liquidity providers for making this so profitable for the few of us....
I'm not with FXCM anymore, so you're mistaken on that point. And to be quite frank, I'm a consistently profitable trader who uses market micromechanics as my edge, so you're not pulling any money from my account. Congrats on your winnings, don't spend them too fast though. Whenever the macroeconomic conditions you got lucky on dry up you'll be repaying your loan with interest lol.
  • #12
  • Aug 3, 2013 4:05pm Aug 3, 2013 4:05pm
Quoting Kanzler
There should be a reason for where you place your stop - it tells you that the reason for entering your trade was simply invalid and that it's time to eat your losses and move on. It shouldn't be 400 pips away for the sake of being 400 pips away; your broker has nothing to do with stop hunting or any of the other nonsense rookies attach to their stop losses being hit.
For your ears only!!! Im a mid to longterm trader, anything below 4H chart is junk to me, I dont scalp or use wonder EA's like the rest of the Horde! ( you and other LP's) So I really dont give a rats ass about spreads and stop hunting!!!
  • #13
  • Aug 3, 2013 4:11pm Aug 3, 2013 4:11pm
Quoting Makavell
{quote} For your ears only!!! Im a mid to longterm trader, anything below 4H chart is junk to me, I dont scalp or use wonder EA's like the rest of the Horde! ( you and other LP's) So I really dont give a rats ass about spreads and stop hunting!!!
That explains why you have decent returns over the last couple years, but we'll see how things go in the future. A lot of traders thought they were the bees knees in the early 2000s and could cite years of great profits...And no, I don't use any EAs. I don't use indicators. I don't use elliott wave or any other mythical bullshit. I just know where banks are placing their orders. Like I said, enjoy your profits now but don't spend them all buddy.
  • #14
  • Aug 3, 2013 4:27pm Aug 3, 2013 4:27pm
Quoting Kanzler
{quote} That explains why you have decent returns over the last couple years, but we'll see how things go in the future. A lot of traders thought they were the bees knees in the early 2000s and could cite years of great profits...And no, I don't use any EAs. I don't use indicators. I don't use elliott wave or any other mythical bullshit. I just know where banks are placing their orders. Like I said, enjoy your profits now but don't spend them all buddy.
Im not claiming to have a lead on this game Kanz, I've been trading since 2001 and believe me I was once a gold card member of the LP club. Seems we both have the same habits I dont use indicators, just my plain old 4H candle. If d banks know I know what I know about Cable, they'll send Jason Bourne to assassinate me
  • #15
  • Aug 3, 2013 4:32pm Aug 3, 2013 4:32pm
Quoting Makavell
{quote} Im not claiming to have a lead on this game Kanz, I've been trading since 2001 and believe me I was once a gold card member of the LP club. Seems we both have the same habits I dont use indicators, just my plain old 4H candle. If d banks know I know what I know about Cable, they'll send Jason Bourne to assassinate me
I can respect that. Accept my apologies for assuming you were a big account noob....no shortage of them around here and never will be lol.

Quoting eurotrash
Wonder what's up on FF. Let's see... ego boosting, OP one of the dumbest I've seen yet... yep, FF and its participants at the usual...
This forum is boring, what else do you expect? There isn't much to trading and once you actually know what you're doing it's boring as hell. I come here almost exclusively for entertainment purposes.
  • #16
  • Aug 3, 2013 4:37pm Aug 3, 2013 4:37pm
Quoting eurotrash
Wonder what's up on FF. Let's see... ego boosting, OP one of the dumbest I've seen yet... yep, FF and its participants at the usual...
If only people could take time to read and assimilate, the world ill be a better place free of trash
  • #17
  • Aug 3, 2013 9:09pm Aug 3, 2013 9:09pm
how about tight stop losses with 2 pips or 5 pips or 7 pips
What do you think guys,, in the long run
if there is something you should keep secret,simply just save it,, so, just
  • #18
  • Aug 3, 2013 11:57pm Aug 3, 2013 11:57pm
Quoting sandycarrot
how about tight stop losses with 2 pips or 5 pips or 7 pips What do you think guys,, in the long run

Spread will eat us.

------------------------------
Let's say we trade with TP 10 pips and SL 2 pips and our spread is 2 pips.
Assume that our trading system have no positive edge nor negative edge. The end result is pip win = pip loss, so PF = 1.

No spread calculation:
With profit factor = 1, we will get 1 profit trade and 5 loss trades.
Profit: 1 * 10 = 10
Loss: 5 * -2 = -10
PF = Profit / Loss = 10/10 = 1

Now, we use spread = 2 pips:
When we open a position with 2 pip spread, we will start with -2 pips.
We close profit when price move 10 pips to our direction: -2 + 10 = 8
We close loss when price move 2 pips against our direction: -2-2= -4
So, with 2 pips spread, we will close in profit of 8 pips instead of 10 pips and we will close in loss of 4 pips instead of 2 pips.
Profit: 1 * 8 = 8
Loss: 5 * -4 = -20
PF = Profit / Loss = 8/20 = 0.4

See how bad spread destroy our trade result if we use small TP/SL.
2 pips spread turn this trading system from PF = 1 (without spread) to PF = 0.4.

Now, let's count how big PF without spread should be in order to overcome spread.
With TP 8 and SL -4, we need 1:2 profit/loss trades. It means we need to win 1 time and loss 2 times
Profit: 1 * 8 = 8
Loss: 2 * -4 = -8
PF = 8/8 = 1

Now, turn it to no spread calculation
Profit: 1 * 10 = 10
Loss: 2 * -2 = -4
PF = 10/4 = 2.5

This means if we use TP = 10 pip and SL = 2 pip strategy, we need to achieve PF = 2.5 (without spread) only to make this system reach break even (PF = 1) in spread = 2 pip.

--------------------------------------

Now change TP and SL to 100 and 20.

Without spread:
Profit: 1 * 100 = 100
Loss: 5 * -20 = -100
PF = Profit / Loss = 100/100 = 1

With spread 2 pips:
Profit: 1 * 98 = 98
Loss: 5 * -22 = -110
PF = Profit / Loss = 98/110 = 0.89

This mean with TP=100 and SL=20, 2 pips spread only turn this trading system from PF=1 to PF=0.89
  • #19
  • Aug 4, 2013 1:56am Aug 4, 2013 1:56am
Quoting eurotrash
Wonder what's up on FF. Let's see... ego boosting, OP one of the dumbest I've seen yet... yep, FF and its participants at the usual...
dude,the age group shifted. its now a 17-25 yrs old thing.
wo-yoy! wo-yoy! wo-yoy! wo-yoi! wo-yoy-yoy-yoy!
  • #20
  • Aug 4, 2013 3:04am Aug 4, 2013 3:04am
Quoting Makavell
my stoploss is 400pips! my broker hates my guts!!!
They are too tight, especially when your margin call is 75 pips.
The Thief of Wall Street
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