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Trading Without a StopLoss

  • #1,461
  • Dec 15, 2013 11:11am Dec 15, 2013 11:11am
Trading with or without stop loss.
The easy and simple answer: Yes, always trade with stop loss.

But the best performance is conciliate both ways in our trade!
  • #1,462
  • Dec 15, 2013 6:44pm Dec 15, 2013 6:44pm
Quoting michal9
Nefser, thanks, the 250 pips for Emergency SL was just an example... I would use something like 5*ATR(20), or place it behind 2 major key S/R levels, etc. I think it will often be around 200-400 pips, depending on a pair and volatiliy of course. Rap Skallion, thanks, yes the idea is to use position size so small that hitting the Emergency SL means a loss of , say 5%, or even less at first. I can think of going even deeper, to say, be more of less comfortable with a loss of 500 pips, but then the winners will be very small...
If you can consistently be in profit with the small position, Then move to one larger. A while back I moved too quickly to a position too large for my system to bear, and it was costly for me. For me the temptation to over trade is the one I have to resist. I suggest, at first, going with a position size so small that if it were any smaller, you would be too bored to watch.Make sure you can win consistently with whatever system you adopt, and Then moave gradually larger. If you experience is like mine you won't regret it.
Good luck to you whatever you do. Ignore this advice if it makes no sense to you.
  • #1,463
  • Dec 15, 2013 6:53pm Dec 15, 2013 6:53pm
Quoting Rap Skallion
{quote} Ignore this advice if it makes no sense to you.
Well, I'd say re-read it until it makes sense. Or ask a question to have it explained again, as it's exactly right. Until you trade a size that is comfortable (or, as you say, so small it becomes boring) you can easily increase the trade size moderately.

If you ever feel uncomfortable, double check whether you increase your size too soon or too quickly and by reducing your trade size, you should get back into your comfort zone.

RP - spot on. ;-)
  • #1,464
  • Dec 16, 2013 2:36am Dec 16, 2013 2:36am
Thanks, I confirm it makes sense to me :-)
I am trading microlots, with my dollar risk per trade $25. It is for me OK to take a loss like this. Issue is, I seem to take them too often :-(
Michal9
  • #1,465
  • Dec 16, 2013 7:33am Dec 16, 2013 7:33am
"Issue is, I seem to take them too often :-("

Michal9

Experience will help you improve on that score, adn the small size will help you gain that experience until you start making consistent profits.
It may well be time to hone your entry skills. (my basic strategy is to ENTER unless something I see warns me not to do so).

I have an 8 bar simple moving average on all my screens. If the 8 bar moving average on the hourly time frame is on the wrong side, I wait.
I miss very few opportunities this way, and quite a few situations that would have looked good otherwise and turned into losses. You can try that.

I watch the market reaction to the news at 8:30 & 10:00 am est. whether I trade them or not. A market that shrugs off good news has a negative sentiment, and vice versa. A market that seems to be waiting just for an excuse to move in a direction is a strong sign. Volume is usually high at these times, so low volume should be a warning.

(even though the volumes indicator is good only for your broker, follow this rule: High volumes indicated may only be true with your broker, Low volumes are probably true everywhere).

I throw horizontal lines where price has hesitated in the recent past above and below the current market price. Price can hesitate, frequently reverse trend around there. I let it get near those lines by itself, and join in only when I see price blowing right by those lines.

I try to look for reasons why these things happen.

You can pick up things like this with experience. Some people call this sort of thing a system, but I only let them inform my decision. I do not follow them like a human automaton.
No rule is responsible for what you do in the forex. Only you are.

and remember:
A margin call is a terrible thing!
  • #1,466
  • Dec 16, 2013 12:37pm Dec 16, 2013 12:37pm
Quoting michal9
Thanks, I confirm it makes sense to me :-) I am trading microlots, with my dollar risk per trade $25. It is for me OK to take a loss like this. Issue is, I seem to take them too often :-(
You should check if the reverse is also true.
  • #1,467
  • Dec 17, 2013 12:06pm Dec 17, 2013 12:06pm
Trading without a stop loss works until it doesn't . When I first started trading I traded without a stop loss because I didn't want to have "losses" and admit to being wrong . Ironically if you have enough time and money, often the pair will make their way back to break even or even a profit. Plus you get the emotional satisfaction proving that you were right all along...it worked great until I got stuck in a long downturn and the market eventually stopped me out. Now I always use stops. Will it hit your stop and then go back to what would have been a profitable trade ? Sure it will.. Will you take an 100,200, 300 point loss ? Nope.
  • #1,468
  • Dec 21, 2013 4:12pm Dec 21, 2013 4:12pm
Wow, crazy thread but one that appeals to me a a new trader. I checked out of the corporate world about a year and a half ago to trade Forex full Time. After a 6 month stint on a Demo I went Live January 1st of this year. I NEVER use a stop loss, started with about $30K and have grown that to about $165K through the end of October. Recently incorporated my trading business (LLC taxed as S-Corp) for taxation benefits and moved all my funds into my corporate trading account.

I have read most of this thread believe it or not and don't care to get into a pissing contest. Just found out about myfxbook.com and have linked my accounts to it. Here is a screenshot of myfxbooks personal account showing a 287% gain YTD through the end of October where I liquidated and move the funds to a Corporate Account. Because this is working for me way beyond my equity investments I've decided to add additional funds and will start 2014 with an account size around $250K

My post is not to brag but just to show how one CAN be successful trading without a SL. I typically Day Trade and if a trade goes against me I'll open up another trade in a highly correlated pair going the other way. I believe the GBP/JPY and EUR/JPY are very highly correlated and I will cross hedge with these pairs. If the trade goes against me I'll scale in at wide ranges of say 150 pips or so and average down. I have and am able to handle thousands of pip drawdowns and by scaling in at very wide ranges profit greatly when the trade turns around I kill it. and while I am in drawdown in one pair I'll constantly make profitable trades in the other pair. I'm always in the market but I don't care. It's how I make money. I thionk to do this you need a fairly sizeable account. My typical trade size is 2 lots on a standard account and I'll scale in at appropriate ranges for an additional 2 lots

I'm not going to get involved in any arguments that this is dumb, wrong, or just won't work. All I know is that it's worked for me thus far and I will continue to employ this strategy going forward. You don't need a SL to trade successfully
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  • #1,469
  • Dec 21, 2013 4:53pm Dec 21, 2013 4:53pm
Quoting yazzie
I have read most of this thread believe it or not and don't care to get into a pissing contest. Just found out about myfxbook.com and have linked my accounts to it. Here is a screenshot of myfxbooks personal account showing a 287% gain YTD through the end of October where I liquidated and move the funds to a Corporate Account. Because this is working for me way beyond my equity investments I've decided to add additional funds and will start 2014 with an account size around $250K My post is not to brag but just to show how one CAN be successful trading...
Thanks for the post. Gives me something to shoot for. Correlation of the two pairs you have mentioned is consistently above 60% and lately stands at 94%.
(taken from My fxbooks.com/forex-market/correlation - ain't it amazin' the stuff you can find out for free!)
  • #1,470
  • Dec 23, 2013 12:17pm Dec 23, 2013 12:17pm
I am too impatient for SL TP. If i plan to keep a position over night, i place SL. When i go for faster trade, as soon as i feel market going against me, i close without wait for SL to hit.
What is people here opinion on trailing stops?
  • #1,471
  • Dec 23, 2013 4:51pm Dec 23, 2013 4:51pm
When I see a profit greater than oh,5 or 6 pips, I take it as soon as I see any hesitation! (With a view to getting back in right away)
I call it the greedy boy system.
When I come close to support/resistance, I let the market go on without me, until it clears the support/resistance, then I get back in.
(if it doesn't- I'm out)

It's the rest of the system that makes this work out.
For instance I am away from the screen for hours at a time, sometimes, days.

-I use a lot of pending trades, with no stop losses, tight take profits, separated by the spread plus a pip or two, skipping the areas of support/resistance.
-I am almost always in. I only go one way on a pair, (if the market goes against me on that pair - I go the other way on a correlated pair.)
-i am currently trading a lot size that make me 7 cents a pip.

In short, I break almost very "rule" in the book, but I put these things together and get a system that seems to work consistently.
You may call me crazy-- and this may not work at all for you -- but I'm still here, still goin' after 2 years on the system - if you want to call it that.
  • #1,472
  • Dec 23, 2013 6:47pm Dec 23, 2013 6:47pm
Quoting Rap Skallion
When I see a profit greater than oh,5 or 6 pips, I take it as soon as I see any hesitation! (With a view to getting back in right away) I call it the greedy boy system. When I come close to support/resistance, I let the market go on without me, until it clears the support/resistance, then I get back in. (if it doesn't- I'm out) It's the rest of the system that makes this work out. For instance I am away from the screen for hours at a time, sometimes, days. -I use a lot of pending trades, with no stop losses, tight take profits, separated by the...

Sounds good, except it's a LOT of work for 7cents per pip especially when your only getting like a few pips per trade.


But if it makes you happy, carry on!!
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #1,473
  • Dec 23, 2013 8:39pm Dec 23, 2013 8:39pm
Quoting Rap Skallion
I am almost always in. I only go one way on a pair, (if the market goes against me on that pair - I go the other way on a correlated pair.)
Rap, good to see someone else doing the same thing. Works for me as well!
  • #1,474
  • Dec 23, 2013 11:37pm Dec 23, 2013 11:37pm
Quoting Rap Skallion
When I see a profit greater than oh,5 or 6 pips, I take it as soon as I see any hesitation! (With a view to getting back in right away) I call it the greedy boy system. When I come close to support/resistance, I let the market go on without me, until it clears the support/resistance, then I get back in. (if it doesn't- I'm out) It's the rest of the system that makes this work out. For instance I am away from the screen for hours at a time, sometimes, days. -I use a lot of pending trades, with no stop losses, tight take profits, separated by the...
Let's see here...

1) No stop loss.

2) Taking profit after 5 or 6 pips only and then immediately reentering.

3) Hedging "correlated" pairs.

It sure looks like you are breaking all the major rules for cutting costs and maximizing profit. I have to imagine you have some pretty big drawdowns (unrealized). Just because you haven't been margin called and are still around doesn't mean you are profitable. And if you are profitable, it means you could have been more profitable. Getting out and then immediately reentering is very, very costly. It seems to me you don't have a good grasp on how debilitating paying spreads can be to your bottomline. It seems like you also have a poor understanding of how crippling letting an open position move into deep drawdown can be. If you owned a store, would you let robbers come in and take some of the merchandise/inventory every day? So why allow your money to be taken constantly without stopping it? Your capital is your inventory. You need to protect it so you can use it to make money. You can't compound what you don't have.

I understand you may think it is wise to go against the majority by breaking popular rules, but that is not what is meant by "go against the crowd". Some things (rules) need to be respected in order to make it in this business. Paying spread unnecessarily by reentering immediately is one of those rules that shouldn't be broken. It's like selling something to someone and then buying it right back for more than they just gave you. Makes no sense whatsoever. That's not only trading logic, that's Business 101 type stuff.
  • #1,475
  • Dec 23, 2013 11:47pm Dec 23, 2013 11:47pm
Quoting Mohamed_1983
I am too impatient for SL TP. If i plan to keep a position over night, i place SL. When i go for faster trade, as soon as i feel market going against me, i close without wait for SL to hit. What is people here opinion on trailing stops?
I think limiting your loss is smart. That's halfway to success.
  • #1,476
  • Dec 24, 2013 2:00am Dec 24, 2013 2:00am
Quoting Mohamed_1983
... as soon as i feel market going against me, i close without wait for SL to hit.
That's the way to do ... then wait for a better setup.

Quoting Mohamed_1983
What is people here opinion on trailing stops?
That's a double-edged sword. The deal is to find the best number to give enough room for the trade to develop and to not give back too much once stopped out.
MT4/MT5 EAs/Indicators/Alerts coder
  • #1,477
  • Dec 24, 2013 3:41am Dec 24, 2013 3:41am
trading without stop loss song
Inserted Video
  • #1,478
  • Dec 24, 2013 4:16am Dec 24, 2013 4:16am
Quoting 2+2=4ex
{quote} Let's see here... 1) No stop loss. 2) Taking profit after 5 or 6 pips only and then immediately reentering. 3) Hedging "correlated" pairs. It sure looks like you are breaking all the major rules for cutting costs and maximizing profit. I have to imagine you have some pretty big drawdowns (unrealized). Just because you haven't been margin called and are still around doesn't mean you are profitable. And if you are profitable, it means you could have been more profitable. Getting out and then immediately reentering is very, very costly. It...
See That's all reasonable stuff. You assume that I never close at a loss. That would be , in my experience, a mistake. I close at a loss when I choose to, on the basis of a reasoned decision, sometimes way before any reasonable stop loss would be hit. I did get into some deep draw downs earlier, but have learned, with cross currency hedging, to keep them at bay and reduce them.

I have watched too often a pair move into profit, and , before it hits my take profit, move back out again. (any one else experience this?) I tried traveling stops only to see profits of 10-20 pips disappear when market moves back to the stop. It costs me nothing to grab the money!
It only costs me to get back in.

My usual activity is to come to the screens, observe which trades closed at a profit and update the pending trades accordingly.
Only if I see something not closed and in profit do I go to the minute screen with its 8-bar moving average. If it crosses that moving average, I get out immediately. If it is moving away from that average, I let it run.

Then I consider one of several entry strategies. some half of the time, I have gotten out close to the best point the market will be at for a while. The other half, I am back in at the cost of the spread, or at a better price. (I do not pay any commissions).

Active reasoned decision should be the basis for important actions, not blind obedience to some rule, no matter how carefully laid out.
That applies to take profits, closing losses, entry points, which pairs to trade, understanding the fundamentals and their role in market action (not as simple as it looks). If you do not find these things to be fun, you should not be trading.

Ah , but you do find them to be fun! That is why you posted! May good fortune head your way!
  • #1,479
  • Dec 24, 2013 5:22am Dec 24, 2013 5:22am
I agree with Rap Skallion on the general hedging/no SL practice, but certainly disagree on his trading method for closing trades and hedging vehicle.

I prefer a 100% correlated hedge, therefore I will put my hedge trades on the same pair, but at a scaled down trade size, with others going on further down as necessary.

Secondly, I let my trades run. This costs me at times, only because I (differing from many traders) don't actually have the ability to see the tops or bottoms until after the fact. uess I'm just a bit thick and have to wait until the market pulls back to find out where the peaks are...silly me. Maybe someday I'll be a real trader and be able to predict these tops and bottoms like everyone else.


Edit: Hmmm, nice. :-/ Lost the other 2/3's of this post and it's garbled above. Guess the square brackets killed it and I'll have to re-write it.
  • #1,480
  • Dec 24, 2013 7:34am Dec 24, 2013 7:34am
Quoting Nefser
I agree with Rap Skallion on the general hedging/no SL practice, but certainly disagree on his trading method for closing trades and hedging vehicle. I prefer a 100% correlated hedge, therefore I will put my hedge trades on the same pair, but at a scaled down trade size, with others going on further down as necessary. Secondly, I let my trades run. This costs me at times, only because I (differing from many traders) don't actually have the ability to see the tops or bottoms until after the fact. uess I'm just a bit thick and have to wait until the...
I sorta kinda let my trades run...I just take profits along the way..

There is a hazard using cross currency hedging on correlate currencies: They do not always correlate! When considering such pairs of pairs, I look for some other reason than sheer chance why they should correlate.

For instance: since the U.S. is Canada's main customer, Good news in the U.S. frequently is better news for Canada. So you frequently in a good U.S. news event see the loonie going down instead of up. The big guy is dragging the little guy along.

(No, this is not always true, but trading is a thing involving probabilities).

What Nefser suggests is a very strong alternative to the path I'm taking. I do not guarantee that I will not convert to this method.
Not yet though...

Be aware that very few people take my attitude, at least theoretically, toward taking profits.

I always read Nefser's postings with interest
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