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Real Fx traders do not use stoploss

  • #341
  • Jan 21, 2014 7:04am Jan 21, 2014 7:04am
Quoting thehouse
You must always use a stop-loss order, people who do not are not professional traders!
Exactly, trading without SL, not a good idea. Of course, a few professional traders make a point of how they trade without any SL but that doesn't mean that we would have to do the same..
  • #342
  • Jan 21, 2014 9:13am Jan 21, 2014 9:13am
If anyone has any concrete examples of professional traders not using stop loss orders I'd like to know. I know there are a few who use mental stop losses only but that's still placing a stop loss. What I'd like to see if there are professional traders who say 'I don't use stop losses and instead I just wait for the market to return to my entry price, etc.'. I haven't come across a pro trader with that philosophy yet.
  • #343
  • Jan 21, 2014 11:52am Jan 21, 2014 11:52am
Quoting EnoFX
If anyone has any concrete examples of professional traders not using stop loss orders I'd like to know. I know there are a few who use mental stop losses only but that's still placing a stop loss. What I'd like to see if there are professional traders who say 'I don't use stop losses and instead I just wait for the market to return to my entry price, etc.'. I haven't come across a pro trader with that philosophy yet.
Hi
A stop order becomes a market order when triggered. Any serious broker will warn you about the risk related to holding a stop order. This risk is higher when your broker is a market maker, since he knows your stop position and he can execute it a the price he wants (market price in a market he makes). In terms of money management a stop loss order is not quantifiable (slippage), this in high volatility means that your loss can be way much higher than expected. But the bigger damage a stop order can make to your account is due to the absence of time decay. You can be right in your analyse/strategy and be ousted by a spike or a temporary consolidation. As a professional I don't use stop orders, but I hedge my positions; hedging means the use of options not a reverse position. Let's say, to make it simple, I buy 100 spot of something in the same time I buy a put option allowing me to sell at 100. If it goes my way and the price is at 104 on the spot, my put option because it has a time value will still be priced at 100 or 99. I sell it and close my spot position. If it goes against me like the spot price is at 96, my option will be at least at 100 allowing me to control my loss. Having said that if you don't use options of course you should use stop loss even though it's not a panacea.
Rien ne sert de courir il faut partir à point.
  • #344
  • Jan 21, 2014 12:03pm Jan 21, 2014 12:03pm
Quoting flytox
{quote} Hi A stop order becomes a market order when triggered. Any serious broker will warn you about the risk related to holding a stop order. This risk is higher when your broker is a market maker, since he knows your stop position and he can execute it a the price he wants (market price in a market he makes). In terms of money management a stop loss order is not quantifiable (slippage), this in high volatility means that your loss can be way much higher than expected. But the bigger damage a stop order can make to your account is due to the absence...

Unfortunately, Forex options, especially those at the money, are very expensive. Also, you can only have strike prices at round numbers. Correct me if I'm wrong.
Remember, Red. Hope is a good thing, maybe the best of things...
  • #345
  • Jan 21, 2014 12:29pm Jan 21, 2014 12:29pm
Quoting ForexFury
{quote} Unfortunately, Forex options, especially those at the money, are very expensive. Also, you can only have strike prices at round numbers. Correct me if I'm wrong.
Well, ISE strikes are at every 50 in eurUsd, (1.3000-1.3050). It can be expensive but when you learn how to use volatility this becomes a decisive factor when you take a position ( meaning you enter on the spot only when the hedge is not expensive).Finally when you start using options, very quickly you will definitely forget the spot since options are a very powerful tool, a bit complicated but with limitless possibilities and at very low cost whatever the market is doing. In fact I can say that mastering options is the ultimate level in the long process of becoming a professional trader.
Rien ne sert de courir il faut partir à point.
  • #346
  • Jan 21, 2014 4:38pm Jan 21, 2014 4:38pm
Quoting flytox
{quote} Well, ISE strikes are at every 50 in eurUsd, (1.3000-1.3050). It can be expensive but when you learn how to use volatility this becomes a decisive factor when you take a position ( meaning you enter on the spot only when the hedge is not expensive).Finally when you start using options, very quickly you will definitely forget the spot since options are a very powerful tool, a bit complicated but with limitless possibilities and at very low cost whatever the market is doing. In fact I can say that mastering options is the ultimate level in...
Thanks for this useful information flytox!
Remember, Red. Hope is a good thing, maybe the best of things...
  • #347
  • Feb 17, 2014 4:38pm Feb 17, 2014 4:38pm
Hi guys,

I'm new to Forex and new around here.

I got a rookie questions for you.

How do you decide where to put the SL?
How much pips do you chose and why?


Thanks,
Luukas
  • #348
  • Feb 22, 2014 8:06pm Feb 22, 2014 8:06pm
Quoting Twourvis
Hi guys, I'm new to Forex and new around here. I got a rookie questions for you. How do you decide where to put the SL? How much pips do you chose and why? Thanks, Luukas
Hi, Twourvis.
Your SL depends on your posisition size relative to your account size. Basically don't let the total loss account for more than 5% of your account size.
You could have a smaller SL on a short timeframe with larger position size, or larger SL on a long timeframe with smaller position size.
Hope that helps.
  • #349
  • Feb 23, 2014 6:55pm Feb 23, 2014 6:55pm
that is a lie that is one of the biggest mistakes new traders make. it depends on if your an active trader or a long term trader. when you start messing with bigger time frames you got to make sure you got plenty of margin but always make sure you use a stop loss
  • #350
  • Mar 15, 2014 4:55pm Mar 15, 2014 4:55pm
Quoting Blackship
hi guys, I've heard that pro fx traders who do not use stop losses and this had contributed much controvesy. Anyone who approve or disapprove please comment
this month I burnt my first LIVE trading account with 900EUR. It's gone.

Why? Because

1) the bigger position and leverage the stronger emotional attachment I felt to losing it so I clang to it in hope the unfavourable trend would turn back and everything would be ok again... no, it was not. Instead of turning a little loss into a big profits I just kept turning small losses into big losses

2) at one point I was completely taken aback - those little waves I was trading turned into -50 and +60 pip huge tsunami waves effectively crushing all my open positions... not a chance to do anything manually. NO CHANCE.
  • #351
  • Apr 2, 2014 12:28am Apr 2, 2014 12:28am
Quoting Blackship
hi guys, I've heard that pro fx traders who do not use stop losses and this had contributed much controvesy. Anyone who approve or disapprove please comment
They have, cut loss scenario
  • #352
  • Apr 2, 2014 1:22am Apr 2, 2014 1:22am
Quoting masterofpepe
{quote} this month I burnt my first LIVE trading account with 900EUR. It's gone. Why?.........
Hi,
So, you experienced already fact that exit is more important than entry, right ??
This is valuable advice given by Ronald Raygun at his profile.... this advice is worth millions....

"Here's a tip for the newbies who are learning to trade.

Ignore all that hype for various systems. Remember--for now--this one fundamental rule: The exit is more important than the entry.

With that in mind, I want you to do the following on a demo account:

1) Toss a coin: Heads long, Tails short
2) Manage the trade as you see fit. If you think the trade is bad, exit.
3) When you exit a trade, go back to step 1.

If you can double your account in less than 50 flips, I consider you a good enough trader to go live. I personally average between 20 and 30 flips, and I do it once a week, on the weekends, trading simulated data.

Simulator: (http://www.forexfactory.com/attachme...02008%208:18pm)

Try it. It helps."

Good Luck
JacekPreserve Precious Capital
  • #353
  • Apr 2, 2014 4:29am Apr 2, 2014 4:29am
Trading without Stop loss can be a part of Trading strategy. I have accs with different brokers, and for example with Hotforex I gave up with SL because it conforms with trading conditions there. And I feel fine trading without SL because it allows to see how pure manual trading is.
  • #354
  • Apr 2, 2014 1:57pm Apr 2, 2014 1:57pm
Quoting flytox
{quote} I don't use stop orders, but I hedge my positions;
I do exactly same thing when I see setup for opposite direction had appeared. SO far so good. You have to remember if you'll just sit and wait till one day price will turn around and move in your favor, you will most probably blow you account one day.
  • #355
  • Apr 2, 2014 2:25pm Apr 2, 2014 2:25pm
real traders don't trade without a stop loss
only gamble traders, novices and those that think they know better than the market

i see the point about MM Brokers taking out (known) stops, but no serious trader should be with a market maker broker (for long) as they 'll always get you in the end anyway

just because the markets at the moment nearly always go up or sideways does n't mean they always will,
volatility will back (one day) and you 'll be glad you had a stop
  • #356
  • Apr 2, 2014 5:11pm Apr 2, 2014 5:11pm
Everyone is trying to say something but really none of these people are real traders or shall I say traders that trade with no capital in their hand.Obviously if your capital is small stoploss needed but my advice with that small money, please go and buy yourself a good air of jean.
Traders with big capital 100K and etc. they never use stoploss, never, they cant use it anyway because they know what they are doing.When you have that capital behind you and knowledge , you will always stay on top.
  • #357
  • Edited Apr 5, 2014 3:10pm Apr 4, 2014 7:43pm | Edited Apr 5, 2014 3:10pm
Quoting Jackub
{quote} Hi, So, you experienced already fact that exit is more important than entry, right ?? This is valuable advice given by Ronald Raygun at his profile.... this advice is worth millions....
When I first read this in Ronald's profile, I likewise thought it was genius. However, later I grew to see entries and exits differently.

Ultimately you win by being net long while price is rising, and net short while it's falling, frequently and/or heavily enough to overcome br0ker costs. Entries and exits are merely vehicles to adjust net position/exposure. If a trader is skilful enough to 'read the market' to manage his exits, then why wouldn't his market knowledge be equally effective in determining his entries? Of course exits are more difficult, but that's because there's money at stake, and emotions creep in; it has nothing to do with the trader's skill at analyzing the price movement. Profit is the difference between entry and exit; just because exits are more difficult, doesn't necessarily mean that they're more important.

Ultimately, exits are based on either (1) emotion, (2) objectively proven analysis, as the trade unfolds, or (3) you fix your exits at the time of entry. If exits are fixed, or are simply based upon trailing stops or other management rules, then you can use automation to exit and walk away from the computer, eliminating emotion completely. And with regard to (2), unless it can be shown objectively that market probabilities have meanwhile altered, there is no valid reason to adjust these levels while the trade is in progress.
  • #358
  • Jun 26, 2014 3:14pm Jun 26, 2014 3:14pm
Does one need a stop loss if the position is always held for a single bar?

For example:

Timeframe: 1 hour bars (every hour the system makes a trade/no trade decision)

If the system decides to make a trade, then no matter what, the position will be closed in the bar immediately after it was opened.

So if a position was opened at 10:00 am, then it will be closed at 11:00 am.

Would a a stop loss be needed in the above scenario?
  • #359
  • Jun 27, 2014 11:18am Jun 27, 2014 11:18am
Account sizes, margin requirements, position sizes are all different. A big account with a reasonable size position may take a few hits and still get up and keep going. However same hits may kill the smaller size account. The idea is to be able to fight another day. So depending on your situation, I think "Stop loss" can be very useful.
  • #360
  • Jun 27, 2014 12:17pm Jun 27, 2014 12:17pm
Thank you for your reply Cenetti. However, you do not answer my question (if you were trying to).

Would a stoploss be needed in the scenario I mention in post 358?
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