where do I have to put my stop loss | Forex Factory

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where do I have to put my stop loss

  • #1
  • First Post: Feb 22, 2014 4:35pm Feb 22, 2014 4:35pm
hi
i have some problem on one thing only
i make couple of strategies that it is working nice but always i have the same problem
i lose all the money i am making because i don't know how to put a useful stop lose

once my capital was (on demo account) only 1000$ and i made within a month 7000$ as profit but i lose 5000$ because i didn't put i good stop lose

i trade on usd/nzd
most of time this it is go 150 pipe up and down per day ( i use one day time frame)

so i do mostly 50 to 100 pipe every day but in the third day i lose (250) or 150 so back to 0

what do i am missing?!
  • #2
  • Feb 22, 2014 5:25pm Feb 22, 2014 5:25pm
Quoting hamedmohd
hi i have some problem on one thing only i make couple of strategies that it is working nice but always i have the same problem i lose all the money i am making because i don't know how to put a useful stop lose once my capital was (on demo account) only 1000$ and i made within a month 7000$ as profit but i lose 5000$ because i didn't put i good stop lose i trade on usd/nzd most of time this it is go 150 pipe up and down per day ( i use one day time frame) so i do mostly 50 to 100 pipe every day but in the third day i lose (250) or 150 so back to...
You are missing a whole lot. Most importantly, your risk management seems way off. As a general rule, stick to 1:1 risk/reward ratio or better. Preferably 1:2+ on higher time frames, but if you have a high probability win rate with a 1:1 risk/reward ratio then that's money in the bank. Right now it seems your risk/reward ratio is at 2.5:1-3:1 which is going to lead to more wins here and there, but a large loss will wipe out your profits. Research risk management and money management concepts to get a better idea of how much to risk per trade. Also, you haven't specified where you currently place your stop loss orders and why you place it there. A little more info will definitely help us identify what you are doing wrong and how to correct it.

Wish you luck!
  • #3
  • Feb 22, 2014 10:12pm Feb 22, 2014 10:12pm
Quoting FXMasterSK
{quote} You are missing a whole lot. Most importantly, your risk management seems way off. As a general rule, stick to 1:1 risk/reward ratio or better. Preferably 1:2+ on higher time frames, but if you have a high probability win rate with a 1:1 risk/reward ratio then that's money in the bank. Right now it seems your risk/reward ratio is at 2.5:1-3:1 which is going to lead to more wins here and there, but a large loss will wipe out your profits. Research risk management and money management concepts to get a better idea of how much to risk per trade....
well said 100% agreed
  • #4
  • Feb 23, 2014 3:36am Feb 23, 2014 3:36am
sorry for late replay i was sleeping

ok my strategy is simple because when i was in stock market also happen for me that when i use a simple strategy i was making some cash but when every i try to make it complicated i was losing a lot so always i keep my trading way easy and clear

and i use normal indicators like MACD and RSI and others normally i use 2 indicators in one time (one for buy and one for sell) for example

stop loss:-
normally i don't have a stop loss but if i put i must see the range that the currency moves per day (average like mostly the usd/nzd moves 200 pipe so i put stop loss on 200 pipe i dont make per trade 200 ( i may make 50 to 70 only )
gbp/usd moves not much so i keep the stop loss @ 70 pipe ( i make around 25 every time )

i do a lot of winning but one loss take my 4 winning
i have one strategy to TP on 50 pipe on usd/nzd i do like every 10 win:1 lose but that one take 4 or 5 of my winnings money
that mean if i have by chance 2 lose it will clean my account

so most of my strategies it is 80% winning but normally i win 1 pipe and lose 3 or 4 pipes in average
  • #5
  • Feb 24, 2014 1:49am Feb 24, 2014 1:49am
Hamed, I suppose by now you already know what's wrong with you risk management strategy. Aiming for lesser profits while risking too much. You should invert that and have the (70 pips (USD/NZD)), as your risk and pips as your target profit...
Alternative you can have a fixed percentage risk/reward system- Eg, 2% risk against 4% reward targets- (percentage on your capital)
  • #6
  • Feb 24, 2014 2:26am Feb 24, 2014 2:26am
sorry everyone in this thread is wrong
not to piss u guys off but you need to ask yourselves one important question...
why should you be paid for making the trade?

do you feel as if because the market creates a head and shoulders and you and everyones grandmother noticed it ... you should get paid?

A market technician should understand how the underlying price action works ... you get paid to understand the market and accept the duration and risk of the trade.
and you should only trade if there is a lucrative value proposition.

your looking at this like a gambler you might as well me martingaling.
  • #7
  • Feb 24, 2014 3:43am Feb 24, 2014 3:43am
Quoting Danny Maina
Hamed, I suppose by now you already know what's wrong with you risk management strategy. Aiming for lesser profits while risking too much. You should invert that and have the (70 pips (USD/NZD)), as your risk and pips as your target profit... Alternative you can have a fixed percentage risk/reward system- Eg, 2% risk against 4% reward targets- (percentage on your capital)
Ok i understand your point and i am doing to do it
so if my target is. 70 pipe my stop must not go more than. 70 pipe
and it is better to do as per fxmastersk the target profit 140 pipes and stop lose on 70

many thanks i will check and gave you the results
  • #8
  • Feb 24, 2014 3:52am Feb 24, 2014 3:52am
Quoting domino
sorry everyone in this thread is wrong not to piss u guys off but you need to ask yourselves one important question... why should you be paid for making the trade? do you feel as if because the market creates a head and shoulders and you and everyones grandmother noticed it ... you should get paid? A market technician should understand how the underlying price action works ... you get paid to understand the market and accept the duration and risk of the trade. and you should only trade if there is a lucrative value proposition. your looking at this...
I understand you bro what you mean but i ensure you that we are not gambling first because the gambling if forbidden in our religion and second because we are opening positions when ever we see some point in technicl analysis as me
me some trader use news for there traders
so gambling is really far away from me
  • #9
  • Feb 24, 2014 11:13pm Feb 24, 2014 11:13pm
Quoting hamedmohd
{quote} I understand you bro what you mean but i ensure you that we are not gambling first because the gambling if forbidden in our religion and second because we are opening positions when ever we see some point in technicl analysis as me me some trader use news for there traders so gambling is really far away from me

what is gambling? if a pinbar forms at resistance and you sell the break place a stop at high and place a target take profit and figure that historically you win 50% with distance at 1:1.3 r:r and expect to make money over the long term but not truly knowing the odds of the future...

how is that different than

betting on a horse that has statistically wins 20% of the time and averages a payout of 1:9 ? its betting as you dont know the odds. by listening to the nonsense on these forums people are convinced that what they are doing is not gambling when by definition it is just in a different setting.
  • #10
  • Feb 24, 2014 11:19pm Feb 24, 2014 11:19pm
you are correct in that real trading is not gambling. But I assure you that the way most people on the forum do it... it is. Real trading is giving the market a reason to pay you ... just like any business there is a reason why the market should pay you for your interaction... figure out why you deserve to be paid and youll be a real trader.

good luck in your search
  • #11
  • Feb 24, 2014 11:47pm Feb 24, 2014 11:47pm
Quoting domino
{quote} what is gambling? if a pinbar forms at resistance and you sell the break place a stop at high and place a target take profit and figure that historically you win 50% with distance at 1:1.3 r:r and expect to make money over the long term but not truly knowing the odds of the future... how is that different than betting on a horse that has statistically wins 20% of the time and averages a payout of 1:9 ? its betting as you dont know the odds. by listening to the nonsense on these forums people are convinced that what they are doing is not...
let me gave you an example
if you like to open a shop first you have to do your home work (study the market ) the need of the goods that you would like to sell and best places that gaving the best selling opportunity and many many things more after that you open your shop you as per the statistics that most of the new shop are closing within first year and if you pass 3 years without lossing the shop and you make some profit so you are going in the write way

all this is studying the future - no body knows what will happen next 10 mint but you may simply think and believe me if you think and do your home work 80% you will get it right

simply like all the people thay dont know the future but they belive and saw (from other people life) that if he complete this high school and complete his master or what ever he will have a good life and a good salary

so just we need to understand what happened before and analyse that data so we get some information it will help us to understand the future better

like mr buffit said just buy a stock for a good company and keep it for the future like when he bought cocacola know cocacolca control 70% of soda selles in the world
  • #12
  • Feb 24, 2014 11:48pm Feb 24, 2014 11:48pm
Quoting domino
you are correct in that real trading is not gambling. But I assure you that the way most people on the forum do it... it is. Real trading is giving the market a reason to pay you ... just like any business there is a reason why the market should pay you for your interaction... figure out why you deserve to be paid and youll be a real trader. good luck in your search

  • #13
  • Feb 25, 2014 1:48am Feb 25, 2014 1:48am
... It's funny how people think that trading is something like a real business
  • #14
  • Feb 25, 2014 2:21am Feb 25, 2014 2:21am
Quoting Mingary
... It's funny how people think that trading is something like a real business


Any how Danny Maina and fxmastersk did help me for my Q and i think it is enough replaying in this topic
  • #15
  • Feb 25, 2014 2:24am Feb 25, 2014 2:24am
Stop loss point completely depends on your trading style. I prefer to put SL under 10-20 pips for bull and 5-10 for bearish trends.
  • #16
  • Feb 25, 2014 10:42am Feb 25, 2014 10:42am
Quoting Danny Maina
Hamed, I suppose by now you already know what's wrong with you risk management strategy. Aiming for lesser profits while risking too much. You should invert that and have the (70 pips (USD/NZD)), as your risk and pips as your target profit... Alternative you can have a fixed percentage risk/reward system- Eg, 2% risk against 4% reward targets- (percentage on your capital)
this one agreed.
4 winning < 1 SL
lesser profit, too risking, maybe if youre have a good method, you should try your method when; your pair have a big impact
eg, first friday of the month (NFP), and another big impact about your pair
  • #17
  • Feb 25, 2014 11:21am Feb 25, 2014 11:21am
Quoting leebsurag
Stop loss point completely depends on your trading style. I prefer to put SL under 10-20 pips for bull and 5-10 for bearish trends.

well noted thanks
  • #18
  • Feb 25, 2014 11:21am Feb 25, 2014 11:21am
Quoting angelpatrici
{quote} this one agreed. 4 winning < 1 SL lesser profit, too risking, maybe if youre have a good method, you should try your method when; your pair have a big impact eg, first friday of the month (NFP), and another big impact about your pair
will test this method
  • #19
  • Feb 26, 2014 6:52pm Feb 26, 2014 6:52pm
Up to now, Domino was the only person in this thread with any inkling of how things work. You have to understand the underlying mechanics of the market; only after that can you make informed choices of where to place a stop loss. Forget about risk/reward ratio - it's totally useless without more understanding. A lot of people say they have a great r/r ratio and that they won't take a winner unless it goes 2x their risk...what they don't seem to realize is that their odds never changed with their negative expectancy system. Assuming 50/50 coinflip odds on a 1:1 attempt, your odds just change to 33% when you double the distance you have to go, so that you lose twice before you can expect a winner and break even - just by raw luck with no edge. If you're using real money, withdraw it now or I promise you, if you continue at it, you will come out a very unhappy loser. Unless you have a personality that is obsessive in solving problems, it isn't likely you will even come close to being a consistent winner even after years of trying. Successful trading is not something stupid people are capable of unless they come about some incredible luck.
  • #20
  • Last Post: Feb 27, 2014 2:34am Feb 27, 2014 2:34am
Quoting Kanzler
Up to now, Domino was the only person in this thread with any inkling of how things work. You have to understand the underlying mechanics of the market; only after that can you make informed choices of where to place a stop loss. Forget about risk/reward ratio - it's totally useless without more understanding. A lot of people say they have a great r/r ratio and that they won't take a winner unless it goes 2x their risk...what they don't seem to realize is that their odds never changed with their negative expectancy system. Assuming 50/50 coinflip...
many thanks bro for the adviceand be sure that I have real money in the market but I dont use it till now as you send need more practice
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