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Trading Without a StopLoss

  • #1,701
  • Mar 12, 2014 1:09pm Mar 12, 2014 1:09pm
Argument for the larger T.P.:

Margin is dependent solely on the number of trades and size of lot and your leverage.

If you have 10000 in your account, and make only one trade ( say .20 lot) How much loss can you take before margin call?
Say your broker gives you 50:1 leverage. Margin = total contract size (.20) of lots/leverage = 250 When equity = free margin, the margin call goes out:
Principal - debtload (profit/loss) = equity.
equity -margin = free margin. so you start out with 9750 free margin.
as your debt load increases, your equity decreases (with the same debt load)
when debtload increases to about 9000 you start getting warnings about margin call.

Now, you make two such trades.
Then each trade can go down only 4500 or so
20 trades can go down only 450 or so.

so the fewer the number of trades you have open in loss, the greater the loss you can carry before you hit margin call.
If you have debt load of 5000, somewhere around x number of trades this will cause margin call

But if with the same load of 5000, if you reduce the number of trades (by increasing the size of the tp per trade, say to double, and halving the number required to give you that load) you can go almost twice as far.

Since margin call is the biggest reason you might be prevented from letting the market come back and bring your losers into profit (It will do that sooner or later, if you survive), The further you can get from it the more secure your trading method will be.

Thus, the smaller the lot size ( you get bored if it's toooo small) and the larger the take profit, the more secure you are in your trades.
now, if you make the tp too far away the price can wander up- and down, and up and down, and never close. So, from experience, you want to adjust the size of T.P. so that a good move will give you profit. 50 pips seems like a good number to me.

(six years I have been trading and never stopped to figure that out )
  • #1,702
  • Mar 12, 2014 7:51pm Mar 12, 2014 7:51pm
Trading News events with a large balanced correlated multipair hedging system:
Like the one I have been putting forth here:

Some people only trade the news. They have charts telling them what to do if the outcome of the news changes more than X amount from the expected, which pair to trade etc. and manage to make money at it.
The most important thing about timed news events:
With such a system as mine, If you can be at the screen at the time of a news events with S/R lines drawn
and pending trades entered, you have an opportunity to scalp the screamers. After things calm down a while, THEN you might desire
to take a look at what actually happened. You might be able to puzzle out a long-term implication. Besides, it might be fun to
find out what's going on in the old forex back yard.Tdoay, for instance, you might have liked be at screen at 8:30 pm est and make 250pips in 15 minutes as did I, closing out windows when the screaming stopped, reopening, repeatedy on the auzzi news. A quick look at the M.A.s will tell you whether or not the pushes from the news will agree or disagree with expected pushes from the parents. Now I will go have a look and see what the news actually says.
  • #1,703
  • Mar 13, 2014 12:27am Mar 13, 2014 12:27am
Quoting Rap Skallion
Argument for the larger T.P.: Margin is dependent solely on the number of trades and size of lot and your leverage. If you have 10000 in your account, and make only one trade ( say .20 lot) How much loss can you take before margin call? Say your broker gives you 50:1 leverage. Margin = total contract size (.20) of lots/leverage = 250 When equity = free margin, the margin call goes out: Principal - debtload (profit/loss) = equity. equity -margin = free margin. so you start out with 9750 free margin. as your debt load increases, your equity decreases...
How many trades do you think an account should be able to bear?
If you are good at something, never do it for free--Joker
  • #1,704
  • Edited 10:52am Mar 13, 2014 1:15am | Edited 10:52am
Quoting jmn5611
{quote} How many trades do you think an account should be able to bear?
An entry at .08 lot size requires 16 dollars a trade, regardless of profit or loss. in margin.

90 trades or so gives you a margin of 1440 , or roughly 1/3 the balance on my account (roughly 4000)

I start getting in trouble when I go beyond that number:

I imagine that scales up and down pretty consistently: so I would suggest 45trades/$2000 If you use .08 lot size, and 50 pips take profit.

Below $2000 you are under-capitalized, but do not despair. Use the fullest number of windows you have available, and trade only in the window that shows the best conditions, (Optimal moving averages and plenty of push), at the time, limit lot size to .02/1000 +.01 and be very reluctant to enter more than one trade at at a time in any window. Say you have 500 in your account: that is .02lots per entry, or 2 Cents a pip.
More on that later.
  • #1,705
  • Edited 12:25pm Mar 13, 2014 7:58am | Edited 12:25pm
Come back on News event trading. The headlines looked pretty good for the USD, not so good for the loonie. The market reaction? Nothin'!

it's a good thing I made some 400 pips at night, on the way to going to the bathroom.!

Wise man accept money any time from anywhere legal. !

Update at 1:20 pm EST>: with Japan crashing over 4 different windows, now over 600 pips and counting: No scheduled news event did this, tho you can bet they looked back to the last major news event and managed to blame it on that! (Unfair, how do I know they don't have the answer to everything?)

How are you guys doing on your demos? Questions?
  • #1,706
  • Mar 13, 2014 1:31pm Mar 13, 2014 1:31pm
Quoting Rap Skallion
Come back on News event trading. The headlines looked pretty good for the USD, not so good for the loonie. The market reaction? Nothin'! it's a good thing I made some 400 pips at night, on the way to going to the bathroom.! Wise man accept money any time from anywhere legal. ! Update at 1:20 pm EST>: with Japan crashing over 4 different windows, now over 600 pips and counting: No scheduled news event did this, tho you can bet they looked back to the last major news event and managed to blame it on that! (Unfair, how do I know they...
1 Percent equity, 5% balance, and enough room for more trades.
ANY COMMENTS?????
Attached Image (click to enlarge)
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  • #1,707
  • Mar 13, 2014 2:17pm Mar 13, 2014 2:17pm
Quoting pullice
{quote} 1 Percent equity, 5% balance, and enough room for more trades. ANY COMMENTS????? {image}
balance exceeds P/L by >100p Security is huge: the system works for you doesn't it?

I notice you must use a traveling stop loss instead of a take profit. You can walk away from this and let the computer do the screamers.
Good idea, for those who have to leave the scene to work, etc.

I would describe this as a nekkid trade with traveling stop loss reaction type of reaping of the crop. The bed makes this work so much better than a random thing, or just 2,3 pairs, doesn't it?

play with this for a while.

Notice that the Jpy made a move that was not foreseeable from the day's news, and you caught it in several windows. Same with the GBP and the Loonie, but they did have news events. The bed caught them all....

If you make your lot size .03, you would have tripled your profits, with very little extra strain. (.02 per thousand + .01)
Play with that and see what results you get.

2.5% * 260 trading days = 60% . triple that with .03 lots and you more than double your balance. increase lot size .01 every 500 increase in balance, and you have a compounding feature. There are formulae which will let you calculate exactly how much. But let's just say lots.

Can you find a place with better potential than this? Remember that sooner or later those trades that are not in profit will come into profit.

Yes , there are wrinkles to be aware of, but they can be handled.

By George, I think he's got it. What's more, he's made it his own. Monday we'll talk about ways to go into a cash account.
  • #1,708
  • Mar 13, 2014 2:44pm Mar 13, 2014 2:44pm
Quoting Rap Skallion
{quote} balance exceeds P/L by >100p Security is huge: the system works for you doesn't it? I notice you must use a traveling stop loss instead of a take profit. You can walk away from this and let the computer do the screamers. Good idea, for those who have to leave the scene to work, etc. I would describe this as a nekkid trade with traveling stop loss reaction type of reaping of the crop. The bed makes this work so much better than a random thing, or just 2,3 pairs, doesn't it? play with this for a while. Notice that the Jpy made a move that...
I usually take 20 to 25 pips profits, it just so happened I had to leave the pc and go somewhere, when I arrived the pairs were dropping, i don't usually close any trade in profit instantly especially if its more then 30 to 35 pips, i put a small trailing stop of 3 to 5 pips. There is something amazing about these pairs, i am not seeing something but what I have realized is that if any pair moves away from my positions my equity floats around $ 1000 and my balance keeps rising which is a good thing. I need to still " Own my own brain" in a scence where i can get a better understanding how these coralations work before i start increasing my lot sizes. Remember you done your homework and you have been trading this way quite some time. What I am really afraid of is those 500 to 600 moves against me and point of no return, that's where the trouble starts, Demo account is painless, no emotions, 5k$ to 10$ live account is acceptable if you 30 to 40% in DD. what if you have a 100$ k account live, will I be able to mentally control that amount of DD??

So far I am happy with the results, markets are much calmer then in 2008/2009

In my opinion a 3 to 4% per month compounding is a really reasonable amount. What do you think ?
  • #1,709
  • Edited 6:46pm Mar 13, 2014 5:21pm | Edited 6:46pm
I think 30% ROI annually is a good low ball target, in that that would motivate you to stay in the game. 4, 5% /mo would give 50%-60%: a reasonable target, and 100% well within the realm of possibility on a good year. If you double 5k into 10k in a year, I bet you will be a lot more confident than you are now. (I hope I will be, though I feel I have to restrain my overconfidence now). You can gain confidence gaining a reason to be confident.

I was given the advice "don't invest more money in anything than you can afford to lose. I spent more money on a vacation in the Caribbean Than I have here in the forex. (It was worth it. Once in a lifetime you should spend big money to go somewhere in style, if you get it. Otherwise consider that there are a lot of people out there who need your help. There is something very satisfying in spending 1000 to have a well drilled in Africa, knowing that a hundred people a year would have died from drinking dirty water in that place and the well will last for generations.

I aim to tithe my winnings at this game, and plow the rest of the money back into it, building a possible trust that would DO something worthwhile.

I get a kick out of helping people and enabling people to help themselves. That's what I am doing here, right now.

I don't need more money, I am comfortable the way I am. So if this helps you get well off, Please pay it forward.
remember the poor!
  • #1,710
  • Mar 14, 2014 3:48am Mar 14, 2014 3:48am
Quoting dare123
Good-day All, I choose to stop trading with stoploss. I now trade without stoploss. What do you think about trading without stoploss? and if you are currently trading this way or you have traded this way before, kindly share your expirience.
Might be very risky as many here have said, but if we check the movement careful maybe occasionally we might attempt to try it if the market is balance. I tried one recently on USDJPY at 102.22 and the market was bailing on, had losses at the initial stage, and it's not going well at all
  • #1,711
  • Mar 14, 2014 7:26am Mar 14, 2014 7:26am
Quoting realjumper
{quote} And your opinion is backed up with: "meh, i trade my system, not fear" ......... ROFL

dude, u said yeah yeah like 3 posts ago to the same guy

ur sayin the same thing now

leave him alone, will ya, why the F>UCK r u so concerned with him

tell me something in all ur 14k posts u spent half o em doin this same stupid shit, u know how i can tell, ive only read this thread till page 4, figure tht, u come across as a class A d.ick, so shut it

ty\

R u really rolling on the floor LAUGHING?
  • #1,712
  • Mar 14, 2014 7:55am Mar 14, 2014 7:55am
Quoting realjumper
{quote} Show us then...put up or shut up. {quote} Prove it...talk is cheap {quote} Not yet....mister margin call will decide that for you

lol

someone mentioned u were a trader?
  • #1,713
  • Mar 14, 2014 8:06am Mar 14, 2014 8:06am
Quoting tar
Many traders fail because they don't use SL , and many traders fail because they do use a SL . A SL is to limit your loss per one single trade but it will not necessarily protect your whole account on the long run . So there is no right answer here , trading is a battle either you win or lose just be prepared with your tools ....

this is the smartest post in this thread!! im pretty sure, even though im on page 5
  • #1,714
  • Mar 14, 2014 9:55am Mar 14, 2014 9:55am
Quoting Vik22
{quote} this is the smartest post in this thread!! im pretty sure, even though im on page 5
Some traders win because of fixed stop loss, some win in spite of fixed stop loss, some traders win because they don't use stop loss, and some in spite of that.

It all depends on a carefully reasoned, intelligent plan. Slow day today for me. Trading cautiously because I am near the limits of my comfort. Closed all pending trades early, to avoid closed market hi jinks Going to pack it in soon.

Monday, I will discuss my ideas of how to proceed, once you have developed confidence in a plan on a demo:
  • #1,715
  • Mar 14, 2014 4:02pm Mar 14, 2014 4:02pm
If I asked the broker to lend me money so I can start an account, in which I would hope to have him pay me more money on top of the money he lent me, he would say "What, are you nuts!", but when I put up some of my own money to start an account, He proceeds to do that exact thing.

The thing that causes me to wonder is that so many people do not like it when this happens.

I am glad that he does this, would like for him to do more, as long as I can avoid him saying "Okay, now you have to pay me back out of your own money"

The thing that causes me to wonder is that so many people want to pay him out of their own money when they do not have to.
  • #1,716
  • Edited 12:43pm Mar 15, 2014 9:37am | Edited 12:43pm
If currency A goes way up (and nobody else does much), all pairs leading with A will go up and all pairs following with A will go down. Money pours from all other currencies into A (theoretically, ideally, and usually so). Those pairs sharing in the name will probably move, because of A.
No other pairs. The disconnect is complete.

That means no regenerative process leading to Forex doom, at least from this angle:
  • #1,717
  • Mar 16, 2014 2:14pm Mar 16, 2014 2:14pm
I used be a NO-SL guy in the beginning , because almost all of the time , the market moves in the form of SINE wave and I even had to wait weeks sometimes to get profit on a position which went into loss..

but one day , everything changed when there was a crazy news and I had big positions opens , the market moved very very opposite to me , thus emptying my accounts.

Since then I have decided to always keep a level of stoploss , which is usually set at the amount of profit I have gained in the past few days and which I can afford to lose.

there should always be a SL in place , some people call it gambling , trading with SLs , their stupid claim is that you are betting on a 50/50 chance of market moving in your direction and if it doesnt you lose and your SL are hit and if your TP is hit , you win ... but I call it money management.
  • #1,718
  • Mar 16, 2014 7:29pm Mar 16, 2014 7:29pm
Quoting Sh0ukaT
I used be a NO-SL guy in the beginning , because almost all of the time , the market moves in the form of SINE wave and I even had to wait weeks sometimes to get profit on a position which went into loss.. but one day , everything changed when there was a crazy news and I had big positions opens , the market moved very very opposite to me , thus emptying my accounts. Since then I have decided to always keep a level of stoploss , which is usually set at the amount of profit I have gained in the past few days and which I can afford to lose. there...
Especially:
"Since then I have decided to always keep a level of stoploss , which is usually set at the amount of profit I have gained in the past few days and which I can afford to lose"

If you are going to use a stoploss, This seems to be as sensible an idea as any:

When ask myself if I can close a position in loss, an important factor is whether or not I still maintain a profit for the month. I just did that with a pair I had open at twice the lot size I use now(!). I use the formula .02 mini lots /1000 + .01 mini lot. With small sizes and correlated hedges, (when market moves against some pairs, it moves for others, better than 70% of the time).

I consider that the tax man, since he can no longer collect tax in the loss, subsidizes the loss.

I would consider, if I used a stop loss, actively closing a pair plunging toward it before it hit that point, and moving that point if the movement slowed, showing signs of tiring, maybe turning around.

I still prefer letting my broker carry as much of my debt load as I can comfortably get away with.

If you are making money doing what you do, why change?

I suspect you don't actually hit stop loss as often as many others.
A survey of the correlations page at http://www.myfxbook.com/ shows that pairs that share the same name have correlations > +/- 70%, freguently 80% with the negative correlations being exclusively those in which the name in question is reversed in the order of pairs.
  • #1,719
  • Mar 16, 2014 10:01pm Mar 16, 2014 10:01pm
Well, for me, trading without a stop loss is just financial suicide - a recipe for disaster. I see the potential for a small manageable loss (I only risk 1% of my balance) becoming a potential wipe out of my account without the SL in place. I don't move my SL after I place a trade either - except to move it in the direction of a trade that is going in my favour. Sure, I've been stopped out and then seen the trade turn around and head in the direction I orignally wanted it to but I've seen more trades just continue past my SL more often than not. So, that's my plan and I stick to it - if your plan is different and it works for you then stick to it. If you're new to FX then have a stop loss, have a plan and if it's working, stick to it.
  • #1,720
  • Mar 16, 2014 11:29pm Mar 16, 2014 11:29pm
Quoting SydneyTrader
Well, for me, trading without a stop loss is just financial suicide - a recipe for disaster. I see the potential for a small manageable loss (I only risk 1% of my balance) becoming a potential wipe out of my account without the SL in place. I don't move my SL after I place a trade either - except to move it in the direction of a trade that is going in my favour. Sure, I've been stopped out and then seen the trade turn around and head in the direction I orignally wanted it to but I've seen more trades just continue past my SL more often than not....


"except to move it in the direction of a trade that is going in my favour."

That is an excellent use of a stop loss: It allows you to let the thing run and walk away knowing there is no more risk on that trade.
A true competitor with close, consider, re-enter.
That idea is common practice among traders, and a good alternative to the method mentioned in the last sentence. If conditions are optimum (indicators in your favour, moving averages all moving in your direction and spreading apart form one another, etc), This strategy is probably best.

Remember this though: It is still true, even if you use fixed stop losses>
The more pairs you watch, the more good set-ups for profitable trades you will see:
If you balance the trade biases between windows sharing the same currency as part of the pair, when that currency moves, whichever way it moves, one or more of the windows will catch the move.

if you mark the closest line of s/r to the current price and put a pending trade beyond that line, and a stop loss at the current market price, you will have essentially the system I use, but with a fixed stop loss.

I happen to thing you will make more money if you do not, but I could easily be wrong, and if I get into sufficient trouble sufficiently long enough, I will convert.
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