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Trading Without a StopLoss

  • #1,861
  • May 2, 2014 2:38am May 2, 2014 2:38am
Quoting 358
May i know what Lot sizes u guys use? I dont use stop loss myself, my lot size is 20-100 Lots depend on market . Of cos my acct is not "small" and even when i am sitting on 200pips against me, it wont clean my acct out. So i normally hold till it comes back to break even or profit.
Yes I agree if your account size is huge and you have enough equity to hang tight through the drawdown, you can probably hold a position till you are back in B/E or profit zone. That said, it is just not very productive usage of capital. Plus, if you continuously do the 'hold till back in profit' way, you are going to keep accumulating the losers and eventually run into huge tail risk that will eventually be out of control to manage. How many 20-100 lot losers can you keep? You will probably need a million dollar account to withstand that type of drawdown, unless of course you don't use leverage.

A better and smarter strategy is to take a small loss by cutting early, reverse the trade and aim to make immediate profit on the reverse trade.

I normally trade 5-10 standard lots per position and my leverage is 1:50. I don't risk more than 2% of my capital per trade (i.e. approx. USD10k per position). I cannot imagine trading without a stop loss.
  • #1,862
  • May 2, 2014 2:46am May 2, 2014 2:46am
My acct is indeed more then a Mill. and i just painting a scenario not that i am always sitting on 200pips draw down.
and even if i do i still have plenty of leverage to trade and make back the draw down while waiting for it to come back.

My point is ,dont over leverage urself out till u cant hold even 50-200pips of temporary losses.
i dont go for Long trades like 100 pips -200pips ,too long and its a waste of my time.
i take a trade "i know my level" i set a 20 pips TP i logout.
  • #1,863
  • May 2, 2014 2:47am May 2, 2014 2:47am
Quoting CoolScalper
{quote} A better and smarter strategy is to take a small loss by cutting early, reverse the trade and aim to make immediate profit on the reverse trade.
Yes, this works well in theory. In real life traders experience something called whipsaw.
If you are good at something, never do it for free--Joker
  • #1,864
  • May 2, 2014 3:17am May 2, 2014 3:17am
Quoting 358
i think it depend on the size of the acct.
Yes I agree with you, up to a point. I think the S/L discussion is just a way of talking about one aspect of risk mitigation in trading, or how skilled we are at identifying risk before entering a trade. One set of traders identifies risks before entering trades; another set of traders views risk as being their proximity to a margin call. Then there are others that fit in between these two groups. My guess is, however, that if someone mismanages a small account, they will find a way to mismanage a large one, too.
  • #1,865
  • May 2, 2014 3:35am May 2, 2014 3:35am
Ok, I rarely even talk, but after..read "some people opinons on stoploss and leverage size and all thats...jumble mumble." It seem to me that "majority of people here "preach to use stoploss".


My answer would be: There is ALWAY a stop loss mentally that is if you don't psychically set a hard stop loss.

The stop loss relies on your trading plan.

Now the main question here is: WHICH is better? mental stop loss or psychical set stop loss?

The answer is : MENTAL stop loss because market is RANDOM. NO EA ever make bunch of money with ridicoulus small risk SL and resonable/high tp .

I am not even going to bother explain why market is random, you should know this by now if you tested enough EA you see that fix sl just fail.

EA can never cope with random. That's why trader experience is crucial for sucess. You are SUPPOSE To see the market high and low range and be prepare to ADAPT (change your mental sl) .

IF you say if you use mental SL = you blow account then you deserve it for overleverage.

That's all I am going to say to help some noob out. Obviously the pro will ignore what i say .

Don't bother replying to my comment as I see the previous comment trashing. So it's up to you to believe....me this is my experience. Yes I trade forex since August 2008 and I have lost 10,000$ in 1 week live account due to over leverage.
  • #1,866
  • May 2, 2014 4:51am May 2, 2014 4:51am
Quoting victor_ray
Ok, I rarely even talk, but after..read "some people opinons on stoploss and leverage size and all thats...jumble mumble." It seem to me that "majority of people here "preach to use stoploss". My answer would be: There is ALWAY a stop loss mentally that is if you don't psychically set a hard stop loss. The stop loss relies on your trading plan. Now the main question here is: WHICH is better? mental stop loss or psychical set stop loss? The answer is : MENTAL stop loss because market is RANDOM. NO EA ever make bunch of money with ridicoulus small...
Interesting to meet folks who think in a similar vein. It is not that we hold onto trades ad-infinitum. Its that we realize we dont need to take out a trade thats still in the main fundamental trend. If the fundamental trend changes then yes we close and go the other way, not using SL is not the same thing as never taking a loss. I see no purpose in closing a buy trade when I am in a long term UT. Maybe it takes some time for it to get back but it always will in a trend.

The bottom line is this, the only thing that matters is your account balance. It is either going up or down. If you take a SL you have to have your next trade make up the distance of the loss first before you go back into profit. Then you are always looking for that perfect entrance and there is no such thing. Forex is the exchange of money between, govt., businesses, banks, and individuals. There is no predicting when a business, govt., bank or individual will exchange funds. So at any moment, at any time, price can do anything. No amount of fundamentals, chart reading, screens empty or screens full of indicators can predict those exchanges.

However, long term trends, as seen on the monthly chart, can be followed and used to your best advantage. I see no reason to use a SL on an UT or DT that will last anywhere from 2-6 months as an average. It is a waste of your money and time. So we may trade differently and for different reasons why we do things but once I got this long term view of Forex I have been consistently profitable for many years. So the bottom is I determine when and where I take my losses and no broker is ever able to take that decision making power from me. In my trading scheme of things I am in full command of my account. Good luck.
  • #1,867
  • May 2, 2014 5:00am May 2, 2014 5:00am
Most of time the price reach to my stoploss then move back to my target "take profit"
thats why i don't use stop loss anymore
  • #1,868
  • May 2, 2014 5:11am May 2, 2014 5:11am
What I cant seams to fathom is like everything else in this world we are all individuals. We all are totally different in nature. A couple would have x amount of children. The children are born from the same parents but in every child would be completely different in nature. NO 2 kids would be exactly the same although the parents are the same thus bringing me to my next point.
If trader A,B,C believes that they likes to trade with no stoploss and small leverage let it be. If trader X,Y and Z decides to trade with tight stops and high leverage let it be. There is no wrong and right way of trading. A traders goal is to make profits. 1 objective and 1 goal. How we get to that goal is completely discretional. If trader A is using low leverage and no stop loss and achieves his goal why is trader Z jumping sky high. Trader Z did not give any money and certainly does not put food onto trader A,s table and most definitely does not sleep in trader A,s bed.
So lets behave ourselves and respect each others opinion. Different advice is given from different people in this forum. We read this advise but we are not forced to apply it. I trade with no stoploss and I made money. The minute I changed to a stop loss and higher lot sizes I lost money. What works for me might not work for you but I certainly don’t need you to insult me directly or in directly for something that I like and is working for me.
The market is random, no 2 traders are exactly the same although they might be using the same method.
Only 1 thing for certain is to achieve our goal in making profits
Happy trading
  • #1,869
  • May 2, 2014 6:32am May 2, 2014 6:32am
Quoting jmn5611
{quote} We have been doing well being civilized in this discussion. No one has called anyone a pejorative until you arrived. If you have a dissenting opinion, why not just state your opinion?
  • #1,870
  • May 2, 2014 9:01am May 2, 2014 9:01am
Quoting GEfx
This has been an interesting discussion, especially the last few pages. I trade with a stop loss on every trade, and my average stop loss is never greater than 25 pips. On a trade of one standard lot, my loss will never be greater than $250. So, trading without a stop loss would require a strategy that would never negatively impact my account by more than $250. From what I have read here, this requires reducing my position size to something less than $10/pip. I have a target for every trade that averages 80 pips, so lowering my position size will...
GEfx, how did you determine a 25 SL and 80 TP as your levels and what time frame do you trade on ? I have often wondered if a pair drops 10 pts during its normal ranging movement how likely is it to return to BE or profit, or 15 pts or 20 pts etc..basically what is the level of no return or a significant change in trend.
  • #1,871
  • May 2, 2014 9:40am May 2, 2014 9:40am
Quoting freundr
{quote} GEfx, how did you determine a 25 SL and 80 TP as your levels and what time frame do you trade on ? I have often wondered if a pair drops 10 pts during its normal ranging movement how likely is it to return to BE or profit, or 15 pts or 20 pts etc..basically what is the level of no return or a significant change in trend.
I have a trade journal with details of my approach, so please feel free to visit my journal (I haven't been posting much over the last few months due to changes that were implemented by FF). In summary, every day I perform a cascading series of analysis on the 17 currency pairs I trade. It all starts with an analysis of market structure; if market structure is clear/good, I perform more TA to see if TA and market structure are aligned; if TA is good, I start to look for trade set ups that sync with the first two sets of analysis; when set ups are identified, I only trade when there is a clear open path to my targets, and only if I can see the risk in the trade as being somewhere between 18 and 25 pips, which typically sets up targets between 70 to 100 pips.
  • #1,872
  • May 2, 2014 9:56am May 2, 2014 9:56am
Quoting GEfx
{quote} I have a trade journal with details of my approach, so please feel free to visit my journal (I haven't been posting much over the last few months due to changes that were implemented by FF). In summary, every day I perform a cascading series of analysis on the 17 currency pairs I trade. It all starts with an analysis of market structure; if market structure is clear/good, I perform more TA to see if TA and market structure are aligned; if TA is good, I start to look for trade set ups that sync with the first two sets of analysis; when set...
Appreciate the information and I will check out your journal.
  • #1,873
  • May 2, 2014 10:23am May 2, 2014 10:23am
Quoting Rap Skallion
{quote} There are two reasonable places I think, and a reasonable time. I use 8 bar, 32 bar and 96 bar simple moving averages. If the 8 bar crosses the the 96 bar, it is time to close. You cannot expect this pair to come into profit for quite a while, and chances are good you will make better progress with a better pair. If the 8 bar crosses the 32 bar at a sufficiently steep angle (30 degrees or so) why wait? you know where it is headed so close with less loss to your balance. The 3 day rule seems to be a good one, if the pair has made no progress...
Thanks Rap and jmn for your replies to my earlier question.
  • #1,874
  • May 2, 2014 11:51am May 2, 2014 11:51am
I use stop lost like an insurrance... If i short a top or sell a bottom i open 2 trades one buy-one sell
I put the stop on the trend side .
I dont quite the screen until i am sure the conter trend is on the way
Let the GOLD time Roll
  • #1,875
  • May 2, 2014 1:06pm May 2, 2014 1:06pm
I'd like to chime in.

If the market is trending, you don't need a stop loss unless you are trading against the trend.

If the market is consolidating and you are trading in the slop (the market is sideways), you don't need a stop loss...this one to me is where most traders get hit when using a SL. Once you've determined that the market is going sideways then you need to figure out its direction for the day, long or short, and trade that way. If you're wrong there's no need to panic because the market will come back to you generally. You may be stuck in a trade for 3 to 4 days but you will usually end up hitting your target price if it was reasonable.

And about those mental stops. They will kill your account just like an actual SL will because once you see a huge candle going in the opposite direction of your trade, you will bail, taking a loss.

Open a demo account and trade GBPJPY for its volatility and develop your sea legs.
Everything easy was hard at first
  • #1,876
  • May 2, 2014 2:14pm May 2, 2014 2:14pm
Quoting freundr
{quote} Appreciate the information and I will check out your journal.
Good luck and good trading!
  • #1,877
  • May 2, 2014 3:00pm May 2, 2014 3:00pm
I'd like to add something to one of my previous posts. In my first comments, I assumed that a trader who traded without a stop loss would trade at $3/pip, compared to trading with a stop loss and trading at $10/pip. This gives the trader without a stop loss room as their trades run against them. Assuming that the no stop trader is carrying multiple negative trades at any point in time, let's assume they have 3 negative trades on their book at any given time. At some point, this trader may have so many open, negative trades that they are unable to open additional trades. But assume for a minute that they consistently have 3 negative trades.

Again, from my previous post, the trader using stop loss positions, after 20 trades, suffered 3 losses totaling $750. The non-stop loss trader would be in a better financial position as long as their trades average less than 85 pips each in draw down. Anything beyond 85 pips each put the trader in a worse position than had they used a stop loss. I know that the hope is that the negative trade will recover to break even or a small profit, but the impact on the trading account mirrors the trader who just takes the loss. In addition, at some point, the non-stop loss trader could have too many open, negative trades to continue trading, even though they have viable trading opportunities in front of them.

I agree with the observation that a trade that hits a stop loss will very likely return to its opening price. But this only makes sense if the benefits of holding negative positions exceeds the benefits of the opportunities foregone. Put another way, if you hold negative trades open until they reach break even, you are saying that break even is better than trying to turn this situation into positive trades. Instead of being down 80 pips, would you be better off to take a small loss of 20 pips, and open a trade to capture the 60 pips (instead of -80, take a -20 and open a trade the other way to capture the remaining 60 pips of this move), then re-open a trade I your original direction to capture the move back to your original opening price, thereby picking up 80 more pips? Perhaps I'm missing something. I realize that it is difficult to capture all of the 60 and 80 pips, but you have 140 pips to make up for the -20 pip loss, and then lots of space for profits.
  • #1,878
  • May 2, 2014 8:00pm May 2, 2014 8:00pm
Here is a better way of explaining it so some of you understand the basic concept of trading like this:

Think of it this way. There are traders who do not use their entire lot size in one entrance. They break it up into 3 parts and enter on multiple levels. Let us say you like trading 3 lot sizes. Instead of entering all three at once you enter them as 1 lot size at 3 different spots. This allows you the flexibility to find the spot you want to enter in. Let us say you enter one lot but some sudden news story breaks and give a pair a 2 or 3 day reversal. Well when that run is done you can enter your 2nd lot and then the third at a retracement. You phase in your lot size. This also helps in case you are just plain wrong. Instead of taking a 3 lot loss you now only take a 1 lot loss not having played your whole position. To me this really helps your money management in that you still play your 3 lot size on winning trades but not on your losing trades, unless you have really blown your entrances. If you can grasp the basic principle and follow long term trends then you can make most of your trades profitable. I am a fan of small lot size to account size so as to make trading a relaxing and sometimes boring affair. The concept that you can make pinpoint entrances when you are dealing with a hundredth of a penny move seems ludicrous to me. Especially when at any moment some company or govt. makes a big exchange that can move the market for a couple of hours or days. Give yourself some space and allow trades time to become profitable. Most currencies really only change direction a handleful of times a year you just need to give yourself the room to stay with a price trend. Check your monthly charts and you will see what I mean. Good luck.
  • #1,879
  • May 2, 2014 8:48pm May 2, 2014 8:48pm
I set a stop loss, but I'm not using it

I'm scalping the 3 min chart and I'm sitting by my trades, the stop loss is just some measure of disaster insurance (power outage, network problems).

I think we're way to relaxed regarding large infrastucture outages, they can happen even in highly developed places. It's not that long ago we had some serious power outages here in that area (just 30 km from dusseldorf, germany) involving not only my home, but also the distribution boxes for telephone/internet and I'm not so sure I could rely on my cellphones internet in such cases.
  • #1,880
  • May 3, 2014 3:42am May 3, 2014 3:42am
[quote=nanningbob;7445139]Here is a better way of explaining it so some of you understand the basic concept of trading like this: Think of it this way. There are traders who do not use their entire lot size in one entrance. They break it up into 3 parts and enter on multiple levels. Let us say you like trading 3 lot sizes. Instead of entering all three at once you enter them as 1 lot size at 3 different spots. This allows you the flexibility to find the spot you want to enter in. Let us say you enter one lot but some sudden news story breaks and give a pair a 2 or 3 day reversal. Well when that run is done you can enter your 2nd lot and then the third at a retracement. You phase in your lot size.

That what i think: If put myself in the position that i have 400 lots to trade what i am going to do?

Forget the Stop Loss but if the trend go to the opposite i reverse and average my balance sheet.

The most difficult move for me is to pull the plug and reverse the trade... i think the st
Let the GOLD time Roll
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