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Trading Without a StopLoss

  • #1,981
  • May 6, 2014 6:47am May 6, 2014 6:47am
Quoting saneblane
{quote} Well I don't really get into fundamentals but I do see your point. However I think there is something that is missing from you equation, and that is 2 currencies falling are rising at the same time that gives the impression that a pair didn't do anything, when it's just an illusion. In reality when they USD moves it moves the same against every currency, for example if no other pair than EURUSD was being bought and sold what ever happens to the USD would manifest itself in all the pairs in the USDX. But we know that in real life pairs are...
beware Saneblane, absolute correlation is very rare of the nineteen pairs I trade, every one has a correlation with three or four others of 80%.
that means that sometimes They just don't together. I have encountered several instances where you would expect a pair to move because of correlation and they don't.

I strongly suspect that while the market trade total stands at an equilibrium for a while, it is not a noiseless process. New people enter the market all the time, and others depart. The mathematical model is just not that precise. The trillions of dollars that change hands daily do vary somewhat.

The broad sweeps of your analysis may be in the right direction, and your model may be be (I hope is) profitable (Mine is, (155p so far today)and our thinking is so very similar) But occasionally you are going to miss a trade. The mathematics involve are not those that sent voyagers I and II so deep into space. (Nasa is currently spending a lot of money trying to figure out why they both are now veering off course and have yet to come up with an answer).

Consider each trade on its own merits as if you have brought all the wisdom and experience you now possess to your very first trade...
Or not - -
  • #1,982
  • May 6, 2014 7:02am May 6, 2014 7:02am
Trading without s/l is not the best thing a trader should do. I will not recommend a new trader to trade without setting the s/l. S/l closes your trade when you are running at lost especially in your absent. It is only good when you are watching your trade , don't you think the market might move against you, since the market changes at any time? I will say here that is is only better to trade without setting the s/l when you are monitoring your trade. On the other way round, don't trade without setting the s/l when you know you will not be there to mornitor the trade.
  • #1,983
  • May 6, 2014 8:37am May 6, 2014 8:37am
Quoting blesssing23
Trading without s/l is not the best thing a trader should do. I will not recommend a new trader to trade without setting the s/l. S/l closes your trade when you are running at lost especially in your absent. It is only good when you are watching your trade , don't you think the market might move against you, since the market changes at any time? I will say here that is is only better to trade without setting the s/l when you are monitoring your trade. On the other way round, don't trade without setting the s/l when you know you will not be there...

The trick is to set it low enough that the noisy part of the market signal does not trigger it, giving you a loss when you should have a winner.
the stop loss should not be a normal way to close the trade. It is there for emergencies. Don't trade with it, please. Use it only to stop a really bad trade.

Many in this thread sound like they are recommending suicide, but read them more closely. There is something called "the death trade".

Winner or loser, if you are in front of the screen you should, when it is reasonable to do so, close the trade yourself.

The benefit is not only a rapidly improving skill in managing trades, but better trades over all, as well.
  • #1,984
  • May 6, 2014 8:48am May 6, 2014 8:48am
Quoting Rap Skallion
{quote} beware Saneblane, absolute correlation is very rare of the nineteen pairs I trade, every one has a correlation with three or four others of 80%. that means that sometimes They just don't together. I have encountered several instances where you would expect a pair to move because of correlation and they don't. I strongly suspect that while the market trade total stands at an equilibrium for a while, it is not a noiseless process. New people enter the market all the time, and others depart. The mathematical model is just not that precise....

Funny you said that, because in my last post I said that I didn't talk about everything, and absolute correlation was one. I already know the market is not efficient in many ways otherwise arbitrage trading wouldn't exist, I am currently researching the many inefficiencies of the market so I know a little about it. My analysis was meant to be broad as to be understood by even newbies who read it.
Being a trader is lonely, but being a great trader is lonelier still
  • #1,985
  • May 6, 2014 11:18am May 6, 2014 11:18am
Quoting saneblane
{quote} Funny you said that, because in my last post I said that I didn't talk about everything, and absolute correlation was one. I already know the market is not efficient in many ways otherwise arbitrage trading wouldn't exist, I am currently researching the many inefficiencies of the market so I know a little about it. My analysis was meant to be broad as to be understood by even newbies who read it.

Good. I know how misunderstandings can arrive when you communicate a paragraph at a time.

I enjoy your posts and consider them informative. I just subscribed to you.
  • #1,986
  • May 6, 2014 9:23pm May 6, 2014 9:23pm
Quoting nubcake
{quote} Every asshole with an asshole has ideas. Guess what types of ideas assholes produce. Shit. But, whatever. There are people out there who genuinely believe the Earth is flat. Those people won't be astronauts. Hanover, why are you baiting these people with basic facts and simple logic? They won't get it. They can't get it.
you're an expert on assholes too... that's not going to surprise anyone.
tradewith60
  • #1,987
  • May 9, 2014 3:23am May 9, 2014 3:23am
Speaking of trading without SL and correlations, don't forget pip values. 0.1 lots of EU is not the same as 0.1 lots of UC. Proper trading without stop losses also includes normalizing volatility in your particular pairs. Especially if you pseudo hedge, like many of us in the states have to do.
If you are good at something, never do it for free--Joker
  • #1,988
  • May 9, 2014 3:36am May 9, 2014 3:36am
Quoting jmn5611
Speaking of trading without SL and correlations, don't forget pip values. 0.1 lots of EU is not the same as 0.1 lots of UC. Proper trading without stop losses also includes normalizing volatility in your particular pairs. Especially if you pseudo hedge, like many of us in the states have to do.
The euro/ gbp is about twice the money per pip as the eur/usd last time I looked.
  • #1,989
  • May 13, 2014 7:22am May 13, 2014 7:22am
Interesting Tread,

I actually trade without stoploss. The truth is that many trades that hit our Stoploss are actually profitable trades.
This is how I do it. I have been doing this for more than a monthly with profit weekly.
1. I have a perfect strategy.
2. I trade it on 28pairs on daily chart.
3. I trade with about 0.25%-0.5% of my account per trade.
4. I use rotational hedging when trade goes against me in line with my strategy.

My observations:
1. Even in situations where overall market effect goes against me, the difference is minimal because I have profitable trades to balance up.
2. Less than 20% of my trades are true losses compared to 80% loss when I was using stoploss.
3. I don't trade with tension and I am always able to do accurate thinking and decisions.
4. My overall profitability have been constant.
5.I have no fear of the market.

Thank You And Happy Trading!!!
  • #1,990
  • May 13, 2014 7:32am May 13, 2014 7:32am
Hi Guys
I actually started another thread on this but will kill it, i just saw this thread so here goes...

I was selling Eu/cad Friday night, had been trading for about two hours prior to the CAD unemployment numbers. Been doing well and I had my stop losses ( i had 3 trades open) set to kick me out of my trades (I was manually setting the stop loss as the pair went down) should the market turn. Which it did, no biggie i thought as my stop losses would kick me out, i would have a small retraction but still be in front. (so I thought) Unfortunately all 3 stop losses did not kick in until well past my initial entry points (a few hours earlier) thus, i lost a chunk of my capital and my leverage all gone. My broker blames it on me and the vagaries of forex etc. Has anyone else experienced this? basically the lesson is do not trust in any way any stop loss placed on any trade.... ?
  • #1,991
  • May 13, 2014 7:38am May 13, 2014 7:38am
Quoting Dbanga
Hi Guys I actually started another thread on this but will kill it, i just saw this thread so here goes... I was selling Eu/cad Friday night, had been trading for about two hours prior to the CAD unemployment numbers. Been doing well and I had my stop losses ( i had 3 trades open) set to kick me out of my trades (I was manually setting the stop loss as the pair went down) should the market turn. Which it did, no biggie i thought as my stop losses would kick me out, i would have a small retraction but still be in front. (so I thought) Unfortunately...
Good-day Dbanga, I entered sell on Eur/Cad 4days earlier and I made money from it without stoploss and I closed the trade on friday night.
  • #1,992
  • May 13, 2014 7:40am May 13, 2014 7:40am
Quoting Dbanga
Hi Guys I actually started another thread on this but will kill it, i just saw this thread so here goes... I was selling Eu/cad Friday night, had been trading for about two hours prior to the CAD unemployment numbers. Been doing well and I had my stop losses ( i had 3 trades open) set to kick me out of my trades (I was manually setting the stop loss as the pair went down) should the market turn. Which it did, no biggie i thought as my stop losses would kick me out, i would have a small retraction but still be in front. (so I thought) Unfortunately...
are you talking about slippage? most brokers have allowances for slippage in their terms and conditions.
tradewith60
  • #1,993
  • May 13, 2014 7:53am May 13, 2014 7:53am
Way too much for slippage, i would expect a few (dozen?) pips slippage depending on broker but this was ridiculous.
  • #1,994
  • May 13, 2014 7:54am May 13, 2014 7:54am
and...im looking for another broker.
  • #1,995
  • May 13, 2014 7:56am May 13, 2014 7:56am
Quoting Dbanga
and...im looking for another broker.
in normal market conditions, yes that sounds bad, but not unusual during high impact news releases.
tradewith60
  • #1,996
  • May 13, 2014 8:10am May 13, 2014 8:10am
On Monday and Tuesday I gamble - i.e. trading without a SL.

On Wednesday, Thursday and Friday I trade.

Gambling is also an art that can be learnt - as long as you gamble methodically you can still come out ahead (in the short term at least), barring a freakish scenario in the market. But don't confuse it with trading. The expected value of a trade without a SL i.e. gamble is always your negative maximum account balance.

E(Trade) = Probability of win*win + Probability of loss *loss

when loss is unbounded/approximately unbounded, for every trade your expected value is to lose your account (unless you trade without a take profit too)...

This is true even if you say the market is a equiprobability random walk i.e. probability of up tick and down tick is exactly the same 50/50; in any random walk that continues forever it can be shown that every value from -infinity to +infinity will be reached.
Build good relationships with others.
  • #1,997
  • May 13, 2014 8:30am May 13, 2014 8:30am
Quoting Dbanga
and...im looking for another broker.

What was the name of your last broker ?
  • #1,998
  • May 13, 2014 8:32am May 13, 2014 8:32am
IC Markets
  • #1,999
  • May 13, 2014 9:51am May 13, 2014 9:51am
Quoting dare123
Interesting Tread, I actually trade without stoploss. The truth is that many trades that hit our Stoploss are actually profitable trades. This is how I do it. I have been doing this for more than a monthly with profit weekly. 1. I have a perfect strategy. 2. I trade it on 28pairs on daily chart. 3. I trade with about 0.25%-0.5% of my account per trade. 4. I use rotational hedging when trade goes against me in line with my strategy. My observations: 1. Even in situations where overall market effect goes against me, the difference is minimal because...
My stats are similar. My win ratio is about 75%, I trade 24 pairs but I am not able to hedge so I either kill a trade that goes no where or ride it out as long as its in the long term trend. I determine long term trend by using monthly charts. I agree I have no fear of the market because it cant do anything that would wipe out my account. Just have to hang with the long term trend. Happy trading.
  • #2,000
  • May 13, 2014 11:33am May 13, 2014 11:33am
@Dbanga - you could try Alpari.
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