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Trading Without a StopLoss

  • #2,001
  • May 13, 2014 12:41pm May 13, 2014 12:41pm
Quoting Dbanga
and...im looking for another broker.
There are other methods to protect you than using a fixed stop loss
- If you are the nervous type , put one 300 p down or so out of the way .
if there is news and the move is against you, more than likely it will come back at least part way in the next hour.

The same holds true with a fixed take profit . Many times price will come right up to it, and then go back into loss without activating it.

Those fixed levels are really not for trading. They are there to protect you in case something big is going on and you are not at screen to take care of it.

They do not always work. Servers go down. Once a day the market closes for rollover calculations. Every weekend the market is closed. During news events spreads widen, and big slippage can occur. Your broker may be not up to par. Changing to a large broker like Oanda, IBFX, or others you see prominent in ff is advisable. Smaller brokers have been known to go bankrupt. There is no FDIC in the forex.
  • #2,002
  • May 13, 2014 3:59pm May 13, 2014 3:59pm
Quoting vector
@Dbanga - you could try Alpari.
Thnaks for the sugestion but i see Alpari made a 10M pound loss for 2013. I might steer away from them for now.
  • #2,003
  • May 13, 2014 5:07pm May 13, 2014 5:07pm
Quoting shellsnail
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...
Say you flip a weighted coin: say it comes down twice as often heads as tails in the longest run. Mathematically this still can be true if it comes down tails a thousand times in a row ( before, say it comes down heads 2000 times). There is nothing to stop this. Ruination can still occur even if you have a reasonable , dependable,edge.

So you need to put some kind of system in place to close a trade before it ruins you. If (condition) then close trade. ( Maybe this should be in the plural). This can be programmed, this can be mental and manual. Nothing is 100% dependable, but risk can be reduced to a reasonably negligible percentage (say below that of being struck by lightning).
fixed take profits and fixed stop losses are the most abused techniques in trading. there are other more reasonable techniques that have been around for decades.

Essentially sir, you and I are in agreement. Just keep your margin down in safe territory and you can do just about anything and still survive.
  • #2,004
  • May 13, 2014 5:11pm May 13, 2014 5:11pm
Quoting shellsnail
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

Hahahah Lmao So Monday and Tuesday you gamble. That's some funny stuff man.
Being a trader is lonely, but being a great trader is lonelier still
  • #2,005
  • May 13, 2014 5:15pm May 13, 2014 5:15pm
Quoting nanningbob
{quote} 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.
Bingo!
  • #2,006
  • May 13, 2014 9:09pm May 13, 2014 9:09pm
Quoting saneblane
{quote} Hahahah Lmao So Monday and Tuesday you gamble. That's some funny stuff man.
haha... doesn't mean they've to be on the same account or the same size; it provides good entertainment LOL, serve as a constant reminder for me of the distinction between trading and gambling and also prevents me from "over-trading" where it matters.
Build good relationships with others.
  • #2,007
  • May 13, 2014 11:21pm May 13, 2014 11:21pm
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...
To the one not using SL,
Goodluck on your strategy, if you think your making money with your ideas and observation go on with it.
Just trading is hard to master. I have to talked to different traders and some of them been doing it for more than 10 years. Most of them said "HARD to Predict" Anyway there's always another day in trading. Being FEARLESS in the market if mean a lot to your decision. Have a nice day ahead.
HAPPY TRADING!!
  • #2,008
  • May 14, 2014 2:59am May 14, 2014 2:59am
Hi all,

I think stop losses are 100% overrated.

When trading it is important to look at news events that can take you out of trades. I suppose it depends on what term trader you are.

Stop losses are not needed if you trust yourself. Enough said.
  • #2,009
  • May 14, 2014 4:55am May 14, 2014 4:55am
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...
Without stoploss my live account is green again this week.Profit growing large again this week.
  • #2,010
  • May 14, 2014 5:41am May 14, 2014 5:41am
Quoting dare123
{quote} Without stoploss my live account is green again this week.Profit growing large again this week.
Actually, though I told myself that SL is important. I'm trading without SL too.
I failed many times for not having a SL yet I've learned. Like now....I'm just trying to control my fear.
  • #2,011
  • May 14, 2014 7:25am May 14, 2014 7:25am
There are 2 very similar results from trading with or without stop losses.

There should be no real MATERIAL differences in the end results, your net profit/loss.

Trading without S/L means you trust yourself, it's just a way of trading that is based on experience. In the end, setting or not setting an exact S/L is not a big deal. It is not the reason you are profitable or not. Physically setting a S/L or not doesn't separate the good traders from the bad. There are other reasons.......
  • #2,012
  • May 14, 2014 9:49am May 14, 2014 9:49am
Quoting Sammowammo
There are 2 very similar results from trading with or without stop losses. There should be no real MATERIAL differences in the end results, your net profit/loss. Trading without S/L means you trust yourself, it's just a way of trading that is based on experience. In the end, setting or not setting an exact S/L is not a big deal. It is not the reason you are profitable or not. Physically setting a S/L or not doesn't separate the good traders from the bad. There are other reasons.......
Hello Sammowammo,
"It is not the reason you are profitable or not. Physically setting a S/L or not doesn't separate the good traders from the bad. " . There are many profitable trades what will hit your stoploss due to price spike, which as a result many traders end up lossing 40-50% of their trades that would have been closed in profit.
  • #2,013
  • May 14, 2014 11:35am May 14, 2014 11:35am
Quoting dare123
{quote} Hello Sammowammo, "It is not the reason you are profitable or not. Physically setting a S/L or not doesn't separate the good traders from the bad. " . There are many profitable trades what will hit your stoploss due to price spike, which as a result many traders end up lossing 40-50% of their trades that would have been closed in profit.
Trades are only profitable if you close them in profit. Problem with trading without stop-loss is that you might never get to the point where these trades can be closed for profit. Not saying it can't be done, but mathematically it's a given that so long as you trade with a take profit in place (but without a SL), the expected value of every trade is to lose your entire account balance.

But people say prefer trading w/o a SL because we humans have a convex loss function - risk-loving in losses - which implies that you are willing to take on more risk to avoid losses. It's a psychological trait. Conversely, we are risk-adverse in gains; by nature we don't like taking on risk to achieve gains.

Good trading requires learning how to move against this nature. A linear function probably works best.
Build good relationships with others.
  • #2,014
  • May 14, 2014 3:47pm May 14, 2014 3:47pm
SL have cost me so much money. Also operator error on my part. Stop loss Is like Workmans Comp benefits. Sales gimmick. Anyway I decided to start finding a method to remove stop loss worry from MY trading.

what I have come up with I call Touch Probability. I draw a median line threw say the last 110 daily candles and two paralell lines threw an upper median and lower median. Share a look with pitchfork except not trying braket the price.

ill finish this in a bit typing on IPhone sucks
  • #2,015
  • May 14, 2014 5:15pm May 14, 2014 5:15pm
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.
If your broker is counterparty, is the best option but you must be 100% aware while the position is open
  • #2,016
  • May 14, 2014 6:42pm May 14, 2014 6:42pm
Quoting shellsnail
{quote} Trades are only profitable if you close them in profit. Problem with trading without stop-loss is that you might never get to the point where these trades can be closed for profit. Not saying it can't be done, but mathematically it's a given that so long as you trade with a take profit in place (but without a SL), the expected value of every trade is to lose your entire account balance. But people say prefer trading w/o a SL because we humans have a convex loss function - risk-loving in losses - which implies that you are willing to take...

The thing to overcome this risk loving in losses is to view the close in loss of balance a win this way: Equity does not change, when you close a loss. Balance is just a number, and equity is the real value. Margin is improved by any closure. Free margin improves when you close a trade with loss of balance. Improving the margin % ( margin to equity ratio) improves the overall health of your system and your ability to make money with what you actually have, your equity.

There are disadvantages to linear functions in that if you decrease the size/ or number of trades on loss of equity, you lose some of the ability to make the money back. If you don't decrease the percentage of equity involved in a trade, you lose all the money you gained in one set of trades in an equal set of losing ones.

Suppose you had five winning trades giving you an equity gain of 500$. Wouldn't it be better to reduce the percentage of the trades to balance so that five losing trades do not lose you back the 500$, but 5 more winning trades give you another 500$? Some non-linear strategies may well be better in the long run than linear ones...
  • #2,017
  • May 15, 2014 8:40am May 15, 2014 8:40am
Hello everyone, first post whoo hooo!! I figured I'd chime in on this one since the thought has crossed my mind lately. First of all I'm a novice by all means so take my words for what they are. On my quest for knowledge I've frequently heard of the idea that brokers move prices to break through stops. Especially after a big move when those on the losing side decide to tighten up the stops and wait to see if things turn around (done this myself plenty of times). They spend X amount to move the price 5pips, blows out 1000 stops to make the 10 times as much for example. At least that's my theory.

What I'm noticing with my broker is that a stop loss always triggers a few pips earlier than a take profit. Almost looks like a computer glitch. To the contrary I've watched the price break straight through a take profit without triggering it to the point where I had to close the order myself. Now I understand the concept of latency and such but I refuse to believe that this is pure coincidence. What I'm doing now is avoiding really tight stops that seem like common sense, because likely 100's of others have stops in the same place. This gives the broker incentive to move the price a few pips (which I believe they can) to blow out all those stops. They make money every time. Due diligence is the key I guess. I'll never not use stops at all but ultimately the situation dictates.
  • #2,018
  • May 15, 2014 9:24am May 15, 2014 9:24am
Quoting pipcipher
Hello everyone, first post whoo hooo!! I figured I'd chime in on this one since the thought has crossed my mind lately. First of all I'm a novice by all means so take my words for what they are. On my quest for knowledge I've frequently heard of the idea that brokers move prices to break through stops. Especially after a big move when those on the losing side decide to tighten up the stops and wait to see if things turn around (done this myself plenty of times). They spend X amount to move the price 5pips, blows out 1000 stops to make the 10 times...
Hi pip, it's nonsense the broker triggering stops by moving price, banks may position themselves to find the liquidity to fill a clients order by using it's funds, but your broker is certainly not doing that. If on the other hand the broker is slipping your orders then just move to another broker.

Have a look at this video, it will give you a good feel for what is really going up further up the chain... good luck and don't take too much notice of retail chatter, our main advantage is we don't have to follow any rules and can still make money
Inserted Video
tradewith60
  • #2,019
  • May 15, 2014 5:05pm May 15, 2014 5:05pm
During my early trading days, the lack of stoploss was the cause of my account being wiped out within a week.

I have now set my stop loss to target price ratio to at least 1:2
  • #2,020
  • Edited 6:54pm May 15, 2014 6:27pm | Edited 6:54pm
Are you sure it was because you traded without stop loss, or was it because your lot size was too large?

I started out with stop loss and lost money. Tried 1;2 r r ratio and lost money. Tried fibonacci schemes and stochastic , with stoploss and lost money.

Went to what I thought were tiny lot sizes and started leveling out. Went to trading 19 pairs and started making consistent money.

I close trades in loss when I need room with margin for more profitable trades. I go shopping for the cheapest trade per lot size that won't make money soon and close that, until my margin percentage gets above 2.00% and free margin is bigger than margin.

If I were uncomfortable, I can always place stop loss some 300 pips away: That way I am not trading with it. Just using it to stop trading.

I have seen too many times where a pair will go into profit, stop just short of the "target" and turn around into loss, so I use TP only to put money in my pocket when I am away from screen.

Else my system is just to give me good opportunities to Scalp.

When you are in profit, forget about R;R watch the tick screen and when it turns sufficiently against you. close the trade.
Then look and see if this is the best trade available from all the pairs. If not, trade that other one.
4 days out of five I make over 100 pips a day. The fifth day, I have to give some ( usually 40, 50) back to protect my margin.

There is a lot more to the system than this:
There is money management: I use an antimartingale system of bid size and trading numbers. Read through the posts on the thread about how to trade without fixed stop loss.

you will learn about a lot of ideas. Not just about stoploss. Many of them can be used with stoploss. I just find it more profitable to keep fixed stoploss from interfering with otherwise winning trades.

Don't just follow these things: study and see the reason behind them. Stay small until you can profit dependably Watch lots of pairs but trade only the very few best opportunities. Find your comfort zone. The way I trade I find to be fun, but I understand this way can make someone of different outlook and temperament miserable.
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