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Trading Without a StopLoss

  • #2,041
  • May 17, 2014 8:06pm May 17, 2014 8:06pm
Quoting Rtm
The thing is simply not whether you can take a loss but can you let your profits run?? Playing no stop is easy when you only bag > 100pips,
Well what you need is a definition of what a trend is and most traders have a very weak one. Monthly charts makes is clear to me anyway.
  • #2,042
  • May 20, 2014 8:18am May 20, 2014 8:18am
Quoting Naeemqureshi
{quote} Dear Dare123 can you explain it more about your rotational hedging.
Dear Naeemqureshi,

Kindly read the documents on the link below.

http://www.forexfactory.com/showthre...50#post6594550

I trade it in line with my strategy. I use it along with index trading method which tells me if the trend is strong or not.
  • #2,043
  • May 20, 2014 8:34am May 20, 2014 8:34am
Dear All,

Last week was great. The profit for this week has started rolling in. What a Lovely week of profits again.



Happy Trading Without Stop Loss.
  • #2,044
  • May 24, 2014 6:30pm May 24, 2014 6:30pm
Hello,

I have never used stop losses and never intend to use stop losses as a part of any strategy. This is a current problem with my trading record, NO S/L, which make many interviewers ask dumb questions, like, "What if the market turns?" Reply," Predetermined plan of action action resulting in a closed trade" thereby eliminating market turns and substantial losses.

Another way to trade without stop losses is using the "Parabolic S.A.R." (Stop and Reverse). The indicator is represent by dots on your chart, above and below price. Above the price = indicates downtrend: Below the price = indicates uptrend. The price level which the dots are placed can be used for in place of stop losses, (for those of you who preference stop losses) indicator switches sides based on price hitting the dots, which indicate a change in trend.

That is the technical, most of my time is spent looking at market depth Level 2 quotes, followed by candles, RSI, MACD and modified pivot point which is extremely accurate....these indicators and oscillators are not on the same time frame....should be referred to as living pivot points.

I have always reference stop losses as cross hairs for brokerages with deal desks, as your stop loss is viewable by them.

Cheers
Gregory D. Alexandr
  • #2,045
  • Edited 10:57pm May 25, 2014 10:14pm | Edited 10:57pm
Quoting galexandr
Hello, I have never used stop losses and never intend to use stop losses as a part of any strategy. This is a current problem with my trading record, NO S/L, which make many interviewers ask dumb questions, like, "What if the market turns?" Reply," Predetermined plan of action action resulting in a closed trade" thereby eliminating market turns and substantial losses. Another way to trade without stop losses is using the "Parabolic S.A.R." (Stop and Reverse). The indicator is represent by dots on your chart, above and below price. Above the price...
It is reasonable when you have a plan. Yours is fairly simple but straight and to the point. I am in a trade until x,y,z and then I am out. Last week I took a gbp/usd sell because I view the usd to be stronger right now. My trade was too early went 70 pips in the hole. Price came back to my start location later in the week, so the first trade was a BE. My 2nd trade was better placed and made a nice profit of over 50 pips. It is why I use multiple positions like large account traders do. So if I used a 30 pip SL I may have gotten 20 pips from the 2 trades. I use multiple positions and made a 50 pip profit. Today I could see a bounce off of the daily pivot and start my 3rd trade of this USD UT with the GBP. Like you I close when I see long term trend direction change rather than fractions of a penny SL. It works so much better.
  • #2,046
  • May 25, 2014 11:33pm May 25, 2014 11:33pm
Quoting nanningbob
{quote}They hate us because the only profit they will get out of me is the pip spread. You wonder why bluesteele, nubby boy, (I would never put Hanover in this group) come here and spill their vile language all over the screen making sure you dont follow this small group of profitable traders that get it. Some day at some point you will understand the guys who trade with million dollar accounts trade small lots to account size, low leverage, use multiple entrances, follow long term trends, and never trade in a way that puts their account balance...
Wow! Thanks for the affirmation of what I've been doing, man. I'm not going to tell anyone not to use SL's if they're comfortable with them or they need to have them in order to schnooze at night. Using the lot sizes I do (between .25 and .5 times equity), I don't get burned if I'm initially incorrect or my timing is slightly off, and I can add additional, more favorably timed/priced positions without having a heart attack every time I open the trading platform. I would probably not do this if I was trading 1x equity or more. For the past month, every trade I've made in a pair has been net profitable, although I've sometimes had to take two or more positions in order for this to occur, which I am more than fine with, given the size of the lots I'm dealing with. While this is purely anecdotal, the use of recommended stops (ATR, last swing low/high, etc.) for me has actually resulted in the loss of more money than were I to have just stuck to my reasonable TP without the stop; that is truly letting the trade breathe (which is what analysts overwhelmingly recommend).

I am sure there are those who will criticize by saying, "Well, maybe you just don't know how to set a proper stop ... ." That may be true; I may have experienced losses because the stop was too tight, etc. Point in fact is, though, I no longer worry about whether the stop is too tight or wide; the only thing I worry about is whether the TP is reasonable in light of the circumstances and whether I have identified what a given pair is doing over a particular time frame (ranging, trending, or breaking out). From my point of view, not setting a SL removes one more factor from my decision making process; the simpler, the better ... .

Happy trading!
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,047
  • May 26, 2014 5:33am May 26, 2014 5:33am
Quoting ZebraSquirl
{quote} Wow! Thanks for the affirmation of what I've been doing, man. I'm not going to tell anyone not to use SL's if they're comfortable with them or they need to have them in order to schnooze at night. Using the lot sizes I do (between .25 and .5 times equity), I don't get burned if I'm initially incorrect or my timing is slightly off, and I can add additional, more favorably timed/priced positions without having a heart attack every time I open the trading platform. I would probably not do this if I was trading 1x equity or more. For the past...
Why you can be successful with what you are doing.
1. The market ranges over 70% of the time. Just this one stat guarantees your trade to be profitable or BE over 70% of the time.
2. Of the trades that trend most trends are short lived and only run for a short period of time, like a couple of weeks before a retracement that gets you out of trouble.
3. Of the ones that run and run, most of those will be positive swap trades like the aud, nzd, and sometimes the chf. You dont want to be on the wrong end of one of their runs. I very seldom trade against the aud, nzd swap and have a quick trigger in closing the trade when I do.
4. What is left is a very small amount of trades that can just run on you and cause long term trouble or damage to your account. Most of those the news lets you know a big story has happened and you can get out anyway.

So, if you know this stuff and can close out a bad set of trades when you recognize you just made a bad trade in the wrong direction. Then you can confidently trade like this. Sure you take a bad set once in a while but I found that the 70%+ win ratio more than covers my really bad mistakes. So if you can discipline yourself to close out a trend change direction (that really should be your SL area) then you arent worried about a trade or a set of trades.
  • #2,048
  • May 26, 2014 1:54pm May 26, 2014 1:54pm
Quoting nanningbob
{quote} Why you can be successful with what you are doing. 1. The market ranges over 70% of the time.
My sentiments exactly ... .

For example, I am in one of those "bad" trades now -- a long AUD/USD position where breakeven is at .92732 (current price .92414). While I am looking to cut my losses on that trade, I have no need to panic given the small number of lots on the table. I am comfortable with either waiting for a bounce higher within its current range to exit or to add to the position if it looks like its going to break above its current "box." By the same token, the pair may break below .9200, at which point the stop-lossers would say, "Well, I told you so" to which I would reply, "Well, not so fast; there may be another buy opportunity here." I am perfectly comfortable with waiting for a so-called "bad" trade to present another opportunity in the original direction of the trade that may ultimately result in a net positive position, even though I dislike holding a position for the period of time that this often requires. (This is usually considered contrarian, since I am adding to a "bad" trade.)

I would also note that I am also almost never hanging my hat on a single trade; there are invariably numerous positions in the portfolio at any one time. Some may be doing great; some so-so; and some not so great. I do not hesitate to close out the whole basket on a net positive note even if I have a couple dogs in there weighing the thing down. (This is also somewhat contrarian, since the general advice is to kill the dogs early and let the fast ponies run.)

Naturally, I would like to make a gajillion pips on each trade I make. However, with the low volatility and lack of follow-through we've seen of late, I am more than satisfied to do a larger number of small trades that earn small rather than waiting for the one trade that is going to make my day, week, month or whatever. More power to the guys that make the 1-2 risk-reward ratio and SL's work for them ... . Just not my cup of tea.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,049
  • May 26, 2014 2:04pm May 26, 2014 2:04pm
And, oh, what a slow trading day. Shoulda known with the U.S./U.K. holidays. Worse than watching paint dry.

Which is probably why it's a good day to shut down ... . See everyone in the Asian sesh ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,050
  • May 26, 2014 2:37pm May 26, 2014 2:37pm
In my opinion, people complaining about the stop loss for their losses is equivalent to someone who has been in a car accident complaining that the seat belt gives them whiplash.

I've said it before but will say again, the stop loss is not the problem. The stop loss actually helps you. If you find your stop keeps getting hit then you are making bad trades and/or putting your stop loss in the wrong position.
  • #2,051
  • May 26, 2014 5:09pm May 26, 2014 5:09pm
I wonder if there is a relationship between the slowness of a day of trading and the number of posts one sees on FF....
  • #2,052
  • May 26, 2014 5:20pm May 26, 2014 5:20pm
Quoting SupraSense
In my opinion, people complaining about the stop loss for their losses is equivalent to someone who has been in a car accident complaining that the seat belt gives them whiplash. I've said it before but will say again, the stop loss is not the problem. The stop loss actually helps you. If you find your stop keeps getting hit then you are making bad trades and/or putting your stop loss in the wrong position.
Unless you donīt have a "good" broker.........
  • #2,053
  • May 26, 2014 5:35pm May 26, 2014 5:35pm
Quoting ZebraSquirl
{quote} My sentiments exactly ... . For example, I am in one of those "bad" trades now -- a long AUD/USD position where breakeven is at .92732 (current price .92414). While I am looking to cut my losses on that trade, I have no need to panic given the small number of lots on the table. I am comfortable with either waiting for a bounce higher within its current range to exit or to add to the position if it looks like its going to break above its current "box." By the same token, the pair may break below .9200, at which point the stop-lossers would...
Well the AUD is so tied up with the Chinese economy. If it continues to slow down it will drop some over the long term. However, I dont know if you ever use a strength of currency indi or not but the aud and nzd usually run the opposite of the yen. So if the Yen goes down they go up and if the Yen goes up aud nzd will go down. This will be true about 10 of the 12 months in a year. So with BOJ dedicated to making sure the YEN doesnt lose its depreciation over the last year and their willingness to increase their bond sales I expect the aud and nzd to show some strength this summer. I am looking for the turn up so I can enter some buys. So what I want to see is the jpy to start weakening again after nearly a 2 month period of slow strengthening. I am looking for that to happen over the next week or two and then on into the summer.
  • #2,054
  • May 26, 2014 6:00pm May 26, 2014 6:00pm
Quoting SupraSense
In my opinion, people complaining about the stop loss for their losses is equivalent to someone who has been in a car accident complaining that the seat belt gives them whiplash. I've said it before but will say again, the stop loss is not the problem. The stop loss actually helps you. If you find your stop keeps getting hit then you are making bad trades and/or putting your stop loss in the wrong position.
Depends what you mean by using a SL. Mine is the long term trend so I dont place one on my chart. If the long term trend changes then I close out and go the other way. If you mean the fraction of a penny SL commonly used and taught then there is no such thing as placing your SL in the right position. Forex is NOT about traders. It is about business and money exchange between govt. businesses and individuals. That is why trillions flow every day. If you think you know when Toyota, GM, Volkswagen are cashing their checks for business based on some chart, you are high. Exxon, Mobil, British Petroleum, due tons of transactions every day. USA sends aid over seas to other countries and they cash their checks, on and on it goes. France, China, USA, Russia make military sales. You dont know when these transactions are going to clear nor does anyone else. Your SL placement to a fraction of penny with these things going on IS the major reason people fail in this business. High leverage, large lot size to account size, the one in one out philosophy of trading, kills your chances of being a long term consistent winner. People throw around stats but brokers are suppose to file quarterly their percentages of winners to losers. Their stats show 25-35% that people made money. Most of them the wins are not that big and most of the rest are not winners again from quarter to quarter. Very few traders can consistently win from year to year. The ones who do, the ones who run the big accounts. They will trade low leverage, often use multiple entrances, use smal lots to account size, and generally trade long term or follow a trend direction over weeks and months.

If you dont believe me study the COT reports. These are the really big boys. You will notice they are usually between 45-55% range in their buys and sells. You mean to tell me 45% of them are on the wrong side of a trade with a 30 pip SL. Your a fool to believe such a thing. OR do they use a strategy that gives them room for their trades to run. I choose the 2nd. Compare how you trade with how they trade. It is an eye opener and seldom talked about or discussed here or at any other forum. Good luck with your study.
  • #2,055
  • May 26, 2014 6:23pm May 26, 2014 6:23pm
Ive placed 3 D1 trades today.

With NO SL or TP.

I will have a look tomorrow and then decide if and where to place the SL.

Till i started to behave so im much more profitable and have much less trades stopped out..
Aaand, wait and patience is the key.



Also important, to have enough $$ in your account to can afford this kind of trading..
Or simply trade smaller lots..

Greets..
How to opt out annoying user signatures ??
  • #2,056
  • May 27, 2014 12:50am May 27, 2014 12:50am
Quoting nanningbob
{quote} Well the AUD is so tied up with the Chinese economy. If it continues to slow down it will drop some over the long term. However, I dont know if you ever use a strength of currency indi or not but the aud and nzd usually run the opposite of the yen. So if the Yen goes down they go up and if the Yen goes up aud nzd will go down. This will be true about 10 of the 12 months in a year. So with BOJ dedicated to making sure the YEN doesnt lose its depreciation over the last year and their willingness to increase their bond sales...
One of my fav trades is long AudJpy - just set and forget and collect the positive swap.
  • #2,057
  • May 27, 2014 2:04am May 27, 2014 2:04am
Quoting nanningbob
{quote} Well the AUD is so tied up with the Chinese economy. If it continues to slow down it will drop some over the long term. However, I dont know if you ever use a strength of currency indi or not but the aud and nzd usually run the opposite of the yen. So if the Yen goes down they go up and if the Yen goes up aud nzd will go down. This will be true about 10 of the 12 months in a year. So with BOJ dedicated to making sure the YEN doesnt lose its depreciation over the last year and their willingness to increase their bond sales I expect the aud...
Good posts: this and your following one:

Longest term there may be some hope for the Aussie with the elections in India. When you have a country where large populations have a problem getting food, yet as much as 30% of the crops rot in the fields because the infrastructure is so poor they can't get them to market in time- it seems the only way is up.

India: Australia's other customer could possibly provide them with the versatility they need to be less dependent on the people directly north.

I see consolidation now, with possible advancement in the future, depending on India's prospects. Confirmation will come quickly, but advancement slowly.
In the meantime keep an eye on the aussie yen..

(And no fixed stop loss: ask yourself, what will your margin bear? Set a limit on the margin percent, and as you approach it, drop your lot size, until it increases again: just a suggestion - one way carry trades through loss into profit. Have a set of criteria in place that will allow you to say " this trade is going no place soon. I can make more money ditching it and putting my margin in other ones." Go anti-martingale!
  • #2,058
  • May 27, 2014 3:23am May 27, 2014 3:23am
[quote=nanningbob;7492975]{quote} Depends what you mean by using a SL. Mine is the long term trend so I dont place one on my chart. If the long term trend changes then I close out and go the other way. If you mean the fraction of a penny SL commonly used and taught then there is no such thing as placing your SL in the right position. Forex is NOT about traders. It is about business and money exchange between govt. businesses and individuals. That is why trillions flow every day. If you think you know when Toyota, GM, Volkswagen are cashing their checks for business based on some chart, you are high. Exxon, Mobil, British Petroleum, due tons of transactions every day. USA sends aid over seas to other countries and they cash their checks, on and on it goes. France, China, USA, Russia make military sales. You dont know when these transactions are going to clear nor does anyone else.


Excatly
57 % of trading is done dayly by only 10 big banks...who trade for themselves and other big ones,you can Wikipedia it...it varies dayly...add some hedge funds,big companies, etc...Big Boys game...their algos will, and must run stops for liquidity...(retailer meat)
Thatīs whay short term trading is close to imposible in the long run.
And yes, long trends, wide stops, small multiple entries, they all increase your chances big time.
This is my first profitable year, since 10, over 60 trades...60% winners....mostly due to trading in the direction Nanningbob explains...
"Liquidity hunting" is so obvious, pick any chart , including weekly, and you will see how most of the trends start with a stop run...go to 5 minutes, 1 hour, and it happens many times a day.....Big Boys business as usual...
  • #2,059
  • May 27, 2014 6:32am May 27, 2014 6:32am
Quoting Rap Skallion
{quote} Good posts: this and your following one: Longest term there may be some hope for the Aussie with the elections in India. When you have a country where large populations have a problem getting food, yet as much as 30% of the crops rot in the fields because the infrastructure is so poor they can't get them to market in time- it seems the only way is up. India: Australia's other customer could possibly provide them with the versatility they need to be less dependent on the people directly north. I see consolidation now, with possible advancement...

Thanks. Yes I am just learning that technique recentle. I have been a gbp/cad range trader for several years now. Well, if broke its range and went on a 1000+ pip run. I closed out the breakout loser that went against me but played back into its range a tad early. To lessen margin investment I started trading smaller lots until I found its new range area and then started closing up the hole. Now I am sitting good with it again. With the positive swap I eventually got back on the positive side of this series of trades.

Anyway if you dont believe me some institutional traders provide some insights into their trading habits. They have some similar thoughts but with some differences of their own and I think learning from them would be useful. Great thread to go read.


http://www.forexfactory.com/showthread. ... ost7493497
  • #2,060
  • May 27, 2014 6:37am May 27, 2014 6:37am
Quoting Rap Skallion
{quote} Good posts: this and your following one: Longest term there may be some hope for the Aussie with the elections in India. When you have a country where large populations have a problem getting food, yet as much as 30% of the crops rot in the fields because the infrastructure is so poor they can't get them to market in time- it seems the only way is up. India: Australia's other customer could possibly provide them with the versatility they need to be less dependent on the people directly north. I see consolidation now, with possible advancement...
Thanks for the heads up on India possibly filling in some of the gap of lost trade with China. I will have to do some research there and determine whether in the long run they can help keep the AUD price up in the 90 range. If so I wont be so worried about buying the thing like I have been recently with all the slow down talk from China. Thanks.
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