Real Fx traders do not use stoploss | Page 19 | Forex Factory

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Real Fx traders do not use stoploss

  • #361
  • Jun 27, 2014 12:39pm Jun 27, 2014 12:39pm
As a reply to post 358,

Since the time frame is very limited, and the trades are based on 1hr trends, I'd say SL at the low of the previous hour would make sense. Especially if the systems is not paying attention to longer time frame support/resistance levels. As a way to protect yourself if a big move happens before the hour ends.
  • #362
  • Jun 29, 2014 7:39pm Jun 29, 2014 7:39pm
Quoting EricTrade
Does one need a stop loss if the position is always held for a single bar? For example: Timeframe: 1 hour bars (every hour the system makes a trade/no trade decision) If the system decides to make a trade, then no matter what, the position will be closed in the bar immediately after it was opened. So if a position was opened at 10:00 am, then it will be closed at 11:00 am. Would a a stop loss be needed in the above scenario?
This would be an interesting approach to trading. Be that as it may, if you drill down to smaller time frames, you will easily see that price can move significantly against you in even a five minute period. The candle is just a representation of what is occurring with price in the chosen time frame.

So the short answer is that it doesn't matter what time frame you're using and whether you'll close the trade out at the time the candle for the time frame you're looking at closes or immediately thereafter; a stop loss should be set if that is the way you manage your risk.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #363
  • Jun 29, 2014 7:56pm Jun 29, 2014 7:56pm
Me, personally, I generally do not use stop losses except where I want to guarantee a break even proposition after the trade has moved into the money. I would note that this is a totally contrarian approach and violates everything I learned in the early stages of my forex trading. Quite frankly, however, I got tired of being stopped out on trades with SL's only to find price hitting my target shortly thereafter. In short, and this is purely anecdotal, I felt I was losing money with SL's I thought were by the book and that kinda pissed me off.

That being said, the general rule is (1) set a stop loss at the daily ATR, slightly below support (for a buy), slightly above resistance (for a sell), or at a previous swing high or low; (2) move the stop to break even when the trade is in the money and the stop is a reasonable distance from price to allow the trade to breathe; and (3) take a portion of the lot off the table when the trade is in the money, allowing the remainder of the trade to continue running toward a reasonable price target.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #364
  • Jul 2, 2014 8:28pm Jul 2, 2014 8:28pm
it takes a high level of patience not to use SL in trade
  • #365
  • Jul 2, 2014 9:36pm Jul 2, 2014 9:36pm
SL opens your trade to attacks from your broker, so I got to try to look at where they are taking out SLs... still learning!
  • #366
  • Jul 7, 2014 8:22am Jul 7, 2014 8:22am
Inserted Video


Real traders don't use stops?
  • #367
  • Jul 7, 2014 8:56am Jul 7, 2014 8:56am
On that video he's trading stocks, not forex...those kind of moves in forex are only around news events..in stocks and futures they can happen much more vigorously as I've read
  • #368
  • Jul 7, 2014 5:13pm Jul 7, 2014 5:13pm
Quoting BirminghamUK
http://www.youtube.com/watch?v=B8cN586JUR8 Real traders don't use stops?
Great video, both funny and painful to watch.

I don't know if a stoploss would have saved him, though, price was plummeting so quickly, and the video doesn't tell us anything about available liquidity.
  • #369
  • Jul 7, 2014 5:32pm Jul 7, 2014 5:32pm
Quoting BirminghamUK
http://www.youtube.com/watch?v=B8cN586JUR8 Real traders don't use stops?
Depends what you mean by a real trader - ask Nick Leeson. Good vid as Hanover says.
  • #370
  • Jul 7, 2014 6:01pm Jul 7, 2014 6:01pm
Quoting merquise
On that video he's trading stocks, not forex...those kind of moves in forex are only around news events..in stocks and futures they can happen much more vigorously as I've read
If you trade news events, don't use stoploss.
  • #371
  • Jul 7, 2014 6:42pm Jul 7, 2014 6:42pm
Quoting BirminghamUK
http://www.youtube.com/watch?v=B8cN586JUR8 Real traders don't use stops?
OH ... MY ... GOD ... . I've gotta laugh and cry at the same moment ... .

Smaller positions, my friend, smaller positions ... .

... the number of F-Bombs you use during the life of a trade is directly proportional to your position size ... I try to limit my positions to one F bomb ...

(Still ain't usin' stops).
Fireworks are fun ... as long as you don't blow your fingers off.
  • #372
  • Jul 7, 2014 8:31pm Jul 7, 2014 8:31pm
I have personally found that by not placing Stop Losses anymore, that I am no longer being affected by spikes and other unseen calamities. A few months ago I was trading a currency pair, when a very large downward Spike occurred on a NZD$150k long position. My position closed as it should have, but the dismay I felt when the price immediately came back up and passed where my position had been and then went higher, was needless to say very painful. Because of this lesson I no longer place SL's and my Trading account has shown a significant improvement. Nonetheless I now find that my Technical Trading has had to improve along with an awareness as to when important news reports are coming near. All in all if you are up to speed with a sound trading strategy it can be worthwhile to trade without an SL. However I will always set a TP.
  • #373
  • Jul 8, 2014 5:02am Jul 8, 2014 5:02am
Quoting merquise
On that video he's trading stocks
This is stocks again I'm afraid but I can't help but feel sorry for this guy.

Inserted Video
  • #374
  • Jul 8, 2014 6:07am Jul 8, 2014 6:07am
What if happened global event like wars on weekend? Can you handle 200 pip gap on open price of currencies ? Never risk on weekend, you can reopen same position on market open via ea.. Same logic on stop loss, what will you do on morning you see yesterday's trade goes against you 200 pip on some big event? Always calculate your risk on every position and use SL..
  • #375
  • Jul 9, 2014 12:14am Jul 9, 2014 12:14am
I'm not using SL as well. But I'm playing with my MM.. I'm calculating my lot size so that my free margin can endure 1500 pips of market movements against my initial trade direction....
  • #376
  • Jul 10, 2014 1:10am Jul 10, 2014 1:10am
Professionals do not put stops in the market. That is not to say that they do not have stops. On session close, if their risk tolerance is skewed, they will stop some trades.
If you are good at something, never do it for free--Joker
  • #377
  • Jul 10, 2014 1:59am Jul 10, 2014 1:59am
Real FX traders control risk.

Controlling risk involves either a hard stoploss, or manual/mental stoploss.

/thread.
  • #378
  • Jul 10, 2014 3:54am Jul 10, 2014 3:54am
its hardly a definition of real traders when 95% of traders use stop loss LOL but i guess it can be a part of a strategy or a well controlled environment
  • #379
  • Jul 10, 2014 8:11pm Jul 10, 2014 8:11pm
Quoting d0ta
Real FX traders control risk. Controlling risk involves either a hard stoploss, or manual/mental stoploss. /thread.
+1
  • #380
  • Jul 10, 2014 9:55pm Jul 10, 2014 9:55pm
Hell I really feel for that Guy on the video. However it appears he had not done any Technical and or Fundamental preparation, (other then what he had heard second hand) he just jumped in and bought it... YEOWW.
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