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Real Fx traders do not use stoploss

  • #381
  • Jul 10, 2014 11:03pm Jul 10, 2014 11:03pm
Not only does a stop loss control risk, which is your primary goal as a consistently profitable trader, it also gives you a metric for quantifying the quality of trades you take in the form of expectancy and risk:reward.

I can almost guarantee your failure if you're not pre-defining risk in a trade.
  • #382
  • Jul 13, 2014 2:42pm Jul 13, 2014 2:42pm
Quoting TradeDream
Not only does a stop loss control risk, which is your primary goal as a consistently profitable trader, it also gives you a metric for quantifying the quality of trades you take in the form of expectancy and risk:reward. I can almost guarantee your failure if you're not pre-defining risk in a trade.
I never use a stp loss and guess what my account is growing ,ones I bought 3mths ago are now in profit so using a stoploss would have taken them and of course I see no one talking about the SWAPS on trades I use the positive swap so I win twice profit and the swap getting ideas from books does not mean they are right , don't be the brokers friend with stoploss
people leave, but this thread will go on for ever
  • #383
  • Jul 20, 2014 6:01pm Jul 20, 2014 6:01pm
Quoting Aussi
{quote} I never use a stp loss and guess what my account is growing ,ones I bought 3mths ago are now in profit so using a stoploss would have taken them and of course I see no one talking about the SWAPS on trades I use the positive swap so I win twice profit and the swap getting ideas from books does not mean they are right , don't be the brokers friend with stoploss
I don't understand why these guys come to the No SL forums and try to talk me out of not using a stop loss ... . Getting old.

Keep it up, Aussi. (And positive swap is awesome!!).

P.S. -- And TradeDream's Trade Explorer doesn't make it look like he's making effective use of those SL's anyhow ... . Even on a demo ... . Lol.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #384
  • Jul 20, 2014 6:09pm Jul 20, 2014 6:09pm
Quoting cenetti
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.

I am new to this - so I hope someone can answer.


Say one is trading on 1 hour bars. At the end of the bar Time 0, you make a decision to trade at the open of the next bar. At the next bar, Time 1, you submit a buy market order. At the next bar, Time 2, you close the position opened at Time 1. Your trading system always follows the above scenario.

In the above scenario, how would one open a stop loss? Would the stop loss be opened at Time 1, along with the market buy order? Is that even possible? Don't you have to wait until the market order is opened before placing the stop loss?
  • #385
  • Jul 20, 2014 6:31pm Jul 20, 2014 6:31pm
Quoting EricTrade
{quote} I am new to this - so I hope someone can answer. Say one is trading on 1 hour bars. At the end of the bar Time 0, you make a decision to trade at the open of the next bar. At the next bar, Time 1, you submit a buy market order. At the next bar, Time 2, you close the position opened at Time 1. Your trading system always follows the above scenario. In the above scenario, how would one open a stop loss? Would the stop loss be opened at Time 1, along with the market buy order? Is that even possible? Don't you have to wait until the market order...
Most platforms permit the setting of a stop (and a limit or target price) at the time the order was made, even if it is a "market" order. You should not have to wait until the market order executes to set a stop.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #386
  • Jul 20, 2014 7:32pm Jul 20, 2014 7:32pm
Quoting TradeDream
Not only does a stop loss control risk, which is your primary goal as a consistently profitable trader, it also gives you a metric for quantifying the quality of trades you take in the form of expectancy and risk:reward. I can almost guarantee your failure if you're not pre-defining risk in a trade.
I would to respectfully comment that stops do not control risk, position sizing does. If you put stops in the market at "logical" places, they are going to get run if you are unlucky enuf to put your stops where big boys have placed theirs. Institutional traders have admitted as much. Better to lower your position size and let the market do it's thing. Trade around the DD and be consistent, and most traders will be fine.
If you are good at something, never do it for free--Joker
  • #387
  • Jul 20, 2014 8:18pm Jul 20, 2014 8:18pm
Quoting jmn5611
{quote} I would to respectfully comment that stops do not control risk, position sizing does. If you put stops in the market at "logical" places, they are going to get run if you are unlucky enuf to put your stops where big boys have placed theirs. Institutional traders have admitted as much. Better to lower your position size and let the market do it's thing. Trade around the DD and be consistent, and most traders will be fine.
I'm sorry but I can't agree with that. By not pre-planning a stop, your potential risk is limitless and you're assuming you know what the market will do next. Stop placement can be adjusted inline with what you've mentioned of course but not placing stops is a terrible idea, especially for new traders.

Position sizing is another factor that controls risk, one best used combined with stop orders. I know we won't agree on this, but I think readers need to understand the risks.
  • #388
  • Jul 20, 2014 9:58pm Jul 20, 2014 9:58pm
Quoting TradeDream
{quote} I'm sorry but I can't agree with that. By not pre-planning a stop, your potential risk is limitless and you're assuming you know what the market will do next. Stop placement can be adjusted inline with what you've mentioned of course but not placing stops is a terrible idea, especially for new traders. Position sizing is another factor that controls risk, one best used combined with stop orders. I know we won't agree on this, but I think readers need to understand the risks.
The "old" school camp promotes SL's, 2-1 risk reward ratio, and basically only using Weekly, Daily, and higher time frame charts to make trading decisions (position and swing trading). Being an FXCM customer, this philosophy is all over their web site DailyFx, and the setting of proper SL's and appropriate lot sizing are staples of their educational menu. I have read other forex web sites' educational content, and they promote similar rules of thumb with respect to SL's and stop size. And I have no problem with that for those types of trading ... but I am not a swing or position trader.

As a daytrader or scalper, I have found that SL's -- purely as a practical matter -- get in the way of certain scalping and day trading methodologies I use that capitalize on relatively small movement, strategies that have been shown to be more than moderately successful for the most successful traders (http://fxtrade.oanda.com/analysis/to...ers-statistics ; average trade duration for Top 100 traders is <4 hours; APT <20 pips). It's as simple as that. For these extremely short-term strategies that are looking for a relatively small number of pips, I simply do not want price wicking through (as it frequently does) and hitting what would be a rule of thumb 2-1 risk-reward stop. Setting hard (as opposed to mental) SL's simply does not work for this type of trading.

That being said (and I've said this before), you should not be "going naked" unless you know what the hell you're doing and enjoy swimming that way.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #389
  • Jul 20, 2014 10:13pm Jul 20, 2014 10:13pm
Quoting TradeDream
{quote} I'm sorry but I can't agree with that. By not pre-planning a stop, your potential risk is limitless and you're assuming you know what the market will do next. Stop placement can be adjusted inline with what you've mentioned of course but not placing stops is a terrible idea, especially for new traders. Position sizing is another factor that controls risk, one best used combined with stop orders. I know we won't agree on this, but I think readers need to understand the risks.
I wonder why traders feel the need to just give money to their brokers. I used to do that. Looking back, I always wonder what was on my mind.
If you are good at something, never do it for free--Joker
  • #390
  • Jul 20, 2014 10:18pm Jul 20, 2014 10:18pm
Quoting TradeDream
{quote} I think readers need to understand the risks.
I do not think I am alone in thinking that the majority of traders criticize the failure to use SL's as basically "insane," "stupid," etc. and that not using stop losses is contrarian. I would be astounded if readers of the various threads on this site devoted to this topic came away with a lack of understanding of risk, since that is a topic that has been repeatedly revisited and rehashed in the various discussions about SL's.

I think the way to resolve it would potentially be for someone to just code an EA that we could backtest ... .

Get on that, will ya?
Fireworks are fun ... as long as you don't blow your fingers off.
  • #391
  • Jul 20, 2014 10:21pm Jul 20, 2014 10:21pm
Quoting jmn5611
{quote} I wonder why traders feel the need to just give money to their brokers. I used to do that. Looking back, I always wonder what was on my mind.
I, for one, would rather hand my money to that bum on the roadside ... .

... as strictly a matter of principle.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #392
  • Jul 20, 2014 10:25pm Jul 20, 2014 10:25pm
Quoting ZebraSquirl
{quote} The "old" school camp promotes SL's, 2-1 risk reward ratio, and basically only using Weekly, Daily, and higher time frame charts to make trading decisions (position and swing trading). Being an FXCM customer, this philosophy is all over their web site DailyFx, and the setting of proper SL's and appropriate lot sizing are staples of their educational menu. I have read other forex web sites' educational content, and they promote similar rules of thumb with respect to SL's and stop size. And I have no problem with that for those types of trading...
I don't even think it is the old school. They want you to use SL and give you 100-500:1 leverage. The message is trade big and put a SL. That is how the broker gets your money. If you trade small and allow the market do it's normal thing, you do not just give money to your broker. You have to actually be truly wrong before you close a trade. I trade now 3 cents to 1000 dollars. Before it was only one penny. If am early, or late, then that's okay. I can trade around that position and when my account balance shows that I would still be in profit after I closed the laggard out, I close it.
If you are good at something, never do it for free--Joker
  • #393
  • Jul 20, 2014 11:44pm Jul 20, 2014 11:44pm
Quoting jmn5611
{quote} I don't even think it is the old school. They want you to use SL and give you 100-500:1 leverage. The message is trade big and put a SL. That is how the broker gets your money. If you trade small and allow the market do it's normal thing, you do not just give money to your broker. You have to actually be truly wrong before you close a trade. I trade now 3 cents to 1000 dollars. Before it was only one penny. If am early, or late, then that's okay. I can trade around that position and when my account balance shows that I would still be in...
Very good point, brokers want their clients to trade big. Using a stop loss is the only responsible way a broker can promote trading big. I think this is why trading without a stop loss is so controversial. But, the people who learn how to trade small accounts learn to keep things in perspective and how to take the fear out of the market.
  • #394
  • Jul 21, 2014 12:07am Jul 21, 2014 12:07am
Quoting jmn5611
{quote} I don't even think it is the old school. They want you to use SL and give you 100-500:1 leverage. The message is trade big and put a SL. That is how the broker gets your money. If you trade small and allow the market do it's normal thing, you do not just give money to your broker. You have to actually be truly wrong before you close a trade. I trade now 3 cents to 1000 dollars. Before it was only one penny. If am early, or late, then that's okay. I can trade around that position and when my account balance shows that I would still be in...
I tend to agree with that. I'm currently trading around .5 times equity per leg of any given position, which I am comfortable with. If there's anything I've learned is that my trade direction instincts are great, but my timing is ... well, not such much. Trading in small lots lets me play a little slop and add to an open position from a slightly more advantageous price if I'm a little off as to entry.

What the vast majority of brokers tend to teach is to let the trade stop out and then do another entry at the more advantageous price if your trade idea is still basically good and would criticize my adding to a "bad" trade in an attempt to obtain a profitable target price closer to my net position (which, point in fact, is exactly what I'm doing a lot of the time). The broker's way would arguably save you money between the SL price and your second, more advantageous entry, but I frankly don't have the time, patience, or desire to second guess my original set-up, especially if its only shortcoming is the exact timing of the entry and where hitting the SL would not potentially be the best price at which to exit the trade (it never is).

In the rare cases where I totally blunder or where price moves in a manner inconsistent with early price action, I simply exhibit patience and wait. I don't necessarily expect it to recover fully, but I do wait for it to resume the direction of my original entry or fall into a range or whatever that allows me an additional entry to offset my earlier error. Naturally, if you're going to dive into "get rich quick" mode and throw 5 x equity on the table with each position you trade, you're going to have substantial trouble doing things this way.

The overall sense I do get from broker's educational articles (at least on DailyFx) is that they promote 2-1 risk-reward trades coupled with lot sizes that are equal to no more than 1 x equity with a cap on total exposure to the market of no more than 10 x equity, which would be quite conservative.

Nevertheless, the current environment pushes individual traders to "go bigger," since their recommendations as to 2-1 risk-reward swing or position trades are few and far between. There is at least one DailyFx analyst who has been virtually "flat" or considers there to be "no actionable trades" across virtually all of the major pairs for several weeks running. I cannot see a trader who is "flat" all the time on these swing/position trades making jack diddly unless their equity is huge, and the two trades they made this month were both good and had the follow-through required to meet the 2-1 risk-reward ratio. I would expect these guys get stopped out as much as anyone else, since they tout a 50% win ratio coupled with a 2-1 risk-reward as "good." I would go bonkers trading this way ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #395
  • Jul 21, 2014 12:14am Jul 21, 2014 12:14am
Point in fact, I would think that all brokers would appreciate our (1) making the maximum number of trades possible and (2) to keep on doing that as long as possible with the most money that we can afford, regardless of how we do that.

Not sure how they're going to earn their spread fees/stay in business if they keep on promoting that I only take two (2) 1 x equity positions in a given pair per month. Seems to me they'd be better off promoting scalping or day trading in this current environment (since these types of trading are going to involve higher frequency trading), but I am not seeing too much of that being done educationally on their web sites, my guess is out of fear of taking on legal liability due to the riskiness of these trading methodologies.

Those Oanda stats are telling me that promoting swing/position trading is just not the way to go ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #396
  • Jul 21, 2014 11:45pm Jul 21, 2014 11:45pm
Quoting ZebraSquirl
{quote} I, for one, would rather hand my money to that bum on the roadside ... . ... as strictly a matter of principle.
It makes more sense to fork it over to the bum on the roadside..def a more pref option..
  • #397
  • Jul 22, 2014 6:58pm Jul 22, 2014 6:58pm
Still waiting for that catastrophic no SL trade that will obliterate this month's gains:

Attached Image (click to enlarge)
Click to Enlarge Name: MTD Gains.jpg Size: 141 KB


I have been told that "it's only a matter of time ... ."
Fireworks are fun ... as long as you don't blow your fingers off.
  • #398
  • Aug 10, 2014 9:07pm Aug 10, 2014 9:07pm
Entire July's equity curve:

Attached Image (click to enlarge)
Click to Enlarge Name: 7:14 Month's Results.jpg Size: 144 KB


Still not using SL's ... . Statistically speaking, a small time frame ... . I'll start to get excited after 12 consecutive months of this ... . Until then, I'm merely hopeful.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #399
  • Aug 10, 2014 9:35pm Aug 10, 2014 9:35pm
Quoting ZebraSquirl
Still waiting for that catastrophic no SL trade that will obliterate this month's gains: {image} I have been told that "it's only a matter of time ... ."
When you have a large number of pairs in active tardes it is almost impossible to have none of them which are complementary correlative to each other. With a little preparation of your "trading Bed", when a currency surges or falls like a rock, it will push at least one pair into profit alleviating the effect it may have on others. Since, naturally, one tends to trade the pairs heading into profit and avoid trading those promising loss, The "death trade syndrome" tends to prevail only with those who trade very few pairs, and use very large lot sizes. If you avoid those two errors, pretty much anything you do will result eventually in some sort of profit.

I think your hopefullness is well justified.
  • #400
  • Aug 24, 2014 2:05pm Aug 24, 2014 2:05pm
who is that 'pro' trader that doesnot use a stoploss ? what kind of BS are you 'no stoploss losers' peddling here . lol. it takes one not two or three bad trades to wipe your accounts off
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