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Trading Without a StopLoss

  • #2,101
  • Jul 25, 2014 8:13am Jul 25, 2014 8:13am
What I did this week:

%change in equity:4 (200%/annum)
%change in balance:4
%change in P/L:-10
Margin Level %: 274.14

- I now remove pendent trades when neither currency is active, (for some 8 hrs. each day no central banks concern themselves chiefly with them.
- now, when closing trades in profit I avoid renewing if the pushing currency is no longer active.( If its central bank has closed for the day)

The basic idea it not to try to trade a currency that no one is likely to be interested in. I consider the Asian period less interested in the usd than any.(except for the Aussie).

I tend to close trades in profit without re-opening them on mondays and fridays. (except when the News is likely to push the CAD on fridays).
These days are generally quiescent, and they are good days for increasing margin thus, given the opportunity.
That margin is to be used when I get aggressive teus-thurs.

no of weeks since last taking a loss:2
no of trades open:44
No, I do not bother with putting in SL. of any kind, anywhere. I prefer to think of my self as more reasonable, and I can optimize my loss expenses , since I trade multiple entry, multiple currencies, going in opposite directionany plunge in one pair likely to produce a surge in the other)

Currently I tend to close trades in loss once a month to increase margin (if needed),and once a quarter to improve my tax position.
  • #2,102
  • Jul 25, 2014 10:36am Jul 25, 2014 10:36am
Great roundup of your trading activity Rap.

This is very enlightening for myself and I for one thankyou very much for it.
I am still trying to understand why you have 'leftover' loss trades to closeout months later at tax time - as i was of the understanding that when they head south and your MA's move in an unfavourable direction you close them out?

Your style of trading is unique in that way that you have a BLEND of:
1: Basket Currency trading (i.e. the groups of parent-child triads) which you choose suitable pairs to trade out of.
2:Fundies kept track of in terms of where the PUSHES will come from
2:Technical Trading - you use technicals like MAs and SR to help decide when to enter and exit
3: Scalping and Swing and Position trading all wrapped up into one - you set things up on the 1hr and can take profit at 15 pips but have new positions open up for 50+ like a swing trade or indefinate like position trading.

The above points are why i have been putting your method to work for me albeit with a few personal mods to suit my preferences and money management. I know what works for me - and it appears similar to you!
I am still in the fine tuning stage and would love to see a few of your trades with 1hr charts before , during and after you have taken a few trades and how you decide upon and then adjust the SR for the daily preperations.

Unfortunately this thread has been dominated by the chicken littles of this world (at least in the first 30 pages which i have read so far)who have no or little experience apart from what they have read about SL's in 99% of trading literature - i.e. demanding your sanity be kept by ensuring tight stops whatever you trade - however you do it. However after 4 years in this caper i have found the most profitable traders doing the exact opposite.
I was amazed to find some people basically assuming that if you dont use stops - you keep losing positions open indefinately until your margin call or equity evaporates??? The reality is that smart traders manage drawdown and losing positions in different ways but usually they are closed after they meet some criteria for close in the traders mind. Isnt this really a stop loss? You close it as per your trading plan?

Would love to see more of your trades and hear your reasons for it.

Cheers
  • #2,103
  • Jul 25, 2014 11:03am Jul 25, 2014 11:03am
The stop loss, no put brackets below and above key resistance, combined with EMAS Tunel and setbacks fibonacci 38.2, 50, 61.8, it is also important to have good risk management, and risk-benefit ratio
  • #2,104
  • Edited 1:42pm Jul 25, 2014 1:29pm | Edited 1:42pm
Quoting Prophetable
Great roundup of your trading activity Rap. This is very enlightening for myself and I for one thankyou very much for it. I am still trying to understand why you have 'leftover' loss trades to closeout months later at tax time - as i was of the understanding that when they head south and your MA's move in an unfavourable direction you close them out? Your style of trading is unique in that way that you have a BLEND of: 1: Basket Currency trading (i.e. the groups of parent-child triads) which you choose suitable pairs to trade out of. 2:Fundies...

Nice to hear from you :

About trades in loss: -even in my "red" windows if the trade is headed back into profit I am reluctant to close it.
- Once I have sufficient room in my margin to trade, I have no more interest in closing losers, I always trade with what are in my judgement the long term trends, and expect them to come back no matter where they are.

So naturally there are some left over toward the end of the quarter where the question becomes. "shall I pay tax on these as they continue to lose, or take advantage of the implied subsidy the government gives me (They do not tax a closed loss). That is an additional incentive to close a loser. Until then, unless they threaten my margin, and hence put a drag on my equity overmuch, I am happy to carry them. Especially when my broker, in most cases, is perfectly willing to pay me a stipend, not to close them.

I have yet to figure out how to calculate a risk/benefit ratio on a basket of counter-balance pairs of currency so I do not bother.

A nice feature about a growing account is that you can enter larger lot sizes, and still risk less % per trade, if you manage your finances right.

Thanks for your interest: remember to try things out for yourself, and don't keep what you do not see as working.

There is quite enough room in this way of trading for someone to just close out the "red" windows. I prefer to shop around among my losers when things get a little tight, and take that which gives me most effect for least cost.

I occasionally ignore all the rules I have laid out for me and do something out of instinct: except for the lot size. Keep it small. , Never go too large.

I am not rich at present but expect to be wealthy by anybodies standards if the cancer lets me. !/4 increase in equity going to the charity of my choice at the end of the year, God willing.

Don't forget the poor...
  • #2,105
  • Jul 25, 2014 4:24pm Jul 25, 2014 4:24pm
Quoting Rap Skallion
What I did this week: %change in equity:4 (200%/annum) %change in balance:4 %change in P/L:-10 Margin Level %: 274.14 - I now remove pendent trades when neither currency is active, (for some 8 hrs. each day no central banks concern themselves chiefly with them. - now, when closing trades in profit I avoid renewing if the pushing currency is no longer active.( If its central bank has closed for the day) The basic idea it not to try to trade a currency that no one is likely to be interested in. I consider the Asian period less interested in the usd...
It's cool that someone else who doesn't use SL's as a general matter is posting their stats ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,106
  • Jul 25, 2014 4:30pm Jul 25, 2014 4:30pm
what's about EURUSD SIR
#080100
  • #2,107
  • Edited 6:06pm Jul 25, 2014 5:53pm | Edited 6:06pm
Quoting palash8915
what's about EURUSD SIR
(Since he said "sir" I assume he means me>>> )

Last week I made twelve trades in the EURUSD for a total of 56p., about 10% of the total profit.

I only sell EURUSD, when the opportunity presents. If it goes up, it usually will drive UERJPY or EURCHF into profit. Not to mention that most CHF crosses correlate well with the EURO.

On the monthly Charts the EURUSD looks like it is in a bearish triangle, but I have no quarrel with those that trade it up. They can make good money doing that if they want.

All of my trades in the EURUSD for the week have been closed in profit. None are in play.

Next week can be a different story, but I shall continue to play the pair DOWN
  • #2,108
  • Jul 26, 2014 6:48am Jul 26, 2014 6:48am
Quoting ZebraSquirl
Still waiting for that no SL trade that "obliterates" this month's gains: {image} I have been told that "it's only a matter of time" ... and that my equity only has "a few weeks to live." (Breaks down sobbing).
You'll probably survive a big move against you as your trades are so small it wont make much difference losing a grand. Try managing those same trades with real lots and we'll see how you do.. While you think this is trading, it is not. It is just the same as going to a bookies putting on an accumulator and seeing which one comes in.
  • #2,109
  • Jul 26, 2014 8:22am Jul 26, 2014 8:22am
Quoting Philt
{quote} You'll probably survive a big move against you as your trades are so small it wont make much difference losing a grand. Try managing those same trades with real lots and we'll see how you do.. While you think this is trading, it is not. It is just the same as going to a bookies putting on an accumulator and seeing which one comes in.
2 1/2 years trading without a stoploss still here.

ZebraSquirl is largely right, and you are mostly Wrong!
  • #2,110
  • Jul 26, 2014 9:53am Jul 26, 2014 9:53am
Most people just can't wrap their heads around trading with no SL.
If I have $100 USD in cash and I go to my local bank and ask to get converted to Euros, I then take the Euros and put them in the drawer. I have now done a trade with no SL with 1:1 leverage. I can never be stopped out, I can never have a Margin call. I then convert back when I feel like it. If the Euro drops 2000 points I can just sit on the money and wait. I could even buy $100 USD more. Sit and think about that.

Funny how professional traders consider 6-8x leverage as the proper range for Forex trading. Most people don't understand the concepts behind position size and leverage. I trade at $0.01/$1000

Trade your money the way you would want it traded if you were a professional trader.

Rap you NanningBob and Bilstien are kind people for trying to educate people despite the non believers constantly arguing with you. You have great patience.
I have also pledged 10% of profits to charity.

Nanningbob posted all his trades before he made them for a full year and showed that he still made money with no SL.

Inserted Video
  • #2,111
  • Jul 26, 2014 11:59am Jul 26, 2014 11:59am
From Sherpa:
"Most people just can't wrap their heads around trading with no SL.
If I have $100 USD in cash and I go to my local bank and ask to get converted to Euros, I then take the Euros and put them in the drawer. I have now done a trade with no SL with 1:1 leverage. I can never be stopped out, I can never have a Margin call. I then convert back when I feel like it. If the Euro drops 2000 points I can just sit on the money and wait. I could even buy $100 USD more. Sit and think about that."

You can't get much more secure than that!
Coin Collectors, art collectors, antique collectors do the same sort of thing. And so can you.

Since 100 euro notes can get misplaced, you can put an entry in with your broker. What's more if you put it on the side of the swap, he will pay you to keep it there.

Other than the points of leverage and liquidity, your trading method, I should think, should be a lot like that.
No stop out means no nasty surprises. To avoid margin call, you just maintain a good safe margin. When it comes into profit, cash it in and go for more,
what could be easier or more natural? Diversity and hedging of one sort or another are well known tools to aid this process.

All the rest of it are just refinements and (hopefully) imrovements on this basic strategy.
  • #2,112
  • Jul 26, 2014 3:26pm Jul 26, 2014 3:26pm
Quoting Sherpa
Most people just can't wrap their heads around trading with no SL. If I have $100 USD in cash and I go to my local bank and ask to get converted to Euros, I then take the Euros and put them in the drawer. I have now done a trade with no SL with 1:1 leverage. I can never be stopped out, I can never have a Margin call. I then convert back when I feel like it. If the Euro drops 2000 points I can just sit on the money and wait. I could even buy $100 USD more. Sit and think about that. Funny how professional traders consider 6-8x leverage as the proper...
that bloke looks tired (and a nob head)
maybe hes just had too many sleepless nights trading without a stop loss?

not sure its been addressed here much or at all, but some brokers wont even allow you to place a trade without a stoploss,
and most don't usually have large enough trading accounts in the first place to allow trading this way
they are trying to get rich, not rich already
what should they do? get a loan?
  • #2,113
  • Jul 26, 2014 4:43pm Jul 26, 2014 4:43pm
Quoting Carlsberg
{quote} that bloke looks tired (and a nob head) maybe hes just had too many sleepless nights trading without a stop loss? not sure its been addressed here much or at all, but some brokers wont even allow you to place a trade without a stoploss, and most don't usually have large enough trading accounts in the first place to allow trading this way they are trying to get rich, not rich already what should they do? get a loan?

He was a multimillionaire by his mid 20's and then retired, so I would take his advice over yours

Change brokers if they won't allow trading without a stoploss or set a stop loss 10000 pips away, problem solved
Trade With Oanda, they let you trade fractions of a penny so $100 is enough, problem solved.
Also if you can't scrape together $100 to trade maybe you should just save up your money and keep trading this technique in demo for 3-6 months

We are not forcing this on you. Please don't be hostile. Open your mind

You don't realize that 10+ years ago you could not trade as a retail trader. You had to have an institution sized account $50-100K minimum and the smallest unit to trade was 1 full lot so that was 10$/pip. People don't realize we are in a golden age where we can trade directly with these sub nano sized lots.

This guy is trading a $100 account and doing it successfully with no SL. He is on track to make 50% return a year. He can withstand a 14,000 pip loss and only lose $50
http://www.forexfactory.com/showthread.php?t=487576
Problem solved

What arguments do you have now Carlsberg?
  • #2,114
  • Jul 26, 2014 5:43pm Jul 26, 2014 5:43pm
Carlsberg should make a reasoned argument against not using stop loss ( we might learn something) and quit with these personal attacks, or go find another thread.
He could go get a 100 euro bill and put it in a drawer, run whatever techniques he desires for a couple of years, and then find out which is worth more, His account, or the 100 euro bill.

One more chance: Most of us in this thread have started out using fixed stoploss, given it up and found ways to do well without.

If he present new arguments in favor of stoploss, we will listen, because who knows, we may make more money using one of his ideas.

I hear another personal attack, I will put him on ignore, and suggest others do the same.
  • #2,115
  • Jul 26, 2014 6:04pm Jul 26, 2014 6:04pm
Quoting Rap Skallion
Carlsberg should make a reasoned argument against not using stop loss ( we might learn something) and quit with these personal attacks, or go find another thread. He could go get a 100 euro bill and put it in a drawer, run whatever techniques he desires for a couple of years, and then find out which is worth more, His account, or the 100 euro bill. One more chance: Most of us in this thread have started out using fixed stoploss, given it up and found ways to do well without. If he present new arguments in favor of stoploss, we will listen, because...
go right ahead put me on ignore, i wont be offended, nor care one bit
the lord likely would n't be offended either and has probably been called far worse

i should put half of you geniuses on ignore, but i'm not that petty,
as not many here seem to have to much to offer either in good advice,
5% maybe

he's probably made most of the money in a one of the bull markets where nearly every man and his dog made cash, and using others money,
now hes selling courses

its the weekend chill out, or go f. yourself's
everyone has a right to their views, and should nt also be attacked for making two or three valid points

you guys seem a bit highly strung, are some of your trades slightly underwater?

ps - i would nt give him any of my cash
  • #2,116
  • Jul 27, 2014 9:27am Jul 27, 2014 9:27am
Carlsberg I am into my twelfth month trading since I started to get to know Forex, trading, Technical analysis, Fundamental analysis, Price action etc. In the first 8 months roughly I used every Indicator and Oscillator you could find in MT4 and blew every trading account...my two live accounts and I don't know 4,5,6 demo accounts... Now I couldn't find what the problem was and I thought yes the Indicators and Oscillators suck, and always wondered how can one say you could make tons of money using only one moving average :O

After that period I stumbled upon this forum and on FTIs thread and started to read, and opened my eyes...not only his thread, but another thread about Institutional trading where some former institutional traders said that they never used a fixed stop loss in their trading. I had to ask myself if they, professionals never used it who am I to argue with them with all my greenery in trading.

And that was the breaking point where I started to under leverage my positions and not use fixed stop loss anymore..and guess what I still have two demo accounts (one in red 8k left from 10k and another in green 12k from 10k) that are alive and kickin'

@Philt

Open a 200 000$ account and trade with full lots without stop loss
  • #2,117
  • Jul 27, 2014 3:44pm Jul 27, 2014 3:44pm
Quoting Philt
{quote} You'll probably survive a big move against you as your trades are so small it wont make much difference losing a grand. Try managing those same trades with real lots and we'll see how you do.. While you think this is trading, it is not. It is just the same as going to a bookies putting on an accumulator and seeing which one comes in.
Umm, like, I am trading with live money ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,118
  • Jul 27, 2014 7:04pm Jul 27, 2014 7:04pm
I'm new to this thread and I don't usually post comments since I've been a member here in FF but I gotta say, this thread is very interesting, the heated arguments and the topic itself. I guess everyone is different and that applies to traders as well.
  • #2,119
  • Jul 27, 2014 7:26pm Jul 27, 2014 7:26pm
Quoting Prophetable
However after 4 years in this caper i have found the most profitable traders doing the exact opposite. I was amazed to find some people basically assuming that if you dont use stops - you keep losing positions open indefinitely until your margin call or equity evaporates??? The reality is that smart traders manage draw-down and losing positions in different ways but usually they are closed after they meet some criteria for close in the traders mind. Isnt this really a stop loss? You close it as per your trading plan? Would love to see more of your...
An excellent summary, couldn't have said it better myself. The only place I have ever seen in trading where people use a SL of a fraction of a penny is Forex. It is almost like a religion. Can you imagine going to a broker and buying IBM stock and then asking for 1/8 or 2/8 penny stop loss on a 100,000 dollar trade. Yet people will take a 1000 dollars trade 400:1 leverage trade and put 100,000 into play and put a 20 pip stop loss or 1/5 of a penny. It is so silly and is the reason why people cant make money in this business. They use too large lot size to account size, high leverage, try for 2:1 or 3:1 win to loss ratio in a market that ranges, and bet it all on one trade. Then they blame the broker, their trading system, indicators, fundamentals, neighbors black cat, and so on ........... Any trader or investor knows you diversify your portfolio to be long term successful. Yes there are your one shot success stories (Hello Mr. Soros who became famous with one big time trade. He wasnt lucky he knew what he was doing) but that isnt the norm. Long term successful people plug away month after month and year after year and become long term successful.

Anyway great summary of how I trade and how many others successfully trade.
  • #2,120
  • Jul 27, 2014 7:49pm Jul 27, 2014 7:49pm
Quoting nordkapp21
I'm new to this thread and I don't usually post comments since I've been a member here in FF but I gotta say, this thread is very interesting, the heated arguments and the topic itself. I guess everyone is different and that applies to traders as well.
I think that the debate could be described as "epic."

I've been meaning to get to having an EA coded that could test out the proposition in some fashion (not sure that's possible), but got side-tracked tweaking my own way of doing things.

I know that the folks at FXCM/DailyFx posted a study of sorts on their web site regarding the value of stop losses. http://www.dailyfx.com/forex/educati...ders_Make.html

If you don't want to read the whole article, here is the no stop loss vs. stop loss part in a nutshell:

Two models: Model 1 used stops and limits, the stop being a constant 115 pips, the limit being a constant 120 pips. RSI was used in some fashion for entries, although the precise methodology is not described (in all likelihood, it is sell when the signal line crosses the 100, buy when it crosses the 30).

Model 2 used no stops or limits. It merely bought and sold when the RSI signal indicated.

"In comparing these two results," the article says, "you can see that not only are the overall results better with the stops and limits, but positive results are more consistent. Drawdowns tend to be smaller, and the equity curve a bit smoother."

Unfortunately, I am of the opinion that the results of this study are limited to use of SL's in conjunction with the RSI, a lagging indicator. It is entirely possible that the hard limits of the Stop and Limit Model captured gains that the RSI indicator lagged on for the no SL model and that resulted in that model's therefore having a lower ATP than the Stop and Limit Model. I personally do not advocate the use of lagging indicators as the primary signal for making a trade entry/exit; my philosophy is to use a methodology that does not suffer from lag first and foremost in making an entry or exit decision; only then do I looking at a potentially lagging indicator to confirm direction, if at all.

Perhaps this would be worth a contest of some sort ... . You know, No SL folks against SL folks ... . See who comes out on top.
Fireworks are fun ... as long as you don't blow your fingers off.
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