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Trading Without a StopLoss

  • #2,241
  • Aug 10, 2014 4:34pm Aug 10, 2014 4:34pm
Quoting Rap Skallion
I am no good with ranging markets, so I just don't trade them. Almost every day some pair is breaking out somewhere. My strategy is to find that pair and trade it.
Hi Rap, I like the similar approach however there are two issues that must be solved from my side, I'm still not convinced in my methods:

1-) You jump to a break-out (no matter if you jump early or not) then it turns to opposite direction and you may hit to your stop.

2-) It's not always so easy to stay "on the trend" although you jump to the trend on time. A sharp bar could:

a-) Could trigger your "close" condition earlier
b-) If you are using stoploss in positive region it could stop you out

May I kindly ask what is your approach in order to confirm (somehow) that the breakout is the real one and how do you close the order?
Thanks

PS: Actually I'm moving the stop to positive region (+5pips) and wishing that the trend will continue without a big volatility. It's a trade-off to wait until your closing conditions/levels reached or you sacrifice from your profits in order not to make loss.
If u want to be successful, u must respect one rule: Never lie to yourself.
  • #2,242
  • Aug 10, 2014 4:56pm Aug 10, 2014 4:56pm
When we start to discuss the predictability of this market, I have some STRONG opinions on this matter.

My time in forex dates back to about 2003. I took a significant break but continued to work on this idea. Finally this year I decided to start trading live again - this was at the end of April, 2014.

At the link, you'll find a list of price levels for the AUD/USD, when they originated as targets and when they were achieved. I do track time details and some other figures.

https://secure.trackvia.com/app/shar...e0f11904799198

Next, I keep a listing of open targets for the pair, and which way I'm anticipating price moving to those levels. So, I usually have a list of "short targets" which should be considered buy points for the pair and "long targets" which should be considered sell points for the pair.

Most of the time I have a band between these two categories which is considered the "no new trade" zone. Usually as price approaches this I'm either in long or short trades for the pair waiting for "the other side" to be achieved. I use the basic 5,3,3 stochastic to help determine whether I should hold trades open or go ahead and take profit on them.

I do other analysis of the pair outside of this where I track and calculate 30m opens through the entire week.

I calculate for each new 30m open it's distance from:

- 0000 GMT MONDAY 30m open
- 0000 GMT current day 30m open
- distance from previous 30m open (scalp opportunities present themselves well and consistently with this data...)

This market is more predictable than most claim it to be. IMO - "Oversold" and "Overbought" aren't specific levels but ranges where contrarian positions should begin. Identifying these ranges is key to successful trading. Given how dynamic this market is, these areas do adjust and "adjusting proactively" as a trader to this is possible. very possible.
"Holy Grail" exists - accepting where is the first step.
  • #2,243
  • Aug 10, 2014 6:05pm Aug 10, 2014 6:05pm
Quoting Sherpa
{quote} Bob or Rap, I was just curious if once a position is in profit if you tend to put in a SL at BE+ a few pips to protect winnings?
If I know for sure that the market is trending strongly yes, however, since the market ranges over 70% of the time I will take my profits every session or end of the day. I feel I can make more money trading the dips/rallies every day or couple of days rather than holding a trade. It seems if I hold a trade it just retraces back to zero so I just take the profit and catch the next wave.
  • #2,244
  • Aug 10, 2014 6:29pm Aug 10, 2014 6:29pm
Quoting nanningbob
{quote} If I know for sure that the market is trending strongly yes, however, since the market ranges over 70% of the time I will take my profits every session or end of the day. I feel I can make more money trading the dips/rallies every day or couple of days rather than holding a trade. It seems if I hold a trade it just retraces back to zero so I just take the profit and catch the next wave.
I would echo that. From a purely psychological perspective, I fret less if I can get in and out of trades in fairly short order and feel a greater sense of accomplishment if I can close everything out, especially before the weekend. Quite frankly, I simply lack the patience to stay in trades for days and weeks at a time. Do I miss out on follow through sometimes? Certainly. But I much prefer to lock in short term gains rather than waiting for a possibility that may or may not materialize.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,245
  • Aug 10, 2014 7:38pm Aug 10, 2014 7:38pm
Quoting aed71
{quote} Hi Rap, I like the similar approach however there are two issues that must be solved from my side, I'm still not convinced in my methods: 1-) You jump to a break-out (no matter if you jump early or not) then it turns to opposite direction and you may hit to your stop. 2-) It's not always so easy to stay "on the trend" although you jump to the trend on time. A sharp bar could: a-) Could trigger your "close" condition earlier b-) If you are using stoploss in positive region it could stop you out May I kindly ask what is your approach in order...
To 1) My stoploss is never triggered because I do not use one. I let the fact that my trades are generally corellative opposites and balance out, those going away from profit to going towards, profit. Since a positive swap is a sign of which currency is more positive in a pair, I almost always go with the swap. When a trade does not go my way, unless the departure is radical and threaten, I wait. Frequently the swap helps bring it back into profit. Some 5-10% of my trades I close early because the swap overrides the loss.

When I come to the screen and see that closing a trade makes me money ( at least two pips) I CALL up the close screen in order to scalp it. I do not move up my Stop Loss. I never use stop loss. When I see that the instant screen has stopped increasing my profits, I close the trade. and immediately open a trade window. Sometimes the pair turns right around again and I immediately get in again. Sometimes the pair doesn't turn. Then I put a pending trade in on the positive side of the long term trend and the swap. I have found that a tsl is less profitable. It also has no provision to get back in if a trade goes into profit again.

I trade six majors and all their crosses available in IBFX, plus the AUD/NZD ( the only aussie pair you can SELL and still be with the swap). right now my portfolio has sixteen trades open and four pending. The oldest trade is from July 4th. and probably won't come into profit until summer here is over.
  • #2,246
  • Aug 11, 2014 5:57am Aug 11, 2014 5:57am
Thanks Rap, seems a good approach

Protecting from sharp market movements, you solve this issue by pair trading. And you collect the profit on the table and for those in loss you wait them to return to profit or close in loss if you don't think it will be profitable. This means that you probably have some loss trades but since the number of profit ones are higher than looses you win.

I've tested a breakout system that takes 10pips tp and 100pips stoploss. It was even profitable (it was not enough but in profit, I can't remember now) in a year due to the fact that market ranging mainly. There were dosens of 100pip stoploss but still it was good, because so many profits in 10pips.

I think the main factor for winning is mainly depends on how we manage your looses. Eliminating the stoploss will improve your win ratio if you know when to close the loosing one.
If u want to be successful, u must respect one rule: Never lie to yourself.
  • #2,247
  • Aug 11, 2014 8:57am Aug 11, 2014 8:57am
it's all about the entry and understanding the context of current price...
"Holy Grail" exists - accepting where is the first step.
  • #2,248
  • Aug 11, 2014 10:50am Aug 11, 2014 10:50am
some here are like drug pushers
and how you make much with micro lots is a mystery
anyways there is always a middle ground

someone posted a video of this series the other wk, but was the wrong video to watch
its this one

Inserted Video
  • #2,249
  • Aug 11, 2014 12:17pm Aug 11, 2014 12:17pm
Quoting aed71
Thanks Rap, seems a good approach Protecting from sharp market movements, you solve this issue by pair trading. And you collect the profit on the table and for those in loss you wait them to return to profit or close in loss if you don't think it will be profitable. This means that you probably have some loss trades but since the number of profit ones are higher than looses you win. I've tested a breakout system that takes 10pips tp and 100pips stoploss. It was even profitable (it was not enough but in profit, I can't remember now) in...
The real art is in closing the losing ones that have no future. I let my margin % be my guide. as long as you have plenty of room to trade there, you have room to carry trades with a future.

These things require that you acquire a touch for them and this approach ensures you survive long enough to get that touch. You can read about the golf swing all you want, but until you hit a few balls, you won't know whether you can or not: and remember that time and again I have had the swap of a pair aid me in closing it in profit.
  • #2,250
  • Aug 11, 2014 7:58pm Aug 11, 2014 7:58pm
Quoting Carlsberg
some here are like drug pushers and how you make much with micro lots is a mystery anyways there is always a middle ground someone posted a video of this series the other wk, but was the wrong video to watch its this one https://www.youtube.com/watch?v=apOUbIDOu0A

First it is not a mystery. A person with a million dollar account trading ten dollar lots is using the same ratio of one penny to 1000 dollars of an account. If you follow professional traders ratios, leverage, and trading methods you begin to see that they get a yearly return between 20-40% a year. 20% of 1,000,000 is 200K, and that is nothing to sneeze at. The problem is people pick up really bad habits trying to trade high leverage and trying to make 5000, 10k, 50k, etc. dollars make an income. This leads to bad decision making and big losses. Once they damage their account then they press even more to make it back and lose it all. 7% a month average doubles your money every 10 months 3 1/2% a month doubles your money every 20 months. Your money is safe trading this way and has nothing to do with micro accounts. That is why the big boys do it. So learn their trading habits and develop a skill level. You will see these things talked about at "Is anyone here an institutional trader?" Micro lots are great things if you manage them properly and learn good trading habits. Then you can enter some serious money knowing you can trade. I do not consider that drug pushing.

http://www.forexfactory.com/showthread.php?t=486128

Yes they talk about 1/4 million drawdown in one day and a million over a month. Interesting stuff.
  • #2,251
  • Aug 11, 2014 8:03pm Aug 11, 2014 8:03pm
Quoting nanningbob
{quote} First it is not a mystery. A person with a million dollar account trading ten dollar lots is using the same ratio of one penny to 1000 dollars of an account. If you follow professional traders ratios, leverage, and trading methods you begin to see that they get a yearly return between 20-40% a year. 20% of 1,000,000 is 200K, and that is nothing to sneeze at. The problem is people pick up really bad habits trying to trade high leverage and trying to make 5000, 10k, 50k, etc. dollars make an income. This leads to bad decision making and big...
Thanks nanningbob....I get a fair bit of ridicule over trading so small....but what you point out is precisely why I do. There's no point in risking larger numbers at this point for me. Trading larger sizes against my account is no more than a surefire way to loss, and bigger ones potentially. There are many who have completely shunned the idea that the % of ROI means anything. It's a shame really. this is not a sprint at all.
"Holy Grail" exists - accepting where is the first step.
  • #2,252
  • Aug 11, 2014 8:19pm Aug 11, 2014 8:19pm
Quoting nanningbob
{quote} First it is not a mystery. A person with a million dollar account trading ten dollar lots is using the same ratio of one penny to 1000 dollars of an account. If you follow professional traders ratios, leverage, and trading methods you begin to see that they get a yearly return between 20-40% a year. 20% of 1,000,000 is 200K, and that is nothing to sneeze at. The problem is people pick up really bad habits trying to trade high leverage and trying to make 5000, 10k, 50k, etc. dollars make an income. This leads to bad decision making and big...

If you are good at something, never do it for free--Joker
  • #2,253
  • Aug 13, 2014 6:20am Aug 13, 2014 6:20am
Quoting jmn5611
{quote}
  • #2,254
  • Aug 13, 2014 10:11am Aug 13, 2014 10:11am
I think for those who would like to earn their living over Forex is the issue. Or even for those who would make some money that is meaningful for the stress and time to spend in front of computer for trading and learning; if they don not trade for joy.

It changes from country to country however let's say 5K USD is something makes you happy to spend your time and for your stress. Then if you want to use the similar leverages like big guys (say 1:10) than you need at least 50K USD in your account... OR you need to profit over 500pips per month in order to reach your target if you have 5K USD. Numbers are not important but if you can make 100pips per month with 1/100 leverage you can do %100 profit in your account.

The more you have money in your account I guess the leverage will decrease accordingly. If I would have a system that would bring me 100pips (some how close to guarantee) per month I would try to use it from 1000USD as it is with full leverage. But when I have 100K USD in my account (even before) I would of course decrease the lot size, I don't know why but I won't open 100lots per trade if I have 100K in my account. The risk to achieve over my target somehow would stop me.

I think it all depends "what you have" and "what you need". The risk is calculated automatically accordingly (at least for many traders I guess)
If u want to be successful, u must respect one rule: Never lie to yourself.
  • #2,255
  • Aug 13, 2014 6:23pm Aug 13, 2014 6:23pm
Quoting aed71
I think for those who would like to earn their living over Forex is the issue. Or even for those who would make some money that is meaningful for the stress and time to spend in front of computer for trading and learning; if they don not trade for joy. It changes from country to country however let's say 5K USD is something makes you happy to spend your time and for your stress. Then if you want to use the similar leverages like big guys (say 1:10) than you need at least 50K USD in your account... OR you need to profit over 500pips per month in...
To me, it's all about being able to wrap my mind around the percentage of drawdown being experienced intratrade and the actual dollar and cents of the drawdown. For example, if you have $10,000 equity, a 1% drawdown is $100. For many people, that is quite a bit of money to be looking at losing. If you're working a $25/hour day job, why, that may look like significant money to you since it's about a half day's work. To keep things in perspective though, it is only 1%. "It is not significant," you have to tell yourself. If you actually looked at the share prices of the stocks in your 401(k) or stock portfolio and how they gyrate on a daily basis, you'd find them doing a similar dance, and you'd probably drive yourself crazy watching them.

For my part, I have looked at what is reasonable to earn pip-wise over a set period of time doing the things the way I do them because I want to know what is a reasonable dollar and cents goal in light of the lot sizes I'm willing to trade. I've heard and read about all kinds of kooky numbers and ridiculous figures and earnings thrown out there, but this is just one thing that every trader needs to work out themselves, since trading styles, risk tolerance, and things of that nature are somewhat individual and vary greatly between traders.

Because I am always tweaking things, my APT (average profitable trade) has varied somewhat (as it will do anyways in various market environments), but I do actually have a good idea of what a reasonable ROI should be at this point in time. However, to pin your APT, ALT, and Profit Factor down requires sticking to a system of some kind or another for a period of time and looking at the stats that system generates. Naturally, if you have a larger amount of capital available to you, your goals can be more modest ... . If I had $1,000,000, 5% ROI per month would be fantastic. Heck, even 1% (which is easily achievable) would be great if I had that kind of equity. I think the basic mistake people make is assuming that 50-100% per month is a reasonable goal; it is not. This is why you can't "make a living" starting off with $5,000 of equity unless the cost of living where you're at is like, $2 US a day.

What you can do with smaller equity amounts is set reasonable goals for building that small amount into a larger amount at a more modest pace (5-10% per month) that is reasonably achievable.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,256
  • Aug 13, 2014 6:32pm Aug 13, 2014 6:32pm
either trade with a hidden stop loss, or trade without a stop loss and keep your eye on the trade.

my two cents.
  • #2,257
  • Aug 13, 2014 6:34pm Aug 13, 2014 6:34pm
Quoting ZebraSquirl
{quote} To me, it's all about being able to wrap my mind around the percentage of drawdown being experienced intratrade and the actual dollar and cents of the drawdown. For example, if you have $10,000 equity, a 1% drawdown is $100. For many people, that is quite a bit of money to be looking at losing. If you're working a $25/hour day job, why, that may look like significant money to you since it's about a half day's work. To keep things in perspective though, it is only 1%. "It is not significant," you have to tell yourself.

..now we're getting into psychology and realizing that money is merely a tool - do you cry or worry over the screwdriver in your toolbox?

Exactly. my. point.
"Holy Grail" exists - accepting where is the first step.
  • #2,258
  • Aug 14, 2014 6:48am Aug 14, 2014 6:48am
Quoting VaBikePacker
{quote} ..now we're getting into psychology and realizing that money is merely a tool - do you cry or worry over the screwdriver in your toolbox? Exactly. my. point.
Not unless all I can find is the Phillips head ... . How many times have I told you to put things back where you found them!
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,259
  • Aug 14, 2014 6:49am Aug 14, 2014 6:49am
Quoting ZebraSquirl
{quote} Not unless all I can find is the Phillips head ... . How many times have I told you to put things back where you found them!
ahhh..right...you must be the ring leader of those things that are expensive...ESPECIALLY when they break down...

...kids....
"Holy Grail" exists - accepting where is the first step.
  • #2,260
  • Aug 14, 2014 6:52am Aug 14, 2014 6:52am
Quoting VaBikePacker
{quote} ahhh..right...you must be the ring leader of those things that are expensive...ESPECIALLY when they break down... ...kids....
And ... after you go out and buy the new tool to replace the one you can't find ... you find the one you were looking for ... . Well, I guess I now have two 5mm Allen wrenches ... .

Kids, exactly ... .
Fireworks are fun ... as long as you don't blow your fingers off.
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