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Trading Without a StopLoss

  • #2,321
  • Aug 25, 2014 6:49pm Aug 25, 2014 6:49pm
Quoting Bilstein
In my adventure translating my management system into an EA I've done dozens of back tests over 7-8 years of data. None of which result in the account being blown. This was the last back test I ran on a single pair. Currently forward testing it on demo to make sure it doesn't do stupid stuff. The entry and exit criteria are ridiculously simple. The only thing I needed to perfect was the management criteria. While I understand that back tests mean diddly squat when it comes to profitability, at least trading without a stop loss didn't result in the...
  • #2,322
  • Aug 25, 2014 7:57pm Aug 25, 2014 7:57pm
Quoting Rap Skallion
{quote}The more relaxed you can get, the better you will trade.
Kinda like bowling and shooting pool ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,323
  • Aug 25, 2014 8:20pm Aug 25, 2014 8:20pm
Quoting aed71
{quote}No one would be going to work if it was so easy
absolutely true - I posted the number of pips per week based on my own trading..
"Holy Grail" exists - accepting where is the first step.
  • #2,324
  • Edited 8:43pm Aug 25, 2014 8:30pm | Edited 8:43pm
Quoting Bilstein
In my adventure translating my management system into an EA I've done dozens of back tests over 7-8 years of data. None of which result in the account being blown. This was the last back test I ran on a single pair. Currently forward testing it on demo to make sure it doesn't do stupid stuff. The entry and exit criteria are ridiculously simple. The only thing I needed to perfect was the management criteria. While I understand that back tests mean diddly squat when it comes to profitability, at least trading without a stop loss didn't result in the...
Hi Bilstein,

This is more of a technical question. If your style of trading is multi-currency, how can you backtest your style with just one pair?

Thank you and regards.
Remember, Red. Hope is a good thing, maybe the best of things...
  • #2,325
  • Aug 25, 2014 8:34pm Aug 25, 2014 8:34pm
Quoting ZebraSquirl
{quote} I'd probably need $50,000 US to make between $2,500 and $5,000 per month (I'd probably use 25k lots in that case; .5 x equity).
Very doable this is where I was not that long ago, although Im past that now hopefully some motivation for what it can be like the power of trading here is my profit for average day. Lots of wise people in this thread glad to have been a part since the beginning!
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All posts are my personal opinion
  • #2,326
  • Aug 25, 2014 8:56pm Aug 25, 2014 8:56pm
Quoting ForexFury
{quote} Hi Bilstein, This is more of a technical question. If your style of trading is multi-currency, how did you manage to back test it in MT4? Thank you and regards.
I mentioned in my post that I can only test it on one currency at a time. The entry criteria are completely static relative to the monthly open. On up months, I buy every day, on down months, I sell every day. At the end of each day, I close trades in a profit, losers are given both a certain amount of days to recover and a maximum percentage of equity to lose before being closed out automatically. The strategy will face it's challenges, particularly during ranging months that involve daily price action crossing the monthly open several times a month and during big monthly reversals. While I've been handling such situations manually for a long time it's a little harder for me to code that into an EA but I'm working on it.

I've ran the strategy on multiple individual pairs trading 1K, 10K, and 100K lots with a starting balance of $20K and no stop losses. Still have yet to blow out an account. The strategy seeks to take a user-defined percentage of equity risk and spread it across however many positions are in the orderbook (total orders). On top of that, the program allots for manually opened/closed trades as well. Given that the system only trades at a certain time (beginning and end of each day), bad trades can not only be closed out, but re-positioned (in the preferred direction). I'd like to be able to code procedures for dealing with big reversals on the month and avoidance procedures for ranging months but, like I said, I'm getting there, lol.

Basically, my EA trades the way I always have; by isolating the month and trading every day of the month and capitalizing on the net change of the month on a day-to-day basis.
  • #2,327
  • Aug 25, 2014 10:52pm Aug 25, 2014 10:52pm
Quoting Bilstein
{quote} I mentioned in my post that I can only test it on one currency at a time. The entry criteria are completely static relative to the monthly open. On up months, I buy every day, on down months, I sell every day. At the end of each day, I close trades in a profit, losers are given both a certain amount of days to recover and a maximum percentage of equity to lose before being closed out automatically. The strategy will face it's challenges, particularly during ranging months that involve daily price action crossing the monthly open several...
I label my windows: I think I'll add an arrow to the label indicating the monthly direction and move a step closer to you.
  • #2,328
  • Aug 25, 2014 11:19pm Aug 25, 2014 11:19pm
Dare123,

My 2 cents... You're making one of the biggest mistakes in trading, and executing poor discipline, by choosing to trade without using a stop loss. Trading without a stop loss is like riding a motorcycle on a rainy and wearing no helmet & wearing flip flops. It's only a matter of time before you're into a serious loss, and/or blow up your account. Also aside from the financial downside, what's being in a losing trade going to do to your mental capital? Make stop losses your new best friend, and your trading will improve. It's a part of the game of trading. Perhaps your stop loss placement isn't allowing enough room for the noise the market generates?
  • #2,329
  • Aug 26, 2014 12:27am Aug 26, 2014 12:27am
Quoting Rap Skallion
{quote} If your margin falls below $500.00 stop entering trades and consider closing trade in loss. .01 lot is maximum you should trade. No more than two trades per pair open at any one time, only one if you are subject to fifo. I suggest you add to your account to get it to $1000 as soon as possible. keep your margin % above 200. you should have twice as much free margin as you haave P/L. This will help you survive until you start seeing what is actually going on. Ever pair is coordinated with five others. When a currency makes a sizeable more,...
Dear RAP Skallion,

Thanks for your reply


Helanka
Helanka
  • #2,330
  • Aug 26, 2014 12:28am Aug 26, 2014 12:28am
Quoting VaBikePacker
{quote} Look at the "margin" field on your trading platform. Learn how much money you "donate" to enter a trade and how it impacts your free margin. Your free margin is the amount of money you have left in your account once you've entered a trade.
Dear VaBikePacker,


Thanks for your advise
Helanka
  • #2,331
  • Aug 26, 2014 12:35am Aug 26, 2014 12:35am
Quoting bassramy
{quote} I don't usually post outside of my thread, not a lot anyway, but i couldn't help to answer this Newbie question, so here is the plan : 1 - Lower your leverage to 1:20 Max. 2 - Lower your Position sizing to the minimum available at this stage, i guess for a micro its 0.1 don't u ever increase it to 0.2 until you have @ least 5000 $. 3 - At this stage of the learning curve its absolutely forbidden to trade live, NEVER EVER, why you ask because you don't even know what to do with or without stop loss thus the advice question. 4 - Don't EVER...
Dear Bassramy,

If i use 1:20 leverge,eventhough i don't use stop loss my trade will closed by the broker by margin call know?
when i trade 0.1 lot by using 1:20 leverege how many pip can i go to opposite side ?


Thanks
Helanka
  • #2,332
  • Aug 26, 2014 2:58am Aug 26, 2014 2:58am
Quoting Helanka
{quote} Dear Bassramy, If i use 1:20 leverge,eventhough i don't use stop loss my trade will closed by the broker by margin call know? when i trade 0.1 lot by using 1:20 leverege how many pip can i go to opposite side ? Thanks
Then you dont have enough money to trade with. You will be so tight you dont have room to trade. You have to understand in trading you have losing streaks. I have losing days, losing weeks, losing months (last year I had two losing months but neither were very big percentage wise) in a years time but I have enough room to trade 25:1 and can comfortably cover any loses I may have. If I have a 10% DD on my account I still have well over 1000% margin left to trade with. In fact with one account I am trading at 4% DD I still have over 9000% margin to trade with. I am trading another guys money and it is a significant amount. He is happy to get 2% a month on his money. If I return an average of 20-30% a year he would be tickled to death. and I make a nice little side income. For me to get 2% a month is not too difficult and I enjoy trading with no fear of ever losing this guy significant amount of money. It is a nice gig. Eventually there will be more like him to trade for. I tell guys if you cant trade one penny account with a 1000 dollars then you shouldnt trade. Once you trade one penny trades and have 1000 dollars backing your trades up you can properly learn this business without the risk of big loses. Once you can relax and trade then it becomes a whole different ball game. Your whole decision making process changes and you just look at a screen knowing you are going to make money over the long term because there are no margin calls, whiplash, broker/bank spikes to your SL, etc etc.
  • #2,333
  • Aug 26, 2014 4:15am Aug 26, 2014 4:15am
Quoting ZebraSquirl
{quote} I'd probably need $50,000 US to make between $2,500 and $5,000 per month (I'd probably use 25k lots in that case; .5 x equity).
That's good! Then it's a matter of time to reach 50K if you could continue with the same ratio. Good luck, hope you can reach that levels soon.
If u want to be successful, u must respect one rule: Never lie to yourself.
  • #2,334
  • Aug 26, 2014 5:12am Aug 26, 2014 5:12am
Quoting Helanka
{quote} Dear Bassramy, If i use 1:20 leverge,eventhough i don't use stop loss my trade will closed by the broker by margin call know? when i trade 0.1 lot by using 1:20 leverege how many pip can i go to opposite side ? Thanks
These rules are set for you to play around with and learn the Business without being hurt a lot, your losses will be in pennies and not in thousands of $'s, once you are profitable and sure of yourself you can trade bigger.

To tell you the truth i didn't understand your question (my trade will closed by the broker by margin call know), you have to have a system with a specific entry and exit rules it may be with a stop loss and it maybe without, but the rules for exiting your trades must be clear and there are multiple exit rules in trading.

You surely don't hold your trade in loss until you hit a margin call that's why you have exit rules, as a matter of fact even with such a low leverage and small lot size i still don't trade more than my 50 % margin, i don't need to, i look only for AAA setups because i'm only allowed by my rules to enter small amount of trades so i never over-trade and that is absolutely fantastic strategy to use by a newbie who don't know anything yet about this business and he is an easy pray for brokers who are eager to take your money as fast as they can with a ridiculously extravagantly high 1:50 Leverage and up like a passerby gambler in a casino.

I guess i answered your 2 questions clearly, the most important thing is to get educated before you commit your hard earned cash and think in long term, Defensive trading [MRM (Money and risk Management)] is the secret specially @ the beginning of your career and like someone said here getting rich is a marathon not a sprint so get out from the bush, relax, take it easy and start looking for the big picture and trade the D1 and up and if you need the exitment or to vent off some steam go to the gym instead of trading the M1 and the M15 in and out all the day and make your broker rich with the spread x the 1:500 leverage and the slippage.

Best,
B.R.
Master Your Setup, Master Your self. (NQoos)
  • #2,335
  • Aug 26, 2014 7:19am Aug 26, 2014 7:19am
Quoting bassramy
{quote} These rules are set for you to play around with and learn the Business without being hurt a lot, your losses will be in pennies and not in thousands of $'s, once you are profitable and sure of yourself you can trade bigger. To tell you the truth i didn't understand your question (my trade will closed by the broker by margin call know), you have to have a system with a specific entry and exit rules it may be with a stop loss and it maybe without, but the rules for exiting your trades must be clear and there are multiple exit rules in trading....
good advice!
  • #2,336
  • Aug 26, 2014 11:55am Aug 26, 2014 11:55am
Quoting Rtm
{quote} Very doable this is where I was not that long ago, although Im past that now hopefully some motivation for what it can be like the power of trading here is my profit for average day. Lots of wise people in this thread glad to have been a part since the beginning! {image}
These are exactly the kind of stats I like to see in my spreadsheets ... . I just know for a fact that there was a lot more red (and not just little red -- big red), choppiness and inconsistency when I was working with stop losses.

I mean, look at my trading between the beginning of the year and July 1st, when I threw in the towel on SL's (along with a bunch of other concepts):

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Prior to July 1st, I was doing things "old school" with single position entries looking for 2-1 risk reward, stop losses placed where all the analysts say you should place them (Daily ATR, swing high/low, obvious S/R, etc.), refusing to add to "losing" trades, and all the rest of that stuff and (don't get me started) attempting to carefully select and use FXCM's "free" Mirror Trader strategies (truth be told, they worked great during higher market volatility; during lower volatility -- eh, not so much).

All that being said, it could be that I magically became a better trader since July 1st. That could very well be, but there was really nothing "magical" about it; I stopped listening to all the standard approaches, ditched the run-of-the-mill market analyst's advice that recommends seeking out only trades that shoot for the moon, started settling for smaller pippage per trade, threw stop losses out the window by opting to manage risk with extremely small lots instead, and now gladly add to "losing" trades if that will result in my being able to exit positions net positive. (I fully understand that, in the scheme of things, two months' worth of performance isn't much to base anything on; but the equity curve certainly looks a lot more promising than it did prior to July 1st ... , and you can clearly see that I am still digging out of the "old school" hole created between 1/1 and mid-April).

The one thing I have taken away from all my "old school" reading (and something that we've probably beaten to death here and then beaten some more) is adhering to maximum exposure rules. The general rule of thumb is never expose yourself to more than 10 x equity for all your open positions and certainly never ever trade to the extent that a margin call is even remotely on the horizon.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,337
  • Aug 26, 2014 12:02pm Aug 26, 2014 12:02pm
Quoting ZebraSquirl
{quote} I let positive swap be my friend. Good positive swap (like I'm experiencing now with a EUR/NZD short) gives you the patience to ride out brief adverse movement without the concern that swap is eating into your modest target price. {image}
Hi all, interesting thread here that fits my opinion to not using SLs.
ZebraSquirl, would you be so kind to tell me more about your using positive swap. I often have to close a trade cause swap eats me while waiting for a pair in loss to return.....
How can one find out, which pairs swap is positive and which is negative?
Thanks in advance.
Keep on your good work here.
Have a nice day
  • #2,338
  • Aug 26, 2014 12:02pm Aug 26, 2014 12:02pm
Quoting ZebraSquirl
{quote} I stopped listening to all the standard approaches, ditched the run-of-the-mill market analyst's advice that recommends seeking out only trades that shoot for the moon, started settling for smaller pippage per trade, threw stop losses out the window by opting to manage risk with extremely small lots instead, and now gladly add to "losing" trades if that will result in my being able to exit positions net positive. (I fully understand that, in the scheme of things, two months' worth of performance isn't much to base anything on; but the equity...
I hear you man and ever since I ditched the standard "rules" about 18 months ago I've been doing great and all without using a SL. I don't trade the number of pairs as you guys do but do some similar things with what I call a cross correlation hedge and I do add to losing positions at times at a wide scale of sometimes 150 pips or so. Good to see others making pips by employing some unconventional strategies!
  • #2,339
  • Aug 26, 2014 12:06pm Aug 26, 2014 12:06pm
To put it plainly; trading without stop losses really isn't all that big of a deal so long as the trader does his or her due diligence in managing losing trades. To be honest, while trading without a stop loss doesn't necessarily give you a "statistical edge" it definitely refines your mindset when it comes to risk and capital management. The more you do it, the more self-control you learn and the quicker you can adapt to market changes without combing over dozens of indicators or being paralyzed by technical analysis.

How many idiots leverage themselves to the hilt on a single stupid trade with a 10-20 point stop loss day in and day out? Just go out and explore some threads to find out how man of 'em do. Plodding through philosophical platitudes and "us vs them" mentality with their brokers, blaming everyone but themselves. To me, regardless as to what trading plan you use, if you're not doing what 95% of the people on this forum (or any forum) are doing then you're on the right track.
  • #2,340
  • Aug 26, 2014 12:19pm Aug 26, 2014 12:19pm
favorite quote: "observe the masses and RUN the other way"
"Holy Grail" exists - accepting where is the first step.
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