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Trading Without a StopLoss

  • #2,421
  • Sep 4, 2014 7:46pm Sep 4, 2014 7:46pm
I have a few questions on the following post:

Nanningbob 5 May 2014 - page 95, post 1896

QUOTE

Example #1 of successful hedging strategy:

You can hedge yourself into a permanent DD which never changes once you get the highest high and lowest low in place.

That can take years to get to that point.

Every single trade is a winner from then on out and you are winning while the permanent DD is being put into place.

Swaps in trading are insignificant if you trade low leverage. If you trade 1:1 you dont even pay a swap. Swap is only an issue with traders who trade high leverage. I trade low leverage so swaps are insignificant and I dont even consider them in any strategy.

But yes you can hedge yourself to a point where your DD wont get any bigger but you can constantly be taking winning trades. 100 pips up profit, 100 pips down profit, 200 pips up double profit, 300 pips down triple profit.
That is 1500 pips total profit and that can be had in a week or two.

Any DD from any one position would be covered within a couple of weeks and then you're in profit from then on.

(Anyway here are 4 versions of hedging that I have discovered that traders around the world have done with varying degrees of success). QUOTE

Because it can take years for the highest high and lowest low to develop, I presume we are talking about a huge range here, where we will be trading in between. A sort of range trading if you like.

"....and you are winning while the permanent DD is being put into place"

Should this read: "...and you have been winning while the permanent DD is being put into place"

or "...and you are winning while the permanent DD is kept in place" ?

Swaps are no problem with a swap free account.

Can Bob, or someone else for that matter, please elaborate on the 1500 pips total profit, maybe with a diagram.
I can only get to 1200 pips profit.

'Obviously' the hedge is kept in place by buying and selling at the same time initially and then replacing each trade once profit is taken.

When price exceeds the higher high or lower low, profits are taken and the trade(s) replaced at their new high or low.

All the while the permanent drawdown stays the same, but the balance increases steadily without any danger of a margin call and without using up any margin either.

Any comments much appreciated.
  • #2,422
  • Sep 4, 2014 9:40pm Sep 4, 2014 9:40pm
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The more thoroughly you understand these things, no matter which methhod or style you use, the better a trader you will become
  • #2,423
  • Sep 4, 2014 9:54pm Sep 4, 2014 9:54pm
Quoting Rap Skallion
{image} The more thoroughly you understand these things, no matter which methhod or style you use, the better a trader you will become
Excellently succinct ... .

I expend way more breath explaining these concepts to folks who insist on overtrading with lot sizes that appear to be patented to blow up their accounts ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,424
  • Sep 4, 2014 10:30pm Sep 4, 2014 10:30pm
Quoting iDoubleStoch
{quote} You can hold it, but there had better be a really good reason for doing so, like a really good understanding of the overlying higher time frames and what the probability is for those time frames to deliver the goods over a longer than expected trade cycle. But, it is hard to get a novice Trader to understand that, let alone have the stomach for it. Not everyone has the stomach for it. Learning how to cut losses properly is not a bad thing either, as long as it does not turn into Revenge Trading. The methodical recovery of lost capital with...
Bunch of awesome posts ... .

Unfortunately, the vast majority of new traders underestimate how long the learning curve is between total ineptness and moderate proficiency. While there are probably a few rare birds out there that are "naturals" (we're talking literally one in a million -- if not more), the reality is that trading effectively is a lengthy learning process, even assuming that you've gone to a bunch of excellent seminars that teach you all of the basics in some systematic fashion.

Additionally, novice traders appear to be unable to accept the notion that there is a lot of hype surrounding this type of trading (which is reminiscent of the hype surrounding equities day trading when it first appeared on the scene) and embrace realistic goals over realistic time frames. There is a vast difference between the statistically possible achievement and the statistically probable achievement ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,425
  • Sep 5, 2014 8:52am Sep 5, 2014 8:52am
The difference between P/L and margin:
Notice that there are times when the p/l is dancing around so fast you can scarcely read the numbers.

Notice how steady the Margin is even during these times.

Now P/L equals the number of trades X average lot size X the number of pips behind or ahead.
But margin could care less how many pips you are ahead or behind.

P/L only affects margin through the change in equity it causes, and that is a lot slower. Slower ,that is, until you close or open a trade.

Think of Margin as the number of trades you have left in your arsenal. If you have no trades left in your arsenal you are in danger. Your broker will close trades for you to prevent loss of money on his account.

You will need a certain number of trades in your arsenal before you feel comfortable opening a new trade. When you feel stress in opening a new trade it is time to increase your margin.
You can do this very quickly by closing trades,or by adding money to your account.
The trades you close should be the ones you think have the dimmest future. These may or MAY NOT be the ones closest to an arbitrary figure in loss.
The true value of your account is not your balance, but your equity.

Now notice what happens to your equity when you close a trade in loss.
Interesting isn't it?
  • #2,426
  • Sep 5, 2014 10:13am Sep 5, 2014 10:13am
Well I am a trader without a broker.

Dear Client,

Cowboy IBFX, Inc. (Cowboy IBFX) has made a business decision to no longer to service individual MT4 online platform accounts and has recently agreed to transfer your current Cowboy IBFX “MT4” account to Forex Capital Markets, LLC (FXCM), a Registered Foreign Exchange Dealer (RFED) with the National Futures Association (NFA ID 0308179). As a result, Cowboy IBFX and FXCM have made arrangements to transfer your account to FXCM on September 19, 2014.

If you have no objection to the transfer of your account to FXCM, then no action is required. Effective September 19, 2014 at approximately 5:00 pm ET, Cowboy IBFX will transfer your account, client money balance, customer data and non-transactional history to FXCM. Following such transfer, your account and positions will be reopened with FXCM, and FXCM will be the counterparty to your positions and service provider to your account(s). You will be bound by the FXCM Customer Agreement, which amends and replaces the current customer agreement you have in place with us.

Please note that any net open positions you have in your account below 1,000 units will be liquidated via a market order shortly before the transfer. Any net open positions you have in your account in any increment that is not 1,000 unit increments will be partially liquidated so that after such liquidation your position will be in increments of 1,000 units. For example, if your net open position in the EUR/USD was 12,500 before the time of the transfer, Cowboy IBFX will liquidate 500.

In order to facilitate the transfer of your account, trading will be suspended in your account at 3:00 pm ET on Friday, September 19, 2014. Then the open positions in your account(s) will be transferred. The transfer itself will not affect the equity of your account. Please note that pending orders will not be reinstated after the transfer. You must reinstate any pending orders after the transfer.

You have the right to opt out of the transfer but because Cowboy IBFX has made a business decision to no longer to service individual MT4 online platform accounts, if you do opt out, then on September 19, 2014 all open positions in your account will be liquidated via market orders and, once that has been completed, appropriate steps will be taken to close your account. You also have the option to direct Cowboy IBFX to liquidate your positions prior to the transfer.

If you choose to opt out of the transfer of your account or want to direct Cowboy IBFX to liquidate your positions, you must notify us of that decision by 5:00 pm ET, Wednesday, September 17, 2014. Failure to opt out by this date will result in your account being transferred on September 19, 2014. Should you choose to opt out, liquidate your positions or if you have any questions about this notice please contact Tom Hammergren, Vice President of Customer Service or our client services team at [IMG]resource://skype_ff_extension-at-jetpack/skype_ff_extension/data/call_skype_logo.png[/IMG]866-468-3739, or if you are calling from outside of the United States at [IMG]resource://skype_ff_extension-at-jetpack/skype_ff_extension/data/call_skype_logo.png[/IMG]1-801-930-6800. You may also contact the Firm by email or chat at http://www.Cowboy IBFX.com/Contact

Information on Forex Capital Markets, LLC
NFA ID: 0308179
James Munkittrick / Senior Vice President of Sales*
Address: 55 Water Street, 50th Floor, New York, NY 10041
Website: http://www.fxcm.com
Email: [email protected]
Telephone: [IMG]resource://skype_ff_extension-at-jetpack/skype_ff_extension/data/call_skype_logo.png[/IMG](646) 432 2957

Sincerely,
The Cowboy IBFX Team
  • #2,427
  • Sep 5, 2014 10:28am Sep 5, 2014 10:28am
Quoting ikdenk
I have a few questions on the following post: Nanningbob 5 May 2014 - page 95, post 1896 QUOTE Example #1 of successful hedging strategy: You can hedge yourself into a permanent DD which never changes once you get the highest high and lowest low in place. That can take years to get to that point. Every single trade is a winner from then on out and you are winning while the permanent DD is being put into place. Swaps in trading are insignificant if you trade low leverage. If you trade 1:1 you dont even pay a swap. Swap is only an issue with traders...

I will try to answer this, this weekend.
  • #2,428
  • Sep 5, 2014 10:30am Sep 5, 2014 10:30am
Quoting nanningbob
Well I am a trader without a broker. Dear Client, Cowboy IBFX, Inc. (Cowboy IBFX) has made a business decision to no longer to service individual MT4 online platform accounts and has recently agreed to transfer your current Cowboy IBFX “MT4” account to Forex Capital Markets, LLC (FXCM), a Registered Foreign Exchange Dealer (RFED) with the National Futures Association (NFA ID 0308179).
Cowboy? What kind of broker selects a name like "Cowboy," closes their doors and then hands you over to a Retail Bucket Shop such as FXCM. You've been unloaded to FXCM, just like Deutsche Bank FX (DBFX) unloaded its customers to FXCM a few years ago. It seems like FXCM is the dumping ground for all Retail Forex Accounts in the United States, when other failed brokers go out of business, or decide to call it quits. There was no mention of "merger," so the question is how many pennies on the dollar did it cost FXCM to steal Cowboy accounts.

Try DCFX (if they still do U.S. accounts) or CitiFx. If you live in the U.S. then those are your two best hopes for a decent Retail Forex experience without too much bucket shop drama.

Cowboy? Geepers. Now, I've heard everything.
F-X-C-M | A Classic Retail Bucket Shop Scam Artist Who Manipulates Prices
  • #2,429
  • Sep 5, 2014 10:48am Sep 5, 2014 10:48am
Some broker names you can just hear in the name what they are all about,
how about honest forex signals, easy forex,
honest harrys used car shop, woul'd I suspect Harry isn't very honest at all,?
would I buy a car from Harry, Hell no!
Bulls are stupid Animals!especially when Im short!
  • #2,430
  • Sep 5, 2014 11:10am Sep 5, 2014 11:10am
There is another forum where they add cowboy to brokers they dont like. I should have cut and paste from my email. Sorry you dont understand that part.
  • #2,431
  • Sep 5, 2014 11:31am Sep 5, 2014 11:31am
Quoting iDoubleStoch
{quote} Cowboy? What kind of broker selects a name like "Cowboy," closes their doors and then hands you over to a Retail Bucket Shop such as FXCM. You've been unloaded to FXCM, just like Deutsche Bank FX (DBFX) unloaded its customers to FXCM a few years ago. It seems like FXCM is the dumping ground for all Retail Forex Accounts in the United States, when other failed brokers go out of business, or decide to call it quits. There was no mention of "merger," so the question is how many pennies on the dollar did it cost FXCM...
I opened an account @ FXDD in May & 2 weeks later they emailed me & told me my account was being transferred to FXCM.
They should be getting pretty good @ this by now :-)
  • #2,432
  • Sep 5, 2014 3:01pm Sep 5, 2014 3:01pm
Quoting srt
{quote} I opened an account @ FXDD in May & 2 weeks later they emailed me & told me my account was being transferred to FXCM. They should be getting pretty good @ this by now :-)
The question I have srt is, did you stay with fxcm and if so, do you like them? As you know I already have another broker in mind but I wasn't ready to switch so soon. So I'm wondering if I should allow it until I am or just get out before hand.
Ghost Rider - WWTBMD?
  • #2,433
  • Sep 5, 2014 3:17pm Sep 5, 2014 3:17pm
Quoting albchr
{quote} The question I have srt is, did you stay with fxcm and if so, do you like them? As you know I already have another broker in mind but I wasn't ready to switch so soon. So I'm wondering if I should allow it until I am or just get out before hand.
Hi Chris,

No, I didn't let them transfer. I just cashed out & had them return my funds. If you funded with a credit card they'll just return it to the credit card. I currently have 2 accounts (Oanda & IBFX). I originally opened the IBFX account to run an EA but changed my mind & now use it just for "legal" hedging. Swing trade in Oanda & scalp opposite in IBFX. That will end now so probably just stick with Oanda until FXCM buys them too :-)
They have pretty good spreads & no problems so far.
  • #2,434
  • Sep 5, 2014 3:29pm Sep 5, 2014 3:29pm
Quoting srt
{quote} Hi Chris, No, I didn't let them transfer. I just cashed out & had them return my funds. If you funded with a credit card they'll just return it to the credit card. I currently have 2 accounts (Oanda & IBFX). I originally opened the IBFX account to run an EA but changed my mind & now use it just for "legal" hedging. Swing trade in Oanda & scalp opposite in IBFX. That will end now so probably just stick with Oanda until FXCM buys them too :-) They have pretty good spreads & no problems so far.
Thank you srt. I don't want to hijack this thread anymore here. My apologies if I did folks.
Ghost Rider - WWTBMD?
  • #2,435
  • Sep 5, 2014 5:48pm Sep 5, 2014 5:48pm
Quoting nanningbob
{quote} I will try to answer this, this weekend.
I will be very much looking forward to that!
  • #2,436
  • Sep 6, 2014 2:13am Sep 6, 2014 2:13am
I think I will skip my weekly report next week. Starting over again and migrating away from IBFX. Stay away from FCXM.
  • #2,437
  • Sep 6, 2014 2:53am Sep 6, 2014 2:53am
[quote=iDoubleStoch;7717990]{quote} It is the only viable way for real Traders to trade. A stop loss is a guaranteed loss of potential revenue without the chance for parole on a bad decision you might make where the market reverses and leads to a delayed payoff. If you set an automated stop, you lock in that loss and never have the chance to apply corrective measures. Both Stop Losses and FIFO should be a Federal Crime punishable by up to 1,000 years in prison.

But you do trade with a stop loss, meaning, when a trade goes wrong, you close it manually, to stop loosing right?
Please donīt tell me you have 100% winners...
So whatīs the difference?
Call it any name...but...you do limit your loosing trades...if you donīt like to call it stop loss...thatīs just fine...
Enjoy your weekend...
  • #2,438
  • Sep 6, 2014 5:21am Sep 6, 2014 5:21am
Yes, there is a difference between "when a trade goes wrong way" and "when your stop loss is filled on a price spike"
  • #2,439
  • Sep 6, 2014 6:52am Sep 6, 2014 6:52am
Quoting Rap Skallion
I think I will skip my weekly report next week. Starting over again and migrating away from IBFX. Stay away from FCXM.

I am about 90% sure I will go with CITI FX. They are not covered by NFA and you can trade multiple levels and hedge if you want. I am playing with a demo now. Making sure all my INDIs and EAs work before sending money in.
  • #2,440
  • Sep 6, 2014 6:58am Sep 6, 2014 6:58am
Quoting cuchuflito
Quoting iDoubleStoch
{quote} It is the only viable way for real Traders to trade. A stop loss is a guaranteed loss of potential revenue without the chance for parole on a bad decision you might make where the market reverses and leads to a delayed payoff. If you set an automated stop, you lock in that loss and never have the chance to apply corrective measures. Both Stop Losses and FIFO should be a Federal Crime punishable by up to 1,000 years in prison. But you do trade with a stop loss, meaning, when a trade goes wrong, you close it manually,
...
You have it right. For me the trade cutoff is long term trade direction change. For example this week with the eur news announcement I did well on my Euro sells. I also had a usd/chf sell on because I was trying to play a retracement. It went badly and I am not going to even try to wait that move out so I closed it. My decisions to close trades are more from a fundamental outlook than a percentage or fixed SL. On the other side I have kept most of my NZD buys even though it was a bad month for the NZD. I keep them because they are positive swap and they pay out the highest interest. That means that at some point the carry trade of those that like to buy into positive swaps will come back and those trades I wont need to take any losses on. There are traders, that is all they do is NZD and AUD buys. It is a nice safe long term strategy.
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