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Trading Without a StopLoss

  • #2,521
  • Nov 2, 2014 12:07am Nov 2, 2014 12:07am
Quoting Graviton
I trade with a wide emergency stop loss, but I consider perfect trading to never hit a stop loss, and pretty good trading to only hit one very rarely. Stops always take me out at a low profit point, and that's never where I want to exit. I have had situations with loss of internet connection while news was coming out that made me build that comfort factor stop into my trading. Otherwise, my exits are mental and usually right around break even or for profit. If price goes against me right after entry, I exit quickly for just a few pips loss. I assume...
Graviton.

First, it is a pleasure speaking to a profitable trader. I know this because of the way you trade. I know you make money.

Now for my comment. No one in this thread trades with absolutely NO stop loss. Most of us hedge.

Why do we hedge? Price action dictates that. So if I get long G/N ( a notoriously volatile pair), and PA tells me tomorrow to get short, then I am short....and long. One of these trades will resolve itself. But that's just a part of the tale. If that short continues, then I will get short again. Now I have two shorts, one long. So I am net short.

I know you know all of this.

"No stop loss" does not mean "no risk control". This is where people get turned around.
If you are good at something, never do it for free--Joker
  • #2,522
  • Nov 2, 2014 12:10am Nov 2, 2014 12:10am
Quoting VaBikePacker
{quote} A clear view of the context of price is what's most important regardless of trend, scalp, position, range trading. If your system has this (clear view of the context of price at current levels), perfect. If it doesn't, well, then keep believing in how 'random' this market is.... if you want to take a look at my most recent explorer due to broker changes, you'll see a NZD/USD buy that looks terrible - well, the whole purpose of that trade is swap building - and I don't care how long it takes for the actual trade to profit...It's at a volume...
If you are good at something, never do it for free--Joker
  • #2,523
  • Nov 2, 2014 12:12am Nov 2, 2014 12:12am
Quoting ZebraSquirl
{quote} Well, we've said it here about a billion times, but it bears repeating: 1. Keep your expectations reasonable. There are a number of Trade Explorers that show gains in excess of 100% for the month of October alone (I see about 50 or so). Kudos to them, but the individuals who are garnishing these stats are statistical outliers; they are not the average trader. Shooting for these kinds of stats, especially when just starting out, is not a reasonable expectation. 2. Establish reasonable (and repeatable) goals. I think 5-15% per month is a reasonable...
If you are good at something, never do it for free--Joker
  • #2,524
  • Nov 2, 2014 12:18am Nov 2, 2014 12:18am
Quoting chrisyuto
recently i realize there is no "no stop loss" condition, even if we don't put in stop loss order, there is another kind of stop loss from the broker side, margin call..
If any one position ever is in danger of meeting Mr. Margin, Then you are trading too large.

Trade like you live on a tropical island and a hurricane hits your island. When power and internet are restored, you are still in the game, regardless of what price did. Are you patient enough for that?
If you are good at something, never do it for free--Joker
  • #2,525
  • Nov 2, 2014 3:01am Nov 2, 2014 3:01am
Quoting Chicky
{quote} Continued ........ E. No Stop Loss - Comment: Every pair, no matter a major or cross, has an "Open Side" and there is a "Closed Side" of the price. If one wants to trade a pair without stop loss, should enter in the direction of Open Side. The trade size is calculated in such a way that if Pa goes against the trader and hits the Closed Side of the price, the loss should not be more than intended risk (maximum amount one wants to lose). Very safe, very very safe way of doing business, but returns may not be very lucrative unless one has a...
I am really struggling with this Chicky - Is 2.5 a typo or do you really think that EU will move ''UP'' 11000 pips in any-ones life time??? I get that you might think it's a long trade atm but can't see the point of even mentioning 2.5 but maybe I'm missing something.

Are you gonna tell us what option F is or leave us all to come up with our own versions?
  • #2,526
  • Nov 2, 2014 3:50am Nov 2, 2014 3:50am
Quoting Chicky
These words were written sometime ago in a different thread relating to Stop Loss. The test is almost complete. Chicky wrote: My trading was good, up until recently, however, wanted to switch to longer term trading for a variety of reasons. That required changing some aspects of my short-term trading method, stoploss being the most important. In last one month, was amazed to note how greatly a proper stoploss affects one's profitability. My new stoploss calculation uses basics of horse race book-making principles. It is still under-test. A book-maker...
Hello Chicky ,

you did this....
  • #2,527
  • Edited 8:55am Nov 2, 2014 8:39am | Edited 8:55am
Quoting jmn5611
{quote} Graviton. First, it is a pleasure speaking to a profitable trader. I know this because of the way you trade. I know you make money. Now for my comment. No one in this thread trades with absolutely NO stop loss. Most of us hedge. Why do we hedge? Price action dictates that...
The pleasure is mine. I think you have to trade the way that works for you, of course. If everyone traded the same, there would be no market. For me, hedging works well in markets where I can hedge with different instruments. So, if I think oil is going down, I may short one oil company with large proven oil reserves like an Exxon and go long another oil company that buys most of their oil on the open market for processing like a Valero. Then if oil goes down as I expect, I should make a profit. If something else happens, like a broad market rally causing both trades to rise, my short risk is partially hedged by the offsetting long trade.

For me, and speaking only for me, hedging with the same instrument is no different than simply exiting the trade if price moves against me. So one long and one short in the same instrument is the same as exiting the original long trade, except, and this is important to me, exiting the original trade frees up the margin and is simpler. Again, I'm just speaking from my perspective and not suggesting any change in anyone's successful trading style. So, for me, having two shorts and one long running is the same mathematically as just having one short running, except the one short is simpler, and I try to keep things as simple as possible.

For some people, I think hedging can be a bit of a crutch or even a trap where they like to believe that if they haven't cashed out the painful loss, they haven't really made a loss. It's a way for them to avoid the pain of taking a loss, but of course, as soon as you take an offsetting long on a losing short trade, it's the same mathematically as having closed the short for the loss. Of course, eventually, the piper must be paid, and either one must take the loss(es), or a margin call will occur.

Some argue correctly that if they are taking wins larger than the mounting hedged losses, then that margin call wont occur. Of course, that is right, but if I take wins more than my losses, I profit anyway and it's mathematically the same, only simpler (for me) and with more free margin. So for me, winning is winning either way, but hedging a loss only delays the loss, it does not truly mitigate it. To some degree, this might be a matter of perspective and personal preferences for experienced traders, but new traders should be very wary of any method that promises to never lose a trade or remove the pain of losing from their trading. There is the true story of the fellow who promoted his combination hedging-martingale strategy software (though he didn't call it that) and promised that his followers would never lose another trade. It worked well for three months and then 900 accounts were wiped out in a very short time of volatile market action. Eventually, it does come down to, no pain, no gain. Of course, that is just my own humble opinion.

G
  • #2,528
  • Nov 2, 2014 10:12am Nov 2, 2014 10:12am
surely are some of you people sane ? with my 500$ account i will use a stoploss what about you with a $1k account. dont you think you should have a stoploss. Even top bank traders know they have to use a stoploss because they have funds to protect.i think we need a resident psychiatrist here at FF .


PLEASE USE A STOPLOSS
  • #2,529
  • Nov 2, 2014 11:28am Nov 2, 2014 11:28am
Quoting chrisyuto
recently i realize there is no "no stop loss" condition, even if we don't put in stop loss order, there is another kind of stop loss from the broker side, margin call..
By the way, awesome climber profile pic ... .

Lot of great analogies between different types of rock climbing and forex trading ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,530
  • Nov 2, 2014 11:30am Nov 2, 2014 11:30am
Quoting ericnyamu
surely are some of you people sane ? with my 500$ account i will use a stoploss what about you with a $1k account. dont you think you should have a stoploss. Even top bank traders know they have to use a stoploss because they have funds to protect.i think we need a resident psychiatrist here at FF . PLEASE USE A STOPLOSS
My psychiatrist recommended that I trade without a stop loss ... . He also suggested that I engage in nude public speaking ... . So, we compromised ... , and I still speak in public with my clothes on.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,531
  • Nov 2, 2014 11:56am Nov 2, 2014 11:56am
Quoting ZebraSquirl
{quote} By the way, awesome climber profile pic ... . Lot of great analogies between different types of rock climbing and forex trading ... .
For example: Alex Honnold -- climbing without a "stop loss". http://www.alexhonnold.com/videos/

Makes my palms sweat just watching him ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,532
  • Nov 2, 2014 12:21pm Nov 2, 2014 12:21pm
Quoting ZebraSquirl
{quote} My psychiatrist recommended that I trade without a stop loss ... . He also suggested that I engage in nude public speaking ... . So, we compromised ... , and I still speak in public with my clothes on.
Please PM your address so I know where the invoice for cleaning up all the liquid I just spat out should go....(not in disgust...but in sheer laughter...)
"Holy Grail" exists - accepting where is the first step.
  • #2,533
  • Nov 2, 2014 12:21pm Nov 2, 2014 12:21pm
Quoting ericnyamu
surely are some of you people sane ? with my 500$ account i will use a stoploss what about you with a $1k account. dont you think you should have a stoploss. Even top bank traders know they have to use a stoploss because they have funds to protect.i think we need a resident psychiatrist here at FF . PLEASE USE A STOPLOSS
A funny thing happened when I quite using one - I started winning, so, sorry...request denied...
"Holy Grail" exists - accepting where is the first step.
  • #2,534
  • Nov 2, 2014 1:22pm Nov 2, 2014 1:22pm
Quoting VaBikePacker
{quote} A funny thing happened when I quite using one - I started winning, so, sorry...request denied...
Ditto ... . Squared.
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,535
  • Nov 2, 2014 2:17pm Nov 2, 2014 2:17pm
Quoting stewrigh
{quote} I am really struggling with this Chicky - Is 2.5 a typo or do you really think that EU will move ''UP'' 11000 pips in any-ones life time??? I get that you might think it's a long trade atm but can't see the point of even mentioning 2.5 but maybe I'm missing something. Are you gonna tell us what option F is or leave us all to come up with our own versions?
I mentioned that 2.5000 is limit for the Open End, not that euro will go there.

I will be explaining details of option F in several hours. Currently busy with something else.
The Thief of Wall Street
  • #2,536
  • Nov 2, 2014 2:18pm Nov 2, 2014 2:18pm
Quoting muhitalam
{quote} Hello Chicky , you did this....
I am a third generation book-maker. This is what I do in forex. I don't win a lot, I don't lose a lot, I just earn my wages.
The Thief of Wall Street
  • #2,537
  • Nov 2, 2014 2:42pm Nov 2, 2014 2:42pm
Quoting VaBikePacker
{quote} Please PM your address so I know where the invoice for cleaning up all the liquid I just spat out should go....(not in disgust...but in sheer laughter...)
... and I hope you didn't spew on your keyboard ... . Spew and keyboards don't mix, as my grandpappy always told me ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,538
  • Nov 2, 2014 5:34pm Nov 2, 2014 5:34pm
all I have to say is....


Attached Image
  • #2,539
  • Nov 2, 2014 6:01pm Nov 2, 2014 6:01pm
Quoting trevwest
all I have to say is.... {image}


I'm not worthy ... .
Fireworks are fun ... as long as you don't blow your fingers off.
  • #2,540
  • Nov 2, 2014 6:56pm Nov 2, 2014 6:56pm
Quoting Chicky
{quote} I am a third generation book-maker. This is what I do in forex. I don't win a lot, I don't lose a lot, I just earn my wages.
Hello Chicky,

It`s great that you earn your wages.Many people can`t do that. Though i am new trader i also try progress slowly. I don`t have any tendency to be rich in one day. In my view Forex is very risky business. Here lot of chance to earn lot also we can loss everything.....what do you think about that?
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