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Trading Without a StopLoss

  • #2,621
  • Jan 15, 2015 6:51am Jan 15, 2015 6:51am
Quoting VaBikePacker
just another piece of trading without a stop loss - stay away from trains and their tracks, or, choose what you trade carefully...
If ya can't do it right, don't do it. If ya wanna trade big positions with little money, don't do it.

I for one, had a fantastic f***in' day.
  • #2,622
  • Jan 15, 2015 7:03am Jan 15, 2015 7:03am
Quoting Bilstein
{quote} If ya can't do it right, don't do it. If ya wanna trade big positions with little money, don't do it. I for one, had a fantastic f***in' day.
Nice Bil!!! congrats!! The day is certainly going my way here as well...there's just nothing like seeing that your broker DID provide you with a platform that has buy and sell buttons coded correctly after all

you are 110% spot on - trade in proportion to your account balance. No point in betting the farm - it's a sure way to bleed out...
"Holy Grail" exists - accepting where is the first step.
  • #2,623
  • Jan 15, 2015 7:15am Jan 15, 2015 7:15am
I'm going through the forums and reading peoples' experiences regarding this huge price movement. Here's the thing, most of these folks had stop losses in play and guess what? Liquidity still bites them in the ass when they get triggered 200+ points later. Stop loss or no, anyone on the losing side of this movement is hurting. Also, I see people talking about their brokers freezing trading or closing up data feeds - I didn't experience that. Granted, there was a delay in closing off my positions but everything went through relatively smoothly considering the market conditions. Peoples' results today aren't because of "skill" or lack thereof. Today is totally good luck and bad luck. Just a few days ago, I was in the process of shifting my book to be weighted on the long side but changed my mind when the index failed to turn up. I took some small losses between last Thursday and this Monday orienting back to the short side and got lucky today and crushed it.

Point being, if you're trading the right size and can monitor the broader market as a whole, you can be prepared for this "worse case scenario" whether you're using a stop loss or not. I would have lost roughly 6% of my account today if I were on the wrong side and that's with no stop losses on 30 pairs. I'd imagine that I may have lost a few percentage points less if I had stop losses, given the lack of liquidity the market experiences with huge moves like this.
  • #2,624
  • Jan 15, 2015 7:55am Jan 15, 2015 7:55am
Quoting Bilstein
{quote} I for one, had a fantastic f***in' day.
Nice job Bilstein...

Quoting Bilstein
{quote} Peoples' results today aren't because of "skill" or lack thereof. Today is totally good luck and bad luck...
Spot on....Nobody can predict the future...no matter how many indicators are used, and whether Gann, Fibonacci, & S/R lines are drawn on a chart...

Quoting Bilstein
{quote} if you're trading the right size and can monitor the broader market as a whole, you can be prepared for this "worse case scenario" whether you're using a stop loss or not.
Excellent...

Dave
  • #2,625
  • Jan 15, 2015 8:03am Jan 15, 2015 8:03am
Quoting Bilstein
I'm going through the forums and reading peoples' experiences regarding this huge price movement. Here's the thing, most of these folks had stop losses in play and guess what? Liquidity still bites them in the ass when they get triggered 200+ points later. Stop loss or no, anyone on the losing side of this movement is hurting. Also, I see people talking about their brokers freezing trading or closing up data feeds - I didn't experience that. Granted, there was a delay in closing off my positions but everything went through relatively smoothly considering...
Can't agree more
Be water, my friend
  • #2,626
  • Jan 15, 2015 9:54pm Jan 15, 2015 9:54pm
Quoting dare123
Good-day All, I choose to stop trading with stoploss. I now trade without stoploss. What do you think about trading without stoploss? and if you are currently trading this way or you have traded this way before, kindly share your expirience.
I do not set any stoploss when I open a position, no.
But I do know, at the same time, that when should I close my position, no mater win or loss.
That means, I take action only when some certain price pattern appears.
Every step is an inseparable part of trading method.
  • #2,627
  • Jan 15, 2015 10:11pm Jan 15, 2015 10:11pm
Quoting Bilstein
Today is totally good luck and bad luck.
I suspect anyone long EUR/CHF with a guaranteed stop loss would disagree.

Not saying I'm an expert because I wasn't trading any CHF pairs but if we stick our heads in the sand and don't learn from what happened (whether affected by it or not) then how do we grow? Risk management (not necessarily a stop loss) and considering the consequences of one's actions are as important as ever.
Hope for the best, prepare for the worst.
  • #2,628
  • Jan 16, 2015 4:49am Jan 16, 2015 4:49am
Quoting dab
{quote} I suspect anyone long EUR/CHF with a guaranteed stop loss would disagree. .
With a guaranteed SL I guess you refer to the stops IG offers. But don't think they won't charge you for that. A guaranteed SL is infinitely more expensive than a normal one, so it's not a definite solution either. It all boils down to having a proper trading method and risk management.

As to the CHF dive, I believe that there've been MUCH more traders killed with a SL and high leverage than those trading without SL but with an adequate position sizing.

I was trading USDCHF without SL but with a very small position. My account took an 8% dive. Very unpleasant, completely spoilt my month. But absolutely no problem survival wise. I don't want to imagine what would have happened if I had traded with high leverage and a "safe" SL. Bye bye account.

That's the point trolls ignore. There's no complete security. And when they fail they blame it on the broker. Idiots!
Be water, my friend
  • #2,629
  • Jan 16, 2015 7:17am Jan 16, 2015 7:17am
Quoting dab
{quote} I suspect anyone long EUR/CHF with a guaranteed stop loss would disagree. Not saying I'm an expert because I wasn't trading any CHF pairs but if we stick our heads in the sand and don't learn from what happened (whether affected by it or not) then how do we grow? Risk management (not necessarily a stop loss) and considering the consequences of one's actions are as important as ever.

Problem is, there's no such thing as a "guaranteed" stop loss in FX. I often wonder if anyone bothers understanding market microstructure before undertaking this endeavor. A stop loss order is a market order that triggers when a certain level is reached. Do you know the difference between a market order and a limit order? Here's a simple way to put it: limit orders guarantee price but not execution.While market orders guarantee execution but not price.The reason it's "bad luck" is because, while you had a plan with your stop loss, the lack of liquidity and inability to match orders that comes with an event like yesterday basically rendered your "guaranteed stop loss" (read: market order) defunct. In any other market conditions, those stops would have been triggered within at least a few points. Stop losses on long EURCHF positions are orders to sell your position. Well, if there's no one buying where does your order have to go? Nowhere, so the position stays open until the market order to sell (read: your stop loss) can be matched with a corresponding order to buy.

That is why it was good luck vs bad luck. No one saw yesterday coming. Some may have guessed the SNB would remove the peg but none knew when they were going to do it. Yesterday, even brokers were having liquidity problems with dealers. Everyone on the wrong side, the brokers trying to offset those orders, and the dealers trying to fill them down the pipe had their butts reamed yesterday.
  • #2,630
  • Jan 16, 2015 7:28am Jan 16, 2015 7:28am
IG markets (Australia) offers guaranteed stop loss on forex and the cost is a +/-3 pip spread however ........and here is the small print worth reading "A Guaranteed stop Loss can only be established on trade entry, not during the course of a trade plus it must be set at least 5% away from entry.

Yes it would have helped with the CHF debacle but unless you trade continuously with them (which does add up in increased spread commission) the chances of having one in place for that event would be very small.

Given the T's and C's of the Guaranteed Stop one wonders if it would just be more effective to perfectly hedge immediately prior to the announcement and wait till the dust settles.....that is of course if your broker survives the maelstrom. :-(

I agree with you however spocktrader that the key however lies in risk management and position sizing.
  • #2,631
  • Jan 16, 2015 7:45am Jan 16, 2015 7:45am
Quoting Copernicus
IG markets (Australia) offers guaranteed stop loss on forex and the cost is a +/-3 pip spread however ........and here is the small print worth reading "A Guaranteed stop Loss can only be established on trade entry, not during the course of a trade plus it must be set at least 5% away from entry. Yes it would have helped with the CHF debacle but unless you trade continuously with them (which does add up in increased spread commission) the chances of having one in place for that event would be very small. Given the T's and C's of the Guaranteed Stop...
Brokers who act as market makers do have the ability to "guarantee" their stops. These are the shops that typically employ off-market rates for stop-running strategies. Personally, I've never used a broker like that. But even in an event like yesterday - at least from what I've been reading - brokers had trouble keeping up with the chaos as well so for brokers who guarantee their stops, I'd wager to say that they either (a) couldn't guarantee them or (b) suffered huge losses honoring them.
  • #2,632
  • Jan 16, 2015 7:53am Jan 16, 2015 7:53am
Quoting Bilstein
I'd wager to say that they either (a) couldn't guarantee them or (b) suffered huge losses honoring them.
Agreed. IG Group racked up a $30 million loss, but given their Balance Sheet they are now on the acquisition trail looking to acquire the victims.
  • #2,633
  • Jan 16, 2015 7:54am Jan 16, 2015 7:54am
Quoting Copernicus
{quote} Agreed. IG Group racked up a $30 million loss, but given their Balance Sheet they are now on the acquisition trail looking to acquire the victims.

Lol, true. I'm sure lots of corpses will get scooped up by all the big fish now.
  • #2,634
  • Jan 16, 2015 6:37pm Jan 16, 2015 6:37pm
Quoting AlwaysWinnin;7942898[B
]People who trade without a stop-loss have completely ignored the basic principle of risk management. You greatly increase your risk by not including a stop-loss. Good luck in the long run. You wont last at all.[/b]

Attached Image
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  • #2,635
  • Jan 16, 2015 8:13pm Jan 16, 2015 8:13pm
Quoting AlwaysWinnin
{quote} {image}
but is a stop loss a risk management tool or a money management tool? (I have my own opinion and have no intent of telling you you're wrong with your opinion on the matter...I'd enjoy a reasonable debate...no name slings or anything...not worth it..)
"Holy Grail" exists - accepting where is the first step.
  • #2,636
  • Jan 16, 2015 8:46pm Jan 16, 2015 8:46pm
SL in busy times are useless, they only work when someone else "buys" them. Most brokers have rigged the systems in their favour. but anyone who tells you that you can set your stop loss and feel safe is wrong. that stop loss you set has to be filled by someone willing to take that off your hands. brokers have a varied level of response to trying (or not) to offload your stop loss.

So, that stop loss you set has to be filled by someone willing to take that off your hands, in busy times ie NF Payrolls dont use them....danger Will Robinson...danger
  • #2,637
  • Jan 16, 2015 9:39pm Jan 16, 2015 9:39pm
Hi, everyone, I wonder: as for this SNB CHF big shock, is any stop loss meaningful?
I mean, all in all, the total amount of money in our account is the final and terminating stop loss, which will be seriously controlled and executed by the platform. If this final stop loss can not stop the loss, any additional stop loss is meaningless.
  • #2,638
  • Jan 16, 2015 9:55pm Jan 16, 2015 9:55pm
To my mind, no. Set the stop loss and see the pair go waaay past and then chew into your account and then past that and put you in the red. as has happened to so many just lately. (i didnt lose any $) wasnt trading thankfully. but to answer, i think no.
  • #2,639
  • Jan 16, 2015 9:59pm Jan 16, 2015 9:59pm
Quoting Dbanga
To my mind, no. Set the stop loss and see the pair go waaay past and then chew into your account and then past that and put you in the red. as has happened to so many just lately. (i didnt lose any $) wasnt trading thankfully. but to answer, i think no.
I think so. I saw so many accounts ended with -30k, -600k, etc, and they are asked to return the money by their platforms. Also I saw Alpari going down, and others ended with hundreds of millions loss............
  • #2,640
  • Jan 16, 2015 10:17pm Jan 16, 2015 10:17pm
I will set SL after I saw what happen to CHF lol
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