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Trading without SL: your profound experience

  • #1
  • First Post: Oct 4, 2015 10:09am Oct 4, 2015 10:09am
Hello all,

I am trying at the moment a strategy that actually uses no SL. Negative trades I try to average out or maritingale either to BE or a smaller loss.
My experience so far (3 months. 130 trades, dailys) is split: I have serious gains, more than I ever had before with any other strategy, in fact it is the first time I ever win, but at the same time I also had serious drawdowns which almost wiped out my account. It was pure luck that they did not. So for the future I will take smaller lots.

My question now:
Is there anyone of you who trades that approach successfully?

Successfully meaning:
- NO demo (demo is totally different if you dont care about the potential drawdown or even the margincall)
- longer than a year with a high number of trades (anything else is too short to tell if it was just luck that the "one bad trade" did not happen yet)
- with serious money (if you only gamble with a few bucks for which you dont care if you lose them then it is almost like demo trading)
- with a good amount of money won (if you make 100 Dollar a year with a 10000 Dollar account then trading no matter the system is not worth the risk at all)
- preferably for a living by professionals

What are you experiences so far?

As I said I am quite unsure at the moment if this approach is suitable long term for the well known disadvantages and like to know of some good traders here what they think.

Thank you.

Regards,
Myrmica
  • #2
  • Oct 4, 2015 11:11am Oct 4, 2015 11:11am
Quoting Myrmica
Is there anyone of you who trades that approach successfully?

No; I don't believe there is.

And there are reasons for that. And they're objective, immutable, reliable, reality-based reasons that apply to everyone else just like they do to you and to me.

Please excuse my sounding a "skepchick-in-advance" but if anyone posts saying that they're a long-term, successful forex trader whose primary techniques involve Martingales, averaging-down and trading without stop-losses, I won't believe them. And nor will anyone else with any real understanding of the underlying probabilistic and statistical fundamentals of successful trading.

This isn't even "beginners' stuff": it's "pre-school stuff".
  • #3
  • Oct 4, 2015 11:27am Oct 4, 2015 11:27am
Quoting Xela
{quote} No; I don't believe there is.... This isn't even "beginners' stuff": it's "pre-school stuff".
Thanks Xela for your answer.
The thing is there are so many posts by members in other threads concerning trading without SL and they say that they are profitable.
That was the reason why I included some preconditions what is "successfull".
Would you mind pointing me to the direction where I can find these statistical fundamentals why for example averaging down does not work.
  • #4
  • Oct 4, 2015 12:39pm Oct 4, 2015 12:39pm
Quoting Myrmica
Would you mind pointing me to the direction where I can find these statistical fundamentals why for example averaging down does not work.


Like Martingale position-sizing, it can sometimes work (otherwise there wouldn't be such debates about it at all, of course), and that's the problem: it's rearranging the deckchairs on the Titanic, and eventually meets with a disaster. But to answer your specific question, I think you can find them in almost any introductory trading textbook which explains the statistical realities of betting/trading (personally, I recommend Michael Harris's book Profitability & Systematic Trading). Here are some links ...


http://daytrading.about.com/od/atoc/a/AveragingDown.htm

http://forextradingideasblog.com/the...-many-use.html

http://www.earnforex.com/articles/ho...might-be-using

http://www.daytradingbias.com/?p=835

https://www.signaltrader.com/tour/fo...orex-trading-6

http://www.benzinga.com/personal-fin...ll-day-traders

http://www.forexsocialtraders.com/averaging-down/

http://www.fxkeys.com/averaging-down...ich-one-works/

http://online-affiliate-programs.com...ding-mistakes/

http://fxgears.com/forum/index.php?topic=122.0

http://www.forexalchemy.com/the-risk...forex-strategy

http://forex-4yu.blogspot.co.uk/2009...g-down-is.html

http://www.forexfactory.com/showthread.php?p=4448808
  • #5
  • Edited 1:57pm Oct 4, 2015 1:10pm | Edited 1:57pm
The no-sl vs sl trading is a very old and still current debate.

Here's my view (10+yrs experience) about it:

The no-sl thing is just an illusion, placing a correct stoploss is very difficult, a small sl mean getting stopped frequently and uselessly, while a too wide sl means take huge losses (that could have been smaller with a small sl).

So what do we tend to do?
Answer: let's not use a sl at all!

It's like closing our eyes when faced by an unconfortable situation, even if our eyes are closed, the situation doesn't change.

No sl means simply a very big sl (margin call), depending on your trade size this big sl can be 1000 pips or 500 or 100,sure you don't see it, but it's real, and your broker is going to fill it at the right point, this usually mean the end of the account.

My advice: plan, plan, plan.
Plan your trades, and your stops too, if you don't then your broker will do it for you.
  • #6
  • Oct 4, 2015 1:34pm Oct 4, 2015 1:34pm
You can trade without a static SL ONLY-IF you have a reliable system that closes on opposite signals.
No guts, no glory
  • #7
  • Oct 4, 2015 1:58pm Oct 4, 2015 1:58pm
Thanks Xela for all those links. I will read them.
  • #8
  • Oct 4, 2015 2:00pm Oct 4, 2015 2:00pm
Quoting abokwaik
You can trade without a static SL ONLY-IF you have a reliable system that closes on opposite signals.
So do you trade without SL and average down for example?
  • #9
  • Oct 4, 2015 2:01pm Oct 4, 2015 2:01pm
Quoting tunera
The no-sl vs sl trading is a very old and still current debate. Here's my view (10+yrs experience) about it: The no-sl thing is just an illusion, placing a correct stoploss is very difficult, a small sl mean getting stopped frequently and uselessly, while a too wide sl means take huge losses (that could have been smaller with a small sl). So what do we tend to do? Answer: let's not use a sl at all! It's like closing our eyes when faced by an unconfortable situation, even if our eyes are closed, the situation doesn't change. No sl means simply a...
Planing ,when you have them, is easier said then done
  • #10
  • Oct 4, 2015 2:07pm Oct 4, 2015 2:07pm
If you don´t have a 100% plan...you will blow your account...
Ever heard of "Black Swan"...?
  • #11
  • Oct 4, 2015 2:29pm Oct 4, 2015 2:29pm
Quoting Myrmica
{quote} So do you trade without SL and average down for example?
No averaging down. I use many systems. some of them don't have a fixed static SL, they close trades on opposite signals.
No guts, no glory
  • #12
  • Oct 4, 2015 5:30pm Oct 4, 2015 5:30pm
Quoting tunera
The no-sl vs sl trading is a very old and still current debate. Here's my view (10+yrs experience) about it: The no-sl thing is just an illusion, placing a correct stoploss is very difficult, a small sl mean getting stopped frequently and uselessly, while a too wide sl means take huge losses (that could have been smaller with a small sl). So what do we tend to do? Answer: let's not use a sl at all! It's like closing our eyes when faced by an unconfortable situation, even if our eyes are closed, the situation doesn't change. No sl means simply a...
Agree... No sl could work for you a few times you get out with BE or small profit (if you are lucky)but then the one time when market wouldn't turn around for shit...and you even start " Average out" as the position falls deeper and hope that there will be a reversal you get introduce to new term "margin call"... How do i know? done it ....last time about 12 years ago ...Never again ! IT WORKS UNTIL IT DOESN'T!!!


watch this video guy with no sl or plan whatsoever

Inserted Video
  • #13
  • Oct 4, 2015 6:52pm Oct 4, 2015 6:52pm
Quoting Myrmica
Hello all, I am trying at the moment a strategy that actually uses no SL. Negative trades I try to average out or maritingale either to BE or a smaller loss. My experience so far (3 months. 130 trades, dailys) is split: I have serious gains, more than I ever had before with any other strategy, in fact it is the first time I ever win, but at the same time I also had serious drawdowns which almost wiped out my account. It was pure luck that they did not. So for the future I will take smaller lots. My question now: Is there anyone of you who trades...

I Believe approaching without SL (unless you can predict the future) is running an unnecesary risk , and is poor moneymanagement, i guy talked me once about risk, he said ''there are 2 types of risks, the ones you can curb and the ones you cant''... i believe setting SL is the first type of risk,if you set it , youll have greater probability of success...

But if you trading method is without stop loss , i suggest you have at least a mental SL and stick to it disciplined, or be in front of the trading chart all day

Hope this help you
  • #14
  • Oct 4, 2015 9:53pm Oct 4, 2015 9:53pm
There is no such thing as SL free trading. Depletion of your trading account / capital is an effective SL point. You may not know SL price level initially, but eventually you will.

Even martingale / grid folks have one. They let position to go in red hoping for a bounce back. In some cases the bounce does not happen or not soon enough. Some claim to take trend into account and finally close out positions deeply into red as hopeless. That would be effectively a stop loss.
  • #15
  • Oct 4, 2015 11:31pm Oct 4, 2015 11:31pm
[quote=Myrmica;8523155]Hello all, I am trying at the moment a strategy that actually uses no SL. Negative trades I try to average out or maritingale either to BE or a smaller loss. My experience so far (3 months. 130 trades, dailys) is split: I have serious gains, more than I ever had before with any other strategy, in fact it is the first time I ever win, but at the same time I also had serious drawdowns which almost wiped out my account. It was pure luck that they did not. So for the future I will take smaller lots.

Hi Myrmica,

I have been trading for several years (reasonably successfully now after a long learning curve) and I have a couple of observations that may help you:
1. I don't know any traders who have survived for a long time who did not use stop losses
2. martingale systems are 100% certain to blow your account in the end

The problem with martingale systems is that they are very alluring to the psyche and they very often do "work" in the sense that you get out with breakeven/small loss after being in a big hole. However, they eventually get you into a single-trade-is-betting-the-whole-account scenario as you keep adding to the losing position. Generally, you get away with it but, in the end, one day the market will simply keep going and you are blown away. It is 100% bound to happen sooner or later.
Much the same applies for trading without stop losses. It's slightly less bad as at least you aren't further building the losing position by just not having a stop loss.

Being a successful trader over a prolonged period is mostly about great risk control and the problem with martingale systems and/or operating without stop losses is that they forego risk control for the hope of loss aversion - which is bound to fail sooner or later. I believe you are doomed to failure going down either of these routes.
  • #16
  • Oct 5, 2015 4:57am Oct 5, 2015 4:57am
Quoting Xela
{quote} No; I don't believe there is. And there are reasons for that. And they're objective, immutable, reliable, reality-based reasons that apply to everyone else just like they do to you and to me. Please excuse my sounding a "skepchick-in-advance" but if anyone posts saying that they're a long-term, successful forex trader whose primary techniques involve Martingales, averaging-down and trading without stop-losses, I won't believe them. And nor will anyone else with any real understanding of the underlying probabilistic and statistical fundamentals...
Same here, finding it hard to believe that this person is a profitable trader..and one who thinks not using SL is the next best thing to Gbush Junior..lol,
  • #17
  • Oct 5, 2015 8:11am Oct 5, 2015 8:11am
NO MATTER what, you always have a SL, even if you do not set one yourself. A margin call is also a SL which is set by broker and you sign a contract agreeing to in the beginning. So in essence, you always have a stoploss and unlike other financial instruments where losses can exceed your entire balance, Forex is only limited to your balance(with the exception of some minor cases). Given that saying a martingale system is incorrect way to trade is not true! Especially coming from someone who provides 0 history on trading from any method. Talk is cheap, however here is one martingale method that has exceeded 2 years now with only one time where the DD% got really high. and it still survived. http://www.myfxbook.com/members/FX_H...er-real/694954
The key for any martingale system is understanding the market conditions in which you are in! Markets pricing in subsequent rate hikes or the GFC will not bode well with a mean reversion method! Obviously.

Secondly, what if instead of depositing a HUGE amount with one broker like a typical investment decision, you put maybe 1/10th of that into many brokers that could earn 200%+ a month with the chance also of 100% loss? It is definitely doable and can provide MORE than enough account statements to give an example of this-think overnight millionaire. Yes the fact is it will blow at some point, but the risk is accepted and you know your bottom line. You see it really doesn't matter what risk you take, it is only understanding your risk and what you are willing to lose. To say you should only trade with 1:2 fixed static is bollocks for trading FX.
All posts are my personal opinion
  • #18
  • Oct 5, 2015 8:59am Oct 5, 2015 8:59am
Hello, Myrmica!

I suggest you to take a look at this thread. Don't read the whole thread - read just OP's posts (dnabrasil).
He trades without SL and, in my opinion, he proved at least a few times that his philosophy can work. The idea is to keep some % of your money on a brokerage account, to compound and withdraw regularly.

Regards,
Artem
Let's go with the flow
  • #19
  • Oct 5, 2015 12:21pm Oct 5, 2015 12:21pm
Quoting Rtm
NO MATTER what, you always have a SL, even if you do not set one yourself. A margin call is also a SL which is set by broker and you sign a contract agreeing to in the beginning. So in essence, you always have a stoploss and unlike other financial instruments where losses can exceed your entire balance, Forex is only limited to your balance(with the exception of some minor cases). Given that saying a martingale system is incorrect way to trade is not true! Especially coming from someone who provides 0 history on trading from any method. Talk is...
Wow quite impressive that one.
Although I would not dare to martingale that aggressively.
  • #20
  • Oct 5, 2015 12:24pm Oct 5, 2015 12:24pm
Seems like most traders here, especially those who claim to have more experience are opposing averaging down or martingaling positions.
Not a nice prospect for me, even if I appreciate your honest answers, because this was and is the only time I was winning.
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