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Trading without SL: your profound experience

  • #21
  • Oct 5, 2015 1:35pm Oct 5, 2015 1:35pm
It only takes 1 trade that doesn't come back after going red....and your entire account is gone.
Average down or martingale and the process of blowing account will be even faster because you increase your size and margin used.
  • #22
  • Oct 5, 2015 4:39pm Oct 5, 2015 4:39pm
trading without stoploss is possible and doable. There are a few keys to it:

1. understand completely the condition entering any trade puts your account in.

2. understand completely how far away a margin call is.

3. in order to have a complete context of price so that you can trade with no stop loss, you have to have a LARGE data set.

4. no more than 4-6% at risk depending on the pair you're trading.

** these ideas apply strictly to retail forex. Not futures. Not any other market.

A no stop trader I happen to know of: http://www.forexfactory.com/jalol
"Holy Grail" exists - accepting where is the first step.
  • #23
  • Edited 6:33pm Oct 5, 2015 6:18pm | Edited 6:33pm
When talking about stop loss one should always define what they mean with it.

The simplest stop loss is the one that you send to the broker to indicate that that's where you want to get out. There can be multiple types of stop losses like these.
-very risky with leverage in terms of some black swan type event - (tempted to say that small positions in uncorrelated things could be better if stop is far enough but I suspect that when black swan hits, spreads could go super wide everywhere - and infact they did in many things during the black monday open)

mental stop - this might work for longer term trades where you might scale into a position over days or weeks but maybe some condition would invalidate the trade
-could still end up losing say years gains like many funds have

using options to limit losses - simplest being to buy a put but once you realize how these lose value quick, you'd look into something more elaborate depending on the situation
-constant bleeding through theta and trade/spread costs (you could also sell options to offset those costs but margin requirements on those options sold can change)

algo stop, to exit position at loss but not send the order in advance
-volatility of unexpected magnitude can still stop you out

averaging down
-black monday type risk where you might be buying on the way down and then decide to stop out but there was no one buying at any price - bad if you are using broker margin as they might liquidate you at the bottom


This pretty much shows that directional speculation is more than just a timing challenge in terms of long term survival and so very few professionals do such. (you could cleverly combine variety of the things mentioned above and maybe overcome many of the challenges but easier said than done)
  • #24
  • Oct 5, 2015 6:40pm Oct 5, 2015 6:40pm
I think everyone at the very least should have an emergency stop for obvious reasons. However I prefer "stops" based on opposite signal triggers. Mostly because most successful trades need room to "breathe" before they go into profit. That amount varies almost every time which is why I don't used fixed SL.
  • #25
  • Oct 6, 2015 9:13am Oct 6, 2015 9:13am
I think what a trading without stoplosses no fit for long time trading. Becouse you can get stop out if the market will have high oscillations. But if you have the right to place a ladder orders, you can avoid catastrophic losses.
  • #26
  • Edited 8:20am Oct 7, 2015 1:06am | Edited 8:20am
trading without SL is certainly possible, but....you will have to plan your system for every eventuality to survive and make a good living.

a good idea is to follow a pair for as far back as 2008 and see how you can survive that market. only then can you make a good plan with a lot of hard work.

to trade "ranging" instruments is most profitable, but also more risky to trade long AND short - look at their yearly range for say 10 years - eg AUD/NZD
for trending instruments: only trade in the direction of the trend, so long OR short only.

and diversify: don't have all your money on 1 pair and trade small: you can still at least double your account every year.
never average in at certain intervals: only when price is stalling and heading back in your direction over a few days - place another trade for a better average price.

I trade 10 different "unrelated" instruments - if 1 or 2 break your boundery, 8 others still make money.
when there is big news (interest change etc) and price charges past your line: learn to hedge and unhedge.

some good ideas: look up xaron - medium grid trading (bird watching in lion country)
and also page 1 Super Carry Trade by Dreamliner click on "FXKnightRider`s post".
  • #27
  • Oct 7, 2015 12:36pm Oct 7, 2015 12:36pm
Hello yonnie,

may I ask how long you have been trading this approach and if you do it for a living? Do you also average in your trades when they go against you and do you have a time/maximum loss when you close them despite being in loss? Because it is possible that price never comes back for a long long time not even to your breakeven point.
  • #28
  • Oct 7, 2015 1:09pm Oct 7, 2015 1:09pm
No SL, no martingale, yes lock, yes waitingprice return...
https://www.mql5.com/ru/signals/82524
  • #29
  • Oct 7, 2015 1:55pm Oct 7, 2015 1:55pm
Quoting Myrmica
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.
With Martin Gale,
You never lose,
Until you do,
Then that's the end of you.....
A lion doesn't concern itself with the opinion of sheep.
  • #30
  • Oct 7, 2015 2:29pm Oct 7, 2015 2:29pm
Quoting Myrmica
Hello yonnie, may I ask how long you have been trading this approach and if you do it for a living? Do you also average in your trades when they go against you and do you have a time/maximum loss when you close them despite being in loss? Because it is possible that price never comes back for a long long time not even to your breakeven point.
I have been trading full-time since 1998, first trading under 1 cent shares on the ASX, but now trading 10 different and unrelated instruments across forex, indices and commodities.

Yes, I do average in when price is getting out of the grid and is coming back towards the grid, but the trade size is the same as the first trade.

however if there`s big news about and I don't know how far the price will go against my position, I will hedge.
when price is stalling and is coming back towards the grid, I will close out the hedge at a profit and average in for the ride back.
if price changes direction again, I will hedge again.

so I never try to close out at a loss.
all trading done on the daily TF
  • #31
  • Oct 7, 2015 3:01pm Oct 7, 2015 3:01pm
Quoting yonnie
{quote} I have been trading full-time since 1998, first trading under 1 cent shares on the ASX, but now trading 10 different and unrelated instruments across forex, indices and commodities. Yes, I do average in when price is getting out of the grid and is coming back towards the grid, but the trade size is the same as the first trade. however if there`s big news about and I don't know how far the price will go against my position, I will hedge. when price is stalling and is coming back towards the grid, I will close out the hedge at a profit and...
Wow Really interesting. You are the first one who says it is working for you, and not only with demo or playmoney.
What I wonder is how you manage it to get out of positions if they go against you. I had it several times that almost my account was wiped out, even with relatively small positions sizes. I also try to trade on the daily TF.

How do you decide to TP? Do you let your winners run or do you TP with ATR or something?
  • #32
  • Edited Oct 8, 2015 2:22pm Oct 7, 2015 5:30pm | Edited Oct 8, 2015 2:22pm
yes, relatively small position sizes, but......in 1 pair or several pairs but correlated?
in forex you could trade uncorrelated pairs like A/N E/G S/J and C/U
branch out to indices, oil, gold, natural gas, copper etc.
just start with no leverage per pair at first to learn the ropes: its easier on the nerves.

TP depends on ranging or trending market.
ranging market I buy at the bottom scaling in because I don't know how low price will go.
if I need 6 lots: say I buy 1 lot @ 0.9380 - 2 lots @ 0.9340 - 3 lots @ 0.9300
if price only get down to 0.9340, at least I got 3 lots riding on it..........
scale out again at say 0.9650 - 0.9690 - 0.9730 if 0.9740 is the high of the range.

in the meantime scale in sell orders @ 0.9650 - 0.9690 - 0.9730 for the ride down hopefully.

trending market is different
if the trend is up, I have a trend line along the bottom and scale in around there.
look at the chart how high a "normal" wave ends up.
when it gets there about and price stalls one day and dips the next day or we get 2 down days, I will sell on the third day if price goes below the 2nd day low.
  • #33
  • Oct 8, 2015 8:31am Oct 8, 2015 8:31am
Quoting yonnie
yes, relatively small position sizes, but......in 1 pair or several pairs but correlated?
As far as I'm concerned with forex, trade a single pair. Up volume appropriately with experience while still using good EXCELLENT money management. Take the time to learn what makes one pair tick and you'll have plenty of ROI AND opportunity to apply the same principles to other pairs later if you so desire.
"Holy Grail" exists - accepting where is the first step.
  • #34
  • Oct 8, 2015 9:30am Oct 8, 2015 9:30am
My profound experience is this:

trading without a stop-loss = your account is blown away quickly

trading with a stop-loss = your stops are always hit, so your account is blown away slowly

Either way, you lose money because the fx market is rigged for you to lose. Big banks control forex and they didn't become big by giving money away.
  • #35
  • Oct 8, 2015 1:31pm Oct 8, 2015 1:31pm
Quoting gravitist
My profound experience is this: trading without a stop-loss = your account is blown away quickly trading with a stop-loss = your stops are always hit, so your account is blown away slowly Either way, you lose money because the fx market is rigged for you to lose. Big banks control forex and they didn't become big by giving money away.
Trading without a stop loss is only possible when you realize that trading FX is not a sprint. On your other points I do totally agree re: stops always hit, account blown away, losing money because of a rigged, manipulated, grossly profitable at the traders expense operation known as "retail forex broker"..
"Holy Grail" exists - accepting where is the first step.
  • #36
  • Oct 9, 2015 6:26am Oct 9, 2015 6:26am
Yes, I don't declare SL while placing order. But, i do have inbuilt SL which closes trades as per the rules defined. More importantly, it is the money management that wins you profits than the strategy itself

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  • #37
  • Oct 9, 2015 2:57pm Oct 9, 2015 2:57pm
Quoting forexspidey
Yes, I don't declare SL while placing order. But, i do have inbuilt SL which closes trades as per the rules defined. More importantly, it is the money management that wins you profits than the strategy itself {image}
How long have been trading that strategy which looks good at first sight although having an inbuilt SL is actually like having a real SL.
  • #38
  • Oct 9, 2015 5:10pm Oct 9, 2015 5:10pm
Quoting Myrmica
{quote} How long have been trading that strategy which looks good at first sight although having an inbuilt SL is actually like having a real SL.
the best part of a "mental stop loss" is that the broker can't see it. the worst part about a mental stop is, well, it's up to the trader to honor it...probably the toughest part, but, statistically if the trader isn't over leveraging and has a solid edge the chance of major damage is greatly reduced anyway.
"Holy Grail" exists - accepting where is the first step.
  • #39
  • Oct 9, 2015 5:49pm Oct 9, 2015 5:49pm
Yes.

Trading the account as opposed to trading prices and doing so without stop losses is very possible. There's no real secret to it other than trading small (relative to the account) and being well-capitalized. There's also no real "advantage" to doing it, it's more work than setting stop losses for individual trades and moving on but if you're looking for an inherent advantage over any other trading method, there really isn't one.

People who say "one wrong trade and the account is gone" are the types of people who were holding huge 400:1 leveraged long positions in the EURCHF in their $2000 trading accounts when the pair collapsed. They still fail to understand liquidity and the fact that in a "black swan" type event, your stop isn't going to mean anything anyway. It's not a "holy grail" method either. It's slow, repetative, methodical, and at times, nerve-racking.

Source: Been doing it for a long time.
  • #40
  • Oct 9, 2015 6:28pm Oct 9, 2015 6:28pm
Quoting Bilstein
Yes. Trading the account as opposed to trading prices and doing so without stop losses is very possible. There's no real secret to it other than trading small (relative to the account) and being well-capitalized. There's also no real "advantage" to doing it, it's more work than setting stop losses for individual trades and moving on but if you're looking for an inherent advantage over any other trading method, there really isn't one. People who say "one wrong trade and the account is gone" are the types of people who were holding huge 400:1 leveraged...
Well put IMO. I never have traded or been concerned with the EUR/CHF, and that's not out of fear of it or anything, I just trade a few pairs and that's that.

I keep thinking I'll get back around to a spreadsheet I made a couple of computers ago that I had setup to track margin usage completely and analyze how many pips it actually is to a margin call based on various trade entries on quite a few different pairs. With responsible trade size, you can be in a situation where a pair has to run thousands of pips against you before you have a real problem.
"Holy Grail" exists - accepting where is the first step.
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