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Do you use stoploss?

  • #21
  • Sep 23, 2009 1:02am Sep 23, 2009 1:02am
Quoting pgpb
A friend of mine tells me he hardly ever takes a loss.
He is right more often than not, but when a trade goes against him, he just waits and even if it goes against him a few hundred pips he just hangs in there.

When I look at my own trading, I am also often on the right side of the trade, but sometimes it goes against me and hits my stop loss (45 pips).....but if I had a larger stop it would have eventually come back and gone my way, or at least come back to let me out without a loss

I need to think this through....so i was browsing on FF looking...
Dear pgpb,sometimes that happen to me during my trading. it hit my stoploss then the price go to my direction. so I make this thread just want to know what others do by using stoploss or not. If you found what you're looking for, please let me know. thanks
  • #22
  • Sep 23, 2009 8:06am Sep 23, 2009 8:06am
Quoting ronald_fsm
Dear pgpb,sometimes that happen to me during my trading. it hit my stoploss then the price go to my direction. so I make this thread just want to know what others do by using stoploss or not. If you found what you're looking for, please let me know. thanks
After some input from some other traders, I have abandoned this idea of not using stop losses.

In some markets the currency will range, but sometimes it will trend and if it trends away from the direction you are trading it may move thousands of pips in one direction.....such an occurance could blow up your account.
  • #23
  • Sep 23, 2009 10:15am Sep 23, 2009 10:15am
Quoting ronald_fsm
thanks for your comment. I already try scalping , and I think it's difficult but I haven't yet try swing/day trade. because I have heard that trader who have little deposit should use scalping better than bigger TF. please CMIIMW. thanks
PS: sorry for bad in english.
I already try scalping , and I think it's difficult but I haven't yet try swing/day trade.

IMO Scalping requires a lot of skills. I've heard a lot of traders recommending studying price action on larger time frames first (Weekly, Daily). And only whenever you can sustain your account few consecutive months in profits you can start thinking of shorter frames. The reason for that is that shorter time frames produce a lot of noise (false signals) which makes it hard for novice to learn/distinguish certain patterns.

I have heard that trader who have little deposit should use scalping better than bigger TF

You should try it all and use time frame that fits your personality. It does not have anything to do with account size. Account size, in its turn, dictates (with proper risk/money management) how much you can risk/trade at any given time. If you follow the rule of risking not more then 2% of your account on any trade, then you will not make much with $1000 account, does not matter if you scalp or swing trade. I will give you a short example. Let's say you have tested system that gives you 2:1 win ratio. 2 wins for 1 loss. People make mistake simplifying it "Ok, i'm gonna make 10 trades and since it I'm at 2:1 then I'm going to have 3 losses over 6 wins". But the sad reality is that you might hit 10 loses before you hit your 20 wins. And if you where risking 10% of you account on those trades you will be wiped out before you can collect your winnings. 7-10 lost trades in a row is pretty common in this business.

Learn, practice, and save money, until you have big enough account where you could implement safe MM.

Good luck.
  • #24
  • Sep 23, 2009 1:55pm Sep 23, 2009 1:55pm
FSM,

I am no expert. But you see, broker can see everything we enter in our platforms. Because it is THEIR platform. Ofcourse they don't play or pick on you in particular. They go after the masses. And the masses (small players like us) will mostly likely look at intraday chart for S/R, round number, pivots, etc. so most likely we will have SL or TP near or very close to one another on any given trades. Take a look at Fridays price action. Especially after 12 PM EST. You will see lots of spikes either way.


Quoting ronald_fsm
I always set SL more than my ACTUAL risk! What I mean by that is our trades are being watch or enter by the broker, so in essence, they can see everything! Therefore, I am not going to EXPOSE my risk. Have you ever enter a SL and notice price tends to hit your SL exactly to the pip and then retrace !!! Why do you think that is the case? Exactly. The broker know where you and most other places SL and will drive price toward them then retrace immediately (this happen on most Fridays).

Dear seapips,
thx for the reply. yes...
  • #25
  • Sep 24, 2009 3:19am Sep 24, 2009 3:19am
Take a look at the G/U at London open today. Before London open 30 min. I enter a long trade because price action along with my indicators show potential LONG. I looked at E/U and it is going up at the same time U/J is going down, everything was in line as expected. I was up about 15 pips at London Open and then.....KABOOM, KABOOM price drop quickly on the G/U but not on the E/U. I waited and waited to see if E/U drop but it doesn't,which is not normal. So once price cross under the short term trendline, I exited with 35 pips loss....although I had my SL set at 55, I cut my loss early. If I didn't exited or put in my SL, I would have lost over 150 pips from this run down in less than 30 minutes. And still E/U has not fallen. I reenter short and make back over 60 pips. So all in all make 30+ pips. Not bad but it could have been devastating loss had I not use SL? Just go to show why you should use SL always. YOU JUST NEVER KNOW WHAT MIGHT HAPPEN AT ANY MOMENT. SL is the safety net or the parachute which will save your account from crashing. I found out 10 minutes later from Bloomberg that BOE president has made a comment regarding how Sterling weaken will help England out of recession. So the Sterling drop. Even if I hadn't exited manually, worst case was my loss of 55 pips instead of more 175+ painful pips. And that is $10 per pip.




Quoting SeaPip
FSM,

I am no expert. But you see, broker can see everything we enter in our platforms. Because it is THEIR platform. Ofcourse they don't play or pick on you in particular. They go after the masses. And the masses (small players like us) will mostly likely look at intraday chart for S/R, round number, pivots, etc. so most likely we will have SL or TP near or very close to one another on any given trades. Take a look at Fridays price action. Especially after 12 PM EST. You will see lots of spikes either way.
  • #26
  • Sep 24, 2009 1:11pm Sep 24, 2009 1:11pm
thanks pgpb,solvman,seapips for your explanation about using SL. right now i using SL when i open position. but most of the time it hits my SL. so the question is how to place your SL at a right place? am I wrong to place my SL so it always hit. thx for the explanation.

Wish the best for all of you.
  • #27
  • Sep 24, 2009 1:16pm Sep 24, 2009 1:16pm
Quoting solvman


I have heard that trader who have little deposit should use scalping better than bigger TF

You should try it all and use time frame that fits your personality. It does not have anything to do with account size. Account size, in its turn, dictates (with proper risk/money management) how much you can risk/trade at any given time. If you follow the rule of risking not more then 2% of your account on any trade, then you will not make much with $1000 account, does not matter if you scalp or swing...
dear solvman, may I know what TF do you use? and what pair do you recommend for newbie? thx
  • #28
  • Sep 24, 2009 1:29pm Sep 24, 2009 1:29pm
1. Do you use stoploss or not?
If you don't you risk losing your entire account.

2. Why do you use stoploss and why you don't?
I use it because I know what I want from a trade. There is always a certain level at which the trade is not what I want any longer. If that level gets taken out I don't want to be in the market anymore.

3. How many pips do you use your stoploss?
If you set your stop based on pips or money, you have nothing to do with the markets. You are simply trading your greed/fear and your bank account. Stop losses are set where the market tells me to place them.
The Essentials of Trading: Emotions, Risk Mgt, Price.
  • #29
  • Sep 24, 2009 1:36pm Sep 24, 2009 1:36pm
Quoting Slight
1. Do you use stoploss or not?
If you don't you risk losing your entire account.
Could you please explain why?
  • #30
  • Sep 24, 2009 1:46pm Sep 24, 2009 1:46pm
Sure.
There is a trader that I know of who gets great ideas like the following: he watches price move during the day, and at some point he has to go shopping with his wife and kid. So, before he leaves and gets some groceries for the weekend he deletes his stop order because price is moving against him and he doesn't want to be knocked out. The guy killed his account at least twice doing that.
It is questionable if he used the correct position size; it might even be questionable if he should be trading at all. But this is for sure a way to get your account minimized, if not wiped out, in a matter of hours, depending on market conditions.
Not using a stop loss can kill you, especially if you are greedily horsing around intraday during news time
The Essentials of Trading: Emotions, Risk Mgt, Price.
  • #31
  • Sep 24, 2009 1:50pm Sep 24, 2009 1:50pm
I think not the stop is the problem but the leverage. I've lost so much money using stops till I found what works for me (not using stops)...
  • #32
  • Sep 24, 2009 2:02pm Sep 24, 2009 2:02pm
sure enough. to each his own. but you gotta know what you are doing, or what I was talking about will happen to you. anyhow, I think for the majority of traders, psychological issues will ruin the account not using stops .. you know, the whole "It's coming up again, I am sure it's coming up again ... it's GOTTA come up again" while they are watching as price drops and drops .. it will take too long for them to realize that it doesn't come up again. follow your plan, and you'll be fine. no offence to all those not using stops
The Essentials of Trading: Emotions, Risk Mgt, Price.
  • #33
  • Sep 24, 2009 2:15pm Sep 24, 2009 2:15pm
I dont use stoploss as i base my trades on what EURCHF is doing in the market, even though i dont trade that pair directly.

If i were just trading EURCHF then i probably would use a stoploss.

So, like others have said, it based on your initial strategy.
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  • #34
  • Sep 25, 2009 1:52am Sep 25, 2009 1:52am
Adjusting(lowering) position size can allow you to dramatically increase your SL size, reducing the susceptibility to noise from churning, s/r testing, etc.. before a big move.

Minimizing your leverage as Xaron pointed out has a similar effect to lowering position size. Both will reduce chances of getting stopped out or exceeding your risk profile.

It seems to me that people hate the idea of smaller positions as they fear a loss of profit that they could have earned when their trades DO win. This is greed...dont get caught up in that game or at least slowly anti-martingale until a loss.

Know your system and its expectancies. Small positive expectancy will still get you rich.... just slower.
  • #35
  • Sep 26, 2009 9:07am Sep 26, 2009 9:07am
Quoting solvman
I already try scalping , and I think it's difficult but I haven't yet try swing/day trade.

IMO Scalping requires a lot of skills. I've heard a lot of traders recommending studying price action on larger time frames first (Weekly, Daily). And only whenever you can sustain your account few consecutive months in profits you can start thinking of shorter frames. The reason for that is that shorter time frames produce a lot of noise (false signals) which makes it hard for novice to learn/distinguish certain patterns.

Good...
thx solvman for the reply. I've think about larger TF like 4H,daily or weekly, but a larger TF need more SL than scalping right? CMIIW. thanks
  • #36
  • Sep 26, 2009 10:05am Sep 26, 2009 10:05am
Quoting Xaron
I think not the stop is the problem but the leverage. I've lost so much money using stops till I found what works for me (not using stops)...
dear xaron,thx for keep posting in my thread.
yes I lost my money because most of them hit my SL. I don't know why most of my position always hit my SL first before it retrace back to the same condition as i predict.
but In other position, I don't use SL at all , I get floating till -400pips and hope the price will back, woow thats a very big floating that could blow my account. so from that 2 condition I get more confused : should I use SL or not???
thanks everybody for sharing
PS:anyway I subscibe to your thread too, because I want to learn about your strategy and your system,etc. good luck for your trading.
  • #37
  • Sep 26, 2009 1:10pm Sep 26, 2009 1:10pm
Quoting ronald_fsm
dear solvman, may I know what TF do you use? and what pair do you recommend for newbie? thx
I am a beginner myself. I've tried as you are shorter time frames at first and miserably failed. In addition, I lost my interest in indicators and numerous systems. Although, some of them might and do work. I felt like it is more important to understand price action. I was really inspired by threads of James, ClockWork, and others in commercial forum here at forexfactory. I really liked idea of learning price action before all, so I switched to larger time frames, because it is less noisy. I plot my S/R levels on Weekly, and then try to follow price action on 4h. I practice on a lot of different pairs. It is all about learning price action. I tend to deal with major crosses more then other pairs. Larger time frame gives you TIME to get fill of the market and think everything through. I always trade in trend direction. Although, there are plenty of set ups for counter trend trading, I am not quite sure and ready for that yet.

Best of luck.
  • #38
  • Sep 26, 2009 1:17pm Sep 26, 2009 1:17pm
Quoting ronald_fsm
thx solvman for the reply. I've think about larger TF like 4H,daily or weekly, but a larger TF need more SL than scalping right? CMIIW. thanks
In general, I would say yes. Because you run your trades longer and expect bigger pip return from your trades. It is different for every setup though. Do not risk more then 2% of your account at any given time.
  • #39
  • Sep 26, 2009 2:24pm Sep 26, 2009 2:24pm
Quoting ronald_fsm
Dear traders, I want to ask you questions about trading:

1. Do you use stoploss or not?
2. Why do you use stoploss and why you don't?
3. How many pips do you use your stoploss?
thanks anyway
1. yes -but i have a very flexible understanding about them-.
2. because there is always a price in my strategy that tells me i am in the wrong side of the tape.
3. that depends on price action.
  • #40
  • Sep 26, 2009 6:54pm Sep 26, 2009 6:54pm
I trade using a safety stop loss > 30 pips at order entry on my favorite trading period of 15 minuts. My "real" stop loss is notional or mental. As the trade progresses, I tighten up the stop loss based on the ATR and the price action. If the trade is moving against me, I will place my mental stop loss and let the market take me out or turn around and go back to breakeven.
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