Breaking Even Trades

[Pipsaholic]

Hi,

Just trying to construct a winning system and wondering if anyone has had success doing risk free trades by breaking even and trailing stops? I like the idea if the trade goes against you, you don't have to make a plan to get out adding more stress to your trading.

 

[Pazienza]

Hi,

Just trying to construct a winning system and wondering if anyone has had success doing risk free trades by breaking even and trailing stops? I like the idea if the trade goes against you, you don't have to make a plan to get out adding more stress to your trading.

It is a good idea.

 

[the hare]

I've never really had much luck with that particular approach, although I did do a huge amount of analysis and testing. Everyone I know who uses trailing stops tends to use multiple exits (which I dont reccomend either)

The idea of minimising risk by accepting a break even trade doesnt really float my boat either.

 

[Hotch]

I think it would be rare that my entry point is the optimal place for a stop, but from a psychological point of view it may help. Personally not a fan.

I think it partly comes from the hard on people have for good R:R. You're in a trade, you run it for a bit so you can get a good R and post it on T2W and everyone will love you, then it comes back to 1R, well you can't close your trade now, you MUST have R:R or >1, so you hold it, and then it comes and you get stopped, which of course is much more acceptable because it's a small loss,and you were targeting a million R, expectancy must be good.

B/E is your get out, because it's easier to believe the trade didn't happen. I would suggest moving your stop early to lessen risk, but not blindly to b/e, move it somewhere sensible, if it's a bit either side, who cares, it's probably increasing your expectancy.

 

[NVP]

Hi,

Just trying to construct a winning system and wondering if anyone has had success doing risk free trades by breaking even and trailing stops? I like the idea if the trade goes against you, you don't have to make a plan to get out adding more stress to your trading.

depends on your own personality as to how you play exits......I would recommend leaning heavily towards the conservative side and building up capital slowly on low R/R plays

promises of high % of 2:1 and 3:1+ returns are for dreamers and marketeers

N

 

[Pipsaholic]

Good advice guys. Thing is breaking even reduces work when getting out when things go wrong. Yes, you will be stopped out more often but you will have more opportunities to take trades and learn more trades that when against you therefore planning your next trade better with more experience. I took a trade today and could of broke even and still won I put added stress on when I didn't have to.

 

[NVP]

Remember the market is its own master and has no comprehension (or care) for individual traders and where they enter or exit the market

As individual traders we are responsible for our own success or failure........so setting certain rules regarding where we exit will be both limiting but protective at the same time

in early Trader development a rigid structure is essential to promote growth and indeed survival.........as you get better and build experience then more freedom should be used and you can use more intuitition to decide how a trade will develop and its profitabilty.......

good luck P.....you certainly are a busy and vigorous researcher !
N

 

[Pipsaholic]

Quite surprised a lot of people are against breaking even as I was watching Steve Nisons candlestick course and mentioned that the institutional traders at top banks move their stop to 20-30 point profit even if they feel very strongly that their trade will go there way, but I guess there trading big money compared to use retailers.

 

[Pazienza]

Quite surprised a lot of people are against breaking even as I was watching Steve Nisons candlestick course and mentioned that the institutional traders at top banks move their stop to 20-30 point profit even if they feel very strongly that their trade will go there way, but I guess there trading big money compared to use retailers.

Nison's OK, but he goes around like he's got a candle rammed up his a$$.

 

[wackypete2]

Nison's OK, but he goes around like he's got a candle rammed up his a$$.

That's the light at the end of the tunnel.

Peter

 

[munchiedude]

Nison's OK, but he goes around like he's got a candle rammed up his a$$.

LMAO!

im just a noob but FWIW i do use move to b/e stops, partly to eliminate risk as much as possible and to gain experience in a trade. since most traders lose money la la la, for a beginner, a b/e trade can be considered a "win" if you gain experience from it.

just my 2 pips

 

[Splitlink]

There is a group of opinion that says that a stop should not be moved to breakeven. I do, sometimes, but only when I am starting to have doubts about it and think that it might reverse.

I entered the FT short at 1308 with level 5020.8. I put a 20 point stop on it, at 5040.8. It is, now, below 5000. Should I move to breakeven? What would you do?

 

[Splitlink]

So there you go! Stopped out as quick as that!

It still does not answer your question, though. Or, does it? The fact is that there is no answer because no one knows what is going to happen. I could have moved my stop to breakeven , got stopped earlier with less loss, but the price could have reversed again to the detriment of a profitable trade. It has happened to me innumerable times.

 

[Black Swan]

LMAO!

im just a noob but FWIW i do use move to b/e stops, partly to eliminate risk as much as possible and to gain experience in a trade. since most traders lose money la la la, for a beginner, a b/e trade can be considered a "win" if you gain experience from it.

just my 2 pips

Then why not use dynamic trailing stops? if trading off low tf's they can and do work IMHO.

 

[Splitlink]

Then why not use dynamic trailing stops? if trading off low tf's they can and do work IMHO.

Perhaps, like me, he spread bets. Mine does not permit trailing stops. Sorry, BS, I'm small fry-

 

[Splitlink]

I had time to close my trade manually but I chose to give it a chance. The market says" Never give a sucker an even break!"

 

[Black Swan]

Perhaps, like me, he spread bets. Mine does not permit trailing stops. Sorry, BS, I'm small fry-

It's me that should apologise my friend, I shouldn't assume everyone trades the same securities on the same platform..

 

[munchiedude]

i'm toying around with the idea of moving to breakeven after 10 pips in profit, 15 pip trailing stop when 20 pips in profit.

i agree tho, often you can get your breakeven trade stopped out only to find that the subsequent move is hugely profitable, however, its all risk management and i think its a tradeoff between minimising risk and allowing the trade room to breath ?

 

[Splitlink]

i'm toying around with the idea of moving to breakeven after 10 pips in profit, 15 pip trailing stop when 20 pips in profit.

i agree tho, often you can get your breakeven trade stopped out only to find that the subsequent move is hugely profitable, however, its all risk management and i think its a tradeoff between minimising risk and allowing the trade room to breath ?

The "room to breath" part can leave you breathless. but, I agree, risk management is as important as pickin' 'em. You have to be able to come back.

 

[Splitlink]

It's me that should apologise my friend, I shouldn't assume everyone trades the same securities on the same platform..

No apologies, mate. Actually, I had time to get out of my trade manually this time, but I chose to let it go to the stop. Giving it time to breath, as the saying goes.