stop loss. why????

[helenharris]

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Helen

 

[Depth Trade]

I've read your post 3times now and still don't get your point!! WTF has a stop loss got to do with your bank account, electronics or groceries? Are you comparing a stop loss to inflation? I bet you Richard Fuld never had a stop loss...

My personal view is a trader with no stop loss is an arrogant trader who thinks they will always be right! Same as a tightrope walker with no net, they are only one step from wipe out..this can not be a serious consideration of any trader, well, long term trader anyway...seriously..

At some point, if you continue to trade long enough, you will understand what I am saying.
What I said was to only give you a different angle to see trading from, it's nothing set in stone, just something to think about. An idea I think makes sense if you can disconnect yourself emotionally.
I do trade with a Stop Loss, I am long Slv and Gld Calls since Nov. 02, but I don't have my entire savings in my trade account. That is why I am trading Calls with an exit of only a few % as risk.
If I was to have my entire savings in a trade account and I had an edge , there would be no reason not to position the entire account trading off my profitable strategy.
The difference is instead of the savings balance fluctuating out of ones control, you are entering then exiting the market off your strategy with an edge. This is were the difference is, whether you have a profitable edge or not. Once you have an edge, you only set yourself to gain from positioning your entire account and moving in it's Ebb/Flow.

 

[Jack Francisco]

yes i am agree with you and all people like to the forex trading and you are in this market for a longer period of time still able to trade.
Using stop loss ensures that you are left with enough balance to come back in the market and trade successfully.and this is a professional job and thanks forex trading..:clap:

 

[tar]

To say it is absolute that you need a Stop Loss is not true.

+1

The op indeed has a stoploss in place and it is his whole account balance is that bad ? Maybe but not necessarily as long as he is trading with money that he can afford to lose , i cant see why this is different than using a tight 20 points stop , either way it is all priced in , ie : if you use a 2000 stop then your stop would get hit X times and if you use 200 pips stop your stop would get hit 10X times , and if u use a 20 pips stop your stop would get hit 100X times , i really dont see the difference , the only difference i see that the OP would pay the spread a few times in a quarter or a month and a daytrader with a tight stop would pay the spread few times a day !!! so if you daytrade 5 times a day then you would pay 220 pips a month as a spread which equals to 11 losses already ! is that good ?!!
The only thing i regret during my 7 years of trading i repeat the only thing is using a predefined stop loss or lets say a predefined tight stop loss ! Is it bad to use a stoploss : no maybe , is it good : nope well it depends ...
Advice for every trader here do your research , take what you read on the forums with a big grain of salt , trade small and trade with money that you can afford to lose .

 

[Shakone]

I think stops are great. I don't know why the bad feeling against them. They get you out of bad situations, they get you out when your connection dies.

My one issue is, why isn't a stop also a reversal? Stop placement deserves as much mportance as entries.

 

[rsh01]

My one issue is, why isn't a stop also a reversal?

because maybe you do not have a view of whether price will continue....say your original trade setup parameters are no longer valid (whatever you may use - for trend traders maybe the trend hasn't reversed fully but has flattened enough to warrant an exit).

if you place your stop beyond a key S (for long set up) or R (short setup) level, price can consolidate around these levels (zones wld be more apt) - taking you out then drifting sideways....and how long are you willing to tie capital up for in this one trade while it consolidates? wld you prefer to exit and then look for the market to show its hand once again?

hopefully ppl do the requisite testing to see if their stop placements are ideal, this will depend on many factors, and these factors may be different for each of us. which is why its hard to provide much advice on the subject, each to their own and all.

 

[Nicolas01]

Ideally, you want a stop and reverse system which means you will always be in the market, and the stop loss question loses its significance. Again, it is a flawed premise.

Yes, well said, that kind of situation is only possible in a dream.

 

[BeginnerJoe]

Yes, well said, that kind of situation is only possible in a dream.

There's no need to dream. If you want your money permanently exposed to the market, you can just do what the OP did: buy and hold until win. Obviously, you shouldn't buy and hold something that will expire rather quickly because just having positive thinking and conviction is not enough to compel the market to move in the way you want within the time frame you want.

 

[Lacanau]

I see where your coming from, however it makes more sense for the broker to become angry when you try to withdraw money.Which I have had in the past.

What kind of experiences have you had if you don't mind sharing.

Kind Regards

The only direct experience ive had was my broker calling my in the middle of my trading and questioning me 'where have i traded before, how long, etc' they might be standard questions, but im not sure as i'm used to this.

As for other events occuring, there are plenty of posts with stranger situations (check out the spread betting forum) that i've read while doing some reading as I was getting into forex trading. Brokers have closed accounts, reversed trade profits, and hassled customers. One more than one occasion I might add.

Of course there always runs the risk that these people are just trying to tarnish the name of the broker (possibly from competition) as this is just an internet forum. Some have provided photos though and seem pretty legitimate.

It should be noted that these have only occured with spread betting 'bucketshops' and I doubt that any lot trading broker would give you any of this

 

[kawaman]

Since when is filling stop orders fraudulent ? Filling an order is to supply a demand. It's the normal activity of the market. Filling stop orders is not only a normal function of the market, but it also guarantees profits for those doing it.

To believe they don't want to fill your stop order is funny to say the least.

I don't think I said it.

What I was talking about that some brokerage firms may hunt your stoploss os drain your money in other way (with some delay of the execution) so one had better be prudent when picking his or her broker.

BUT I am sure it is not general and you can find reliable broker.

 

[BeginnerJoe]

I don't think I said it.

What I was talking about that some brokerage firms may hunt your stoploss os drain your money in other way (with some delay of the execution) so one had better be prudent when picking his or her broker.

BUT I am sure it is not general and you can find reliable broker.

It's perfectly normal for brokers to fill orders, including stop loss orders. If you don't want the stop loss order filled, why would you put it out there ? If you put it out there, it means you are asking for it.

 

[rawrschach]

Agree with BJ (theres a first). Most people complaining about stops going off/spreads widening have no idea how markets work.

No matter what your broker calls it 'stop loss' orders don't really exist. People have stop orders for different reasons - where you're taking your loss other people may have stops to open positions, other people are stop hunting to flush out the market etc

Your orders should be at prices where you want to be filled. If the market hits my stop I want to be out, period. I don't care if it comes back in five minutes, as far as I know it could have gone another 10% against me - I was daytrading ES on May 6th 2010, I went to pee and when I came back the market was down 100points. No ****ing way I'm sitting through that with no stops. No one knows what will happen. That's why we use stops in the first place.

 

[gregw]

A stop loos allows you to quantify your risk in actual dollars
risk on a single trade
risk for a day
risk for a week...
etc...
How can you possibly trade if you haven't 1st quantified your risk.

 

[gregw]

reason #2,
at some point a trade pattern fails, why would you want to hold a position knowing that the pattern has failed.

 

[Knell]

9 times out of 10, I'll exit a trade way before my stop loss is hit because I know the trade is going against me. Entering a stop loss for me is not drawing a line in the sand to say, I WILL risk all this on this trade, but it's rather there for the unexpected e.g. someone says something stupid e.g. Giethner mentioned something silly once about the dollar maybe not being reserve currency soon, then withdrew the statement but the damage had already been done....fx pairs went crazy...

I don't therefore place trades too close, 10 or 12 pips away is too close for me as I like to exit my trade based on my view of what is happening but I'll still put a stop 30 to 40 pips away for the "unexpected"!!

So the answer as to stop loss. why????, because something unexpectantly will always happen eventually and you won't have time to react..

 

[kawaman]

It's perfectly normal for brokers to fill orders, including stop loss orders. If you don't want the stop loss order filled, why would you put it out there ? If you put it out there, it means you are asking for it.

Do you read? Because you don't want to understand my say.

But you are right : 'It's perfectly normal for brokers to fill orders, including stop loss orders.'

 

[BeginnerJoe]

It's a foregone conclusion for me to declare:

market: 1
positive thinking, strong conviction: 0

FTSE looks to be finishing the year on the year's highest level. The chance for a quick crash seems extremely remote. The recent brief dip came and went, taking all hopes of the bears with it. So the December short contracts without stops are as good as worthless.

 

[tar]

It's a foregone conclusion for me to declare:

market: 1
positive thinking, strong conviction: 0

FTSE looks to be finishing the year on the year's highest level. The chance for a quick crash seems extremely remote. The recent brief dip came and went, taking all hopes of the bears with it. So the December short contracts without stops are as good as worthless.

He can roll it over to the next contract ...

 

[ffsear]

Odd thread. Stop losses are essential! I thought they teach this **** on DAY 1 !!..

As for the thread started thinking he can keep the position until it comes round..... MARGIN CALL PLEASE!

 

[jeffre4]

update re current position as i said in my earlier posts i day trade as well as long term. i have been able to close all dec positions off and open march and jun contracts obviously some were closed at a loss but equally i had edged against the market rising. i am still short and with day trading (no stops) i have 10% drawdown at present. i believe the market will fall in the new year my valid targets lower down remain.I have not seen my account dwindle to nothing as many believed would happen. i believe we will see as low as 5100 sometime in 2013.