stop loss. why????

[timsk]

Anyway! A profit is a profit as they say. This is trade 3 that gives me +23 net for the same 40 that I started with.

Hey Split,
I think it's even better than that. You have a 100% winning strategy, so you're not even risking 40 points as you never lose! Quite literally - Every 1's a winner!

Tim.

 

[Splitlink]

Hey Split,
I think it's even better than that. You have a 100% winning strategy, so you're not even risking 40 points as you never lose! Quite literally - Every 1's a winner!

Tim.

There you go! I knew that there was a less pessimistic way of looking at it.

I do lose, BTW, I've just lost 3 on my 4th trade. I reserve the right to close a trade to conserve my profit when I think that it is going wrong. Net profit now +20.

 

[Splitlink]

Ok, trade 5 +5.5 and trade 6 -17.3

I don't know whether this last trade would have recovered before the 40 point stop but I do not have the character to wait and find out.

This kind of trading is not for me. The stops have got to be less for my peace of mind so I am reverting to my normal trading style.

Anyone who trades with no stop has balls of steel and my respect, is all I can say.

 

[timsk]

Ok, trade 5 +5.5 and trade 6 -17.3.

Hi Split,
Had you left trade #6 to either come good or hit your -40 stop loss, would you have maintained your 100% winning record?
Tim.

 

[Splitlink]

Ok! Rub it in! But you have to speculate to accumulate!

How will trade 6 end? !424 EuroGBP Opened long at 0.80693 Stop 0.80293 ie -40. 1611Closed 0.80520 -17 Now it is 0.80553 . I don't have the character to wait that out. Maybe, if I was out all day and left the stop on but otherwise I have to cut it.

 

[safvan]

This is beginners delusion - "I won't close the trade therefore I'm not making a loss".

There's no point in doing the hedge. It's exactly the same as closing the trade for a loss at 1.29 and re-opening it again at 1.30.

Your problem is that you haven't learned to take a loss and, as I mentioned before, you have no confidence in your trading to be able to take losses.

Learn it!

The once you've taken the loss at 1.29 you are no longer encumbered with the stress of the losing position and when to close the hedge. This will affect your decision making. Instead you have a clear mind to think about when is the right time to enter a completely new trade again.

Arguing with you on this one will lead to brick wall with us both standing side by side.

There is technically nothing wrong with your approach however with proper hedging routes + the winning % , capital can be preserved.

One pointer. Price always retouches opens, closes, highs, lows for every bar on the terrain. Always.

One could take a loss right now, or wait for x seconds, x minutes, x days, x weeks, x years, x decades for the opens, closes, highs, lows to retest themselves. With proper hedging and internal controls (variables are huge), chances of capital preservation in trades holds.

And yes the points listed in my previous post are not as simple as 1 to 7 and you are king. There is more to it than that.

Do I use traditional stop loss? Nope. Do I have capital loss cut off? Yes Do I hedge? Yes.

If you are down 5% then you are not hedged properly. If the price does not do what you intended then there is a problem with the strategy. Either way with hedging the losses can be controlled and in worst case just shut down the positions if it is really taking too much time.

As for some gentleman posting about spreads/commissions, well that sector is more concerned with day trading. Its another planet altogether.

Each to his own.

 

[timsk]

One pointer. Price always retouches opens, closes, highs, lows for every bar on the terrain. Always.

One could take a loss right now, or wait for x seconds, x minutes, x days, x weeks, x years, x decades for the opens, closes, highs, lows to retest themselves.

Hi safvan,
I'm not sure what you mean by 'on the terrain' but, apart from that, there's nothing vague or unclear in the part of your post I've quoted. Nonetheless, either I'm missing something or there's something I'm misinterpreting, as you appear to be saying that the OHLC of any bar/candle is always retested sooner or later - it's simply a question of time? Does this apply to any/all tradable markets and timeframes? Like I say, I'm sure I've got the wrong end of the stick and the answer to both questions is an emphatic no!
Tim.

 

[safvan]

Hi safvan,
I'm not sure what you mean by 'on the terrain' but, apart from that, there's nothing vague or unclear in the part of your post I've quoted. Nonetheless, either I'm missing something or there's something I'm misinterpreting, as you appear to be saying that the OHLC of any bar/candle is always retested sooner or later - it's simply a question of time? Does this apply to any/all tradable markets and timeframes? Like I say, I'm sure I've got the wrong end of the stick and the answer to both questions is an emphatic no!
Tim.

You answered it within your own questions.

Discussing what is right and wrong in the markets is like trying to promote our respective religions. Whether we are Jews, Christians, Muslims the Market God is one tough SOB.

Whoever on trade2win is making more money in the end of the month with or without using market condoms for protection is the winner.

Will just leave it at that note.

 

[Splitlink]

About the closure of my Euro/GBP trade, yesterday, for a loss of 17 points. If I had not done that

the trade would, still, be open!

five points short of my stop and with a good possibilty of it going lower. The time wasted and the money tied up in the margin proves, to me, the futility of staying in a trade because of obstinacy, just to get to the 40! It makes no sense and not having a stop, at all, makes less.

I am, still, experimenting, though. This time, witrh a more moderate 20 but it is, still, much more than I am used to.

 

[rawrschach]

If the market goes against you get out. If it looks like its coming back again, get in.

E.g. Buy 1000, sell 960 - 40 point loss. Buy 920 and you need to get back to 960 to make up the loss.

Alternatively Buy 1000, sell 990 - 10 point loss. Buy 920, by 930 you're even, by 960 you're 60 points up.

 

[Splitlink]

If the market goes against you get out. If it looks like its coming back again, get in.

E.g. Buy 1000, sell 960 - 40 point loss. Buy 920 and you need to get back to 960 to make up the loss.

Alternatively Buy 1000, sell 990 - 10 point loss. Buy 920, by 930 you're even, by 960 you're 60 points up.

In other words, you are always in the market. I don't do that. I'm inclined to lick my wounds or count my profit. So I waste time that way. I'll try!

 

[rawrschach]

I guess you could say that. I try to trade in areas where I know v quickly if I'm wrong so I cut, sometimes cut and reverse. Just, if the market looks like it'll take a 40 point swing against you before maybe coming back I'd rather cut after, say, ten then get back in if it looks like turning.

 

[Shakone]

If the market goes against you get out. If it looks like its coming back again, get in.

E.g. Buy 1000, sell 960 - 40 point loss. Buy 920 and you need to get back to 960 to make up the loss.

Alternatively Buy 1000, sell 990 - 10 point loss. Buy 920, by 930 you're even, by 960 you're 60 points up.

Not dissimilar to how I see things. There is a lot of 'one-trade' mentality, thinking that the particular trade is sacred, rather than getting out and taking another shortly after. Like the guy holding his FTSE short from hundreds of points away and adding to the loser. Well if he really insists on being short while it's rising, cut the loser early, and get in at a higher price rather than run the loser all the way. He'd be much better off like you show in your example. If your trade is up but running into resistance, then why not take profit, let it bounce down a bit, then get back in? As long as it bounces more than the spread and you got in again, you've improved your position.

I don't really see this as always in Split, but I think you're spot on regarding the getting out early.

 

[Splitlink]

Not dissimilar to how I see things. There is a lot of 'one-trade' mentality, thinking that the particular trade is sacred, rather than getting out and taking another shortly after. Like the guy holding his FTSE short from hundreds of points away and adding to the loser. Well if he really insists on being short while it's rising, cut the loser early, and get in at a higher price rather than run the loser all the way. He'd be much better off like you show in your example. If your trade is up but running into resistance, then why not take profit, let it bounce down a bit, then get back in? As long as it bounces more than the spread and you got in again, you've improved your position.

I don't really see this as always in Split, but I think you're spot on regarding the getting out early.

I try to face facts, in my position. I am nothing other than a very interested amateur and, in addition, getting on, so not as quick as I used to be.

Getting out of a good trade when it hits a congestion area and, then, trying to get in, is not, always worth the hassle. I do take profis, frequently, but I might not get back in, again, in time and, even then, it might be a reverser that goes against me!

Here's my trade, this morning. I haven't entered since. Still waiting for a clue but the 2 hour chart is very bearish so that is my inclination. If I had reversed after closing I would be very conscious that it was against the main trend. In hindsight it is easy but, at the time?

 

[Lickyluciano]

You answered it within your own questions.

Discussing what is right and wrong in the markets is like trying to promote our respective religions. Whether we are Jews, Christians, Muslims the Market God is one tough SOB.

Whoever on trade2win is making more money in the end of the month with or without using market condoms for protection is the winner.

Will just leave it at that note.

Not even close to being true. If you think you are trading without a stop you are delusional. Everyone has as stop. Sooner or later it will be either a financial stop or a time stop that will make you cry "UNCLE!"

You could make money for months and years and look like a winner until you suffer large drawdowns than necessary and you will change your mind on stops then.

Everyone experiences drawdowns. Just a question of how devastating they are.

 

[Fibo618]

Stop Loss IS the big difference. Immediate small Loss or eventual huge loss. that's the question.

I personally compensate the lack of SL with a virtual hedging SL (i.e. opening a position in opposite direction that I eventually hope to close and recover).

Cheers
David

 

[safvan]

Not even close to being true. If you think you are trading without a stop you are delusional. Everyone has as stop. Sooner or later it will be either a financial stop or a time stop that will make you cry "UNCLE!"

You could make money for months and years and look like a winner until you suffer large drawdowns than necessary and you will change your mind on stops then.

Everyone experiences drawdowns. Just a question of how devastating they are.

"Ah I have shown my Uncle what the truth is!"

Make you happy now?

 

[Aesop20]

i don't think i'd enter a trade without a stop, the most i'd do is go against my strategy and perhaps lower it a few more pips to allow some room... usually if i'm getting near my TP i'll even bring my SL up to the Break Even.

 

[Lickyluciano]

Stop Loss IS the big difference. Immediate small Loss or eventual huge loss. that's the question.

I personally compensate the lack of SL with a virtual hedging SL (i.e. opening a position in opposite direction that I eventually hope to close and recover).

Cheers
David

A hedge keeps your capital tied up indefinitely so you still are losing.

 

[bigmistake]

Jeff, I would like to see you are a good trader when you trade for years without SL.

One of the first lesson I study in trading is always set SL for my order. We cannot predict 100% Forex's movements so set a SL would make us prevent the high lossing.

I don't want to see the market drop down and it burns my budget so I always set SL per trade.