Trading without Stoploss, can send you packing

stevetrade posted:
    I don't see a problem with putting a stick in the ground on the system.

the problem is called death of one thousand losses, or noticing that most of your winning trades just put you BE from those stupid ones that turned after you were stopped out
especially if you compound, as compounding creates asymmetry

It's simple don't have one thousand losses.
If your live trading bears no correlation with what your paper trading results told you was likely to happen then review your strategy.

ah ok you're a mechanical trader, that explains it
SL's make probably more sense in mechanical trading

I'm neither advocating stops or not but people need to realise that every account has a stoploss be it order, emotional or margin

If a trader doesn't have a strict set of rules for trading (some might moniker him as mech trader indeed) it is only a matter of time until he hits a rocky bottom.

ForexScan posted:
    I learnd from a pro how to trade without stop loss, I have to say yes u can be sucessfull trader trading without stop loss with good money managment allready its been mentioned in prevouse postes how to do that. If u still want to take more risk then learn to do hedging if your initial trade is wrong your hedging trade will make money wait till market turn around and close your hedging with profit and now u will start making money with your initial trade now your overall profit will be the gap between the hedging trade and initial trade close u can close the initial trade with negative and still make profit.

If u prefer hedging make sure to do when u have over 50% equity dont wait till last minuite. I know if brokers read this thread they will not like traders trading without stop loss I am taking my time to write this becouse I lost lot of my money for the stoploss I know how it feels when u keep on losing money.

Don't mistaken yourself: brokers (as you are probably refer to bucket shops) love people who don't use stop loss, as they burn their equities much sooner than stop loss traders, and are very much likely to key in with shaky hands their credit card numbers to send the rest of their savings into account facing margin call. Surely, it will burn as well. For broker it is a matter of statistics. So it should be for a trader. Who care if market turns around after hitting your stop? First you should not care about it, done trade is done trade, in profit or loss, but what you can learn from it is that do not place your stops where it is likely to get hit, in an obvious zone, in a congestion of orders, etc. And manage your position size accordingly. Any bank trader has a stop loss, it doesn't have to sit as a limit order in system but it exists. If he crosses max draw down, Treasurer will get him fired in no time.

I am a manual trader and I always use stops, not so much to protect me against adverse price moves, but as part of my money management and lot-size calculation.

My stop is based on nearest support/resistance plus a buffer equal to ATR/6. I then calculate pips between stop and current price, then convert to dollars. I apply 2% to my account balance, then divide this value by the dollar value of pips between current price and stop to calculate lot-size. Whether I trade 1 lot or twenty lots, I know that if my stop is hit I cannot exceed 2% of my account balance. And if my stop IS hit, then price has pushed beyond support/resistance plus the buffer, which is the point where I would normally exit manually. Allowing the stop to trail will lock-in breakeven and accrued profits as the trade progresses...let's profits run!

Hello people,

Thanks for a great post. I am a relative new trader but have modelled my trading on a very sucessful moderator and good friend (part of an educational forum I am a member of). I generally do not trade with mechanical stops, and generally do reasonable well. Note however that does not mean I do not have a definitive exit strategy. Even though I primarily scalp and am willing to let my positions run, I will hold a trade if I believe the initial premise of why I entered the trade holds true (and coincides with the market longer term tend). I also do monitor my positions.

Note however I do now place what I call catastrophic stops in place - having left a trade open and been distracted to return and find a big hole in my account. So if I ever leave a position I do place stops, though my general position size is so small as to have a minimal impact.

Just my two bobs worth - happy pipping 😁 and thanks for all the valuable experience.

I had no mentor but I got it quickly that stops are a must and conditioned myself accordingly. I never have soft stops. always whenever I open trade I have stop in place.
as I pointed before some guys make huge returns during range markets when price does come back as they do not take losses and have no hard stops. as a result psychologically they are not conditioned to cut losses and tend to grow fat tails once markets break out of range and they make mistake.
The funniest part these guys appear again and again with new accounts and try to make this trading without stop work yet again. But probabilities are against them.

WorldTrader posted:
     seen a lot of traders trading without stoploss, reason they always say is that they fear the market me hit there stoploss and reverse, as for me, i dont trade without stoploss, cos this is how i manage my money, is very helpfull when it comes to niddles that turns against u. Do u use stoploss or not , and please what are ur reasons?

Hi WorldTrader,
I always use a stop loss, sometimes I use a hidden one to make things harder to brokers.
Yes some very good brokers like to hunt stoploss.
But much more important than stoploss is a System Stop.
Sometimes a system do not work anymore in the present market.
If you don use stoploss say goodbye to your account, but if you use stoploss and System Stop you can save your account.
You must have a plan to use your System Stop before you start any system.
Itś a kind of ' Die Another Day'.
If you look at my Tradingboy Lab you will see what I am telling you.
You will see when I had to use System Stop.
Die Another Day.

Tradingboy