Well, considering this is investors money you deal with, one would assume you wouldn't take the extra risk assuming you would be right. On that note, I think that was a emotional mistake.

If I were your investor, I would care more about your results and hope you can do what you set out to be... 'Manage Money'. This seemed to be a case of some mismanagement. I would like to know that you take every precaution to preserve capital first and profit from it as a result. Don't over invest just to make a better ROI...just keep to your system of trading.

As for everyones theory of stop-losses and the fact that they think you wait out trades till their profitable...by all means, I would not care, just as long as it works for you for a stable amount of time. Also, High Water mark rule applies so you would be getting no performance fee until recovery...so its whatever.

Everyone is entitled to their own system...and are allowed to do whatever they want to profit.
...if you dont like the system, then just dont invest in it.

robw135 posted:
    One last comment from me.

Patience.
That was an exception indeed and everyone involved in that account agreed. Dow Ind. and everything else does not fall 900 point in 10 minutes exactly every month.


If you think like this you're not real trader. A real trader is ALLWAYS prepared for the unexpected. It doesn't take much time for a disaster to happen in the forex markets.

I agree with Zebra and Fomacc, Black swans DO HAPPEN. And exposing oneself to that RISK by having no SL is unnecessary and dangerous to the capital.

BUT, each to his own I guess. I just wanted to shed light on my opinion about using no SL.

everyone has to experience the pain, at least once :)

Physical stop losses are there for physical protection of your capital. What is most important is the mental stop loss i.e. the price area at which your original reasoning for the trade entry proves invalid (This price then forms the basis of your risk calculation. You then have to manage the cumulative risk to one event occurring too and realize what max equity is exposed at any one time). As a trader you need the discipline to accept when you are wrong and take a loss - that is something I think you need to realize as it is impossible to obtain a win % you were obtaining without taking unnecessary risks i.e. not accepting losses.

For example your average pip win is 21 ish pips or so and yet you've just had losses of 340 pips on EJ and 240 on UJ and still have only 50% equity...you were playing the trends and then the trend changed...it should have taken a much higher price than 340 from your entry on EJ to realize that your reasoning for entry was wrong and we are seeing change in the short term tend...Equity markets gave a lot of clues that a sell-off was coming IMO...but in any case it goes back to having the mental discipline to be able to realize when you are wrong and accepting it...I cant believe that you r reasoning for your entry was not invalidated long before 340 pips draw-down especially as you are shooting for small pips each trade.

IMO this is the biggest glaring issue....don't be scared to be wrong, losses are a cost of this business and you need to be able to accept them. It should not take a 340 pip drop for you to realize you were wrong if you are shooting for 20 odd pips per trade. You also need to have catastrophe risk controls...i.e. total equity acceptable draw-down, total balance draw-down before you stop trading...these don't stop big winners these provide capital protection and stop margin calls.

The move on Dow yesterday was not a black swan event, it did not occur in a few minutes it was a market sell-off in risk which was long over due and the warning signs were there following NFP.

A margin call is a very serious event to happen and I would strongly urge you to consider it as such...it's the worse thing that can happen to a trader and especially a trader managing other people's money. If you think it was just because you were over leveraged or because of the market sell-off then I would urge you to re-look at this...as the real issue IMO is the fact that it takes over 300pips fall in EJ, and the drop in UJ before you even begin to realize you got the trade wrong...that is the biggest point I see from the margin call you need to be able to accept a lower win rate and realize when you are wrong. You win rate was too high so it was pretty obvious that you were holding trades too long i.e. losing trades...this works find when you are in a strong trend and trading in the direction of the trend but as soon as we get a drop / change you'll suffer unnecessarily large losses.

As I said physical stop losses are not the issue it's the mental ones that are and having the discipline to accept when wrong or knowing at what price to cut a trade and lastly having some basic capital protection in place to stop a catastrophe event like a margin call occurring. I would strongly urge you to look into this in a lot more detail as this is not the first time it has happened and it will keep occurring until you change this approach IMO.

I'm just trying to help a fellow trader from my observations and experience.