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Stop Loss?? I Don't Want To Use It.


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41 replies to this topic

#1
Abdulla1

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Last week I was reviewing a website which has a trading signal program for those investors who prefer to not being involved in confusing market analysis and I respect them because such services normally will bring them more time to do other important things in their daily life. But the interesting thing was the most of signalers did not actually place a stop loss point on their recommendations. Is that so because they know they are right all the time? Or that's because they did not lose half of their trading account in an unexpected slump of 200 hundred points and a single trade.

However, the answer is most of them have something between -1000 to -5000 pips of open trades on their signal board and they actually trapped in desperately while they could cut the losing trades and ran another one instead. Also I should mention that there are some other types of system trading that called "Hedge Fund" and I don't actually want to argue if they are right or wrong. I am definitely talking to day traders who get into challenge with big bear every day.

Sometimes, I don't understand why a trader could be convinced of not having a Stop Loss while we see almost every month an unexpected uncounted impulse (I would call it Best of the Test for whom with less of the rest) in the market.

There is no specific rule as to where you should place the stop loss, so consider the below mentioned tips as the general rules and ask your mentor to fit reliable Stop loss rules just for you and your trading system(If you have one?).

* Many loser traders do place the same stop loss for all the trades they execute without even trying to measure market environment.
* Don't be scared of placing a stop loss while it is for your gain and you must know what your profit objective is.
* Stop Loss should not be too close to the current price while most of the stop loss enemies have ruined their trading accounts already just by using very close ones.
* Stop Loss should not be too far from the point you get into trade while it's better to not placing any Stop Loss rather taking an unreachable, fictional protector.
* Try to not to risk more than the points of your profit goal. Pro traders recommend to only take those trades which have at least 2 points of potential profit per 1 pip of potential lose, but I would say it is completely depends on the money management system that you use, as different money management systems has different recommendations for Risk & Reward.
* Sometimes a trading system does not work if you risk less than recommended %7 to %10 of your total account balance. It means you trade oversize or you just entered the market when everyone else getting out of the market. In this case this is not your fault as it has a clear message for you "don't trade this way anymore and ask an expert to solve the problem".
* If you are convinced enough that you can make up 1 million dollar out of your 10000 dollars account by not using stop losses as you may think you are the one who knows the price will be back on its way to you instead of hitting new highs, well, simply you are wrong.
* Remember, there are no sky limits for the price of any of currencies in FOREX market.
* If you don't like to place a pre defined Stop Loss on your trades, please ask someone to show you how to follow a wining trade by using "Trailing Stop".
* Be sure it is better to have one or two losing trades with 100 points of lose, instead of being desperate with sinking into -1000 pips of dizziness.

How to Define the Best Stop Loss point?

Try these tools to define the most accurate stop loss points easily:

* Use 10 pips over/below the first Parabolic SAR spot(dot) appeared over/below the price candles for Short/Long Trades.
Note#1: Remember you just can use 10 pips above the parabolic SAR dots as an Stop Loss point when you have a Short trade and Vice Versa.
Note#2: You realized that the Stop Loss obtained from SAR is too far from the point which you want to enter the market. OK, this means you are about to enter the market very late so better to not do it.
* Use 10 pips over/below the day before yesterday's HIGH and LOW and in the case of the market has moved a lot far, use 10 pips over/below the yesterday HIGH and LOW as a Stop Loss point for your Short/Long trades.
* Use two Moving Averages of 55 EMA and 144 MA. You may place your stop loss just 10 pips below/above one of those two MAs depending on how do you set up the profit/loss game for your Long/Short trades.
Note#: If you trade on the range market break out be aware of this kind of Stop Loss setting, and it is quite safer to use another way.
* Place the Stop Loss 10 pips over/below Bollinger Bands Upper/Lower band for Short/Long trades.
* If you use Elliot Waves theory to analyze the market:
# Place the Stop Loss just 10 pips below the lowest point of the Second (2) wave in bullish trend when you LONG on Wave 3.
# places the Stop Loss 10 pips below the lowest point of the 4th Wave when you go for LONG on 5th Wave.
# Place the Stop Loss right above/below the top/low of the previous wave when you go for SHORT/LONG based on A-B-C correctional waves.

Notes:

* Aforementioned suggestions are based on 4Hours chart.
* Those ways of defining Stop Loss points has worked for me, but It does not necessarily works for you, so ask your mentor or an expert friend to do evaluate the probability of fitting those suggestions to your trading strategy.
* 10 pips are because sometimes price hit the important support or resistance levels by more than a touch.
* Please don't forget, the Stop Loss issue is not actually a game. It is not even an option for you; it is a "MUST" and will save you when you can do nothing, so refresh your mind in this case.
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#2
arhabib

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As stop loss is good technique to avoid loss. But you have to give take profite very low and also have to set
stop loss very high.
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#3
euro

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I always use sl in all of my trades to prevent total wipe out. Its very smart to use it and very foolish to not use it if you have a high risk high capital trade. We need to protect our trades so use it at all cost. You can put in pips around 10-30 in order to protect your trades. Leave it wide enough so you're not taking out right away but do pay attention to your trade at all time. 


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#4
Thayungsta

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since stop loss i a special technique what makes it a popular source
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#5
euro

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You need it in long term trading but not necessarily in scalping since you are watching the trade and can exit at any time but just in case you need to step away you can have some protection. In some cases while trading you might need to step away to do some eating or drinking or bathroom breaks. I guess it happened to me all the time. I get thirsty or need a break from trading or the screen. Sometimes it take too long for the trade to be profitable so we need some break. 


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#6
Bagus

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stop loss for me is one part of trade facilitation and the use of stop loss that we will be able to make much more leverage in the trade and will be able to reduce the risk in the trade

 

 

since stop loss i a special technique what makes it a popular source


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#7
budado

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If you don't like to use Stop loss then don't use stop loss. I do know we all be making one big income in here one after another and I'm so sure that we all are in here to earn good amount of money. I'm so focus now on doing something good out of myself in here and I'm so sure that in two to three years time I can really have bigger income if I know how to do averaging and hedging. This strategy has no SL.


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#8
standart

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point out good stop loss level doesn't easy. require experience and market understanding. common level to place stop loss is previous support and resistance level. if we are know the basic principle of 123 pattern, we will know in which level we should set stop loss. 


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#9
surya77

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stop loss is a tools for you to minimalize risk have, with stop loss we can keep our profit have and minimalize a loss.  so I hope for any trader/investor for use it to help you trading activity.


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#10
myregister

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You should use it dude, and trust me you will thankful for it, with SL you don't have to monitoring the position over and over again. You just can open a position, set Stop Loss and then close the platform, everything saved in your broker account and you can wait it to touch TP or your SL.


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#11
eaglehyipmonitor.com

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my experience it very high on stop loss and take profit.some time market goes against your order very fastly.so you have no time to close the order then you will loss your all money.thats why stop list is most important thing in forex


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#12
myregister

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Why not? This an useful feature that you may never got in the other place, beside you can reap more profit with it and reduce the risk well especially if you combined it with Take Profit, also this tools has been used by a lot of forex trader.


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#13
sidejob

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Wow it is quite surprising to me that you don't want to use SL, it makes your trading more easier because it is more automatic so you don't have to re-check and close by yourself. I think that is unwise for not using stop loss, make sure you use it always to help you a lot and trust me this one will work well.


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#14
myregister

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Wow it is quite surprising to me that you don't want to use SL, it makes your trading more easier because it is more automatic so you don't have to re-check and close by yourself. I think that is unwise for not using stop loss, make sure you use it always to help you a lot and trust me this one will work well.

think that is very surprising from somebody, to be honest SL make my day easier rather than when i must keep watching all the day just for closing my position, also with SL i already calculated of the risk so when i am losing i could keep my temper because i already predicted it.


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#15
sidejob

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That is why i said that one is very surprising, i same like you SL make my day easier rather than before, watching for whole day just not my type. I am sure that all traders who use SL and TP must be calculated the profit at most 5 percents or 7 percents of their total whole capital.


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#16
myregister

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That is why i said that one is very surprising, i same like you SL make my day easier rather than before, watching for whole day just not my type. I am sure that all traders who use SL and TP must be calculated the profit at most 5 percents or 7 percents of their total whole capital.

Truly very surprising, SL is the best tools but it is depend on the trader to use it. SL also useful if you don't want to trade for longer time you don't have to cut loss your position. SL make traders earn better without need to spend much time in front of computer.


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#17
sidejob

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So do i, i also find it is surprising that there is someone who does not want to use, i know it is not always accurate especially when liquidity is low. I ever see my position touched but it seems that there are not enough money maybe on the market and the position cannot be executed.
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#18
myregister

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I just want to say that if a trader don't want to use SL that is their biggest loss, this feature made for us to make our trading easier rather than before and reducing risk at the same time. Some traders prefer this way like me because it is less stress because we already accounted the risk into our account.


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#19
sidejob

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Actually depend on the way they trade, scalpers maybe the one who don't or at least reclutant to use stop loss compared to someone who prefer long term or mid term trading. Since this is not something which has defenition i think it is up to the trader who use their own strategy.


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#20
myregister

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I think you are right my friend, scalpers better does not use stop loss and it is better just to cut loss manually, overseeing the market is one of the best thing that scalpers can do but aside from scalpers i think stop loss is a should things to set since will help us a lot later to manage the risk.


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