Hello there!!
Just passing thro while on holidays.
I will be back formally in February next year.
[B]I see that there are a lot of newbies here since I completed my work on this forum in November!! [/B]
It is for this reason that I quickly post this thread, because I have seen new posters on this forum bragging that they can trade successfully without the use of a stop loss.
[B]I am severely limited for time here, and I have no chances to reply just now.[/B]
[B]I will deal with this subject properly when I return in February.[/B]
[B]Just a warning to all newbies[/B]
[U]To trade without a stop loss is to be an idiot.[/U] :mad:
You are courting financial disaster.
You must have a trading planā¦and then you trade your plan.
It should include a stop loss - therefore a 2% risk rule.
That is, with a stop loss you only risk at most 2% of your equity account.
You can then correctly calculate the number of lots to risk on a trade.
Then you have a risk/reward ratio and a win/loss ratio.
The people who trade without a stop loss are risking 100% of their account on a single trade.
[B]But if the trade goes against you, it will come back to you!![/B]
Yeah!!..sure!!
How do you know???!!
What?!!
A drawdown of -$10,000 to win just $200.
Can you stomach that?
You have got to be kidding!!
What about the time wasting while you wait for the trade to return to you?
Could that not be better spent making further profits on other trades??!!
When you wait with huge drawdowns in the hope of a trade coming back to you, you are really operating at a loss (time wasting).
OK, so you do 5 years successful without a stop loss (highly unlikely).
You have built up a bank account.
Then after 5 years, suddenly things change and your trades do not return to you.
You hit a margin call and use up all of your equity.
In just one or more trades, you lose everything - 5 years work down the drain.
5 years of your life wasted.
Go to the casino - watch someone win for 8 hours, only to lose it all in 2 last bets!!
It happens all the time.
Learn from the Babypips school !!
I am a retired school teacher - [U]and I know about schools and teaching!!![/U]
[B]Learn grade 13 well - it should be written on your heart!![/B]
[U]Finally, read the following hyperlink to this thread from this forum.[/U]
Answered by all the FX Honorary Members on this forum.
See what we have to say in unisonā¦
http://forums.babypips.com/forextown/11812-no-need-stop-losses.html