Stop Loss

I think setting a stop loss has to do also with which broker you are using as some of them have restrictions on how wide a sl can be

You do realise this is a 9 year old thread?

LOL, lazarus threads are a great fun to read up onā€¦wonder how the OP did sans the SLā€¦

9 years or 90 years, stop loss has the same importance. We can discuss this issue over and over again because this is something that had greatly changed my trading results once I started using proper stop loss in all of my trades.

True 'Datā€¦I guess the analogy to use here is like speeding up to sixty miles and over, taking sharp curves without brakesā€¦it makes sense to use SL and given what happened with the SFranc, it is one way to protect your account from sudden unexpected freefallā€¦

Hi, chill out, I was only smiling at how seemingly dead threads get resurrected on here :slight_smile:

Out if interest, what were you using prior to ā€˜proper stop lossā€™?
Did you change anything else in your trading at this time that may have caused this improvement?
Does your myfxbook verify this, it might be useful for others to see actual positive results as a means of encouragement.

I always use a Stop Loss. IĀ“ve been doing it for the last 7 years trading and it is one of the most important aspects of my trading.

I would recommend Metatrader to backtest.

good luck!

What platform are you using? I am currently using mt4 with my broker and there are multiple ways I can place a stop loss. Just to add to this I always use a stop loss. If you are suing the mt4 platform then you can place a stop loss by selecting a price in the stop loss box when oepning an order, or if you right click on your open order you can select to modify it and add a stop loss. For backtesting I use the mt4 also. It is a simple platform with many capabilities and functionalities.

True, MT 4 sure makes for some easy tradingā€¦compared to the other variantsā€¦

Personally, I donā€™t use Stop Loss anymore. Itā€™s a way to lose money if you have small funding. Stop loss is suitable for big players who have millions of dollars in their account. They can put wider stop loss that canā€™t easily hit by market ups and downs. Their trades can breath and withstand marketā€™s unpredictability.

In my case, I use my defined algo to manage my losses and turn into winners. This makes me consistently profitable then. I donā€™t worry if the market direction turns against my trade because thereā€™s an algo that could handle efficiently 100% of the time as long as the market moves.

What is this Algorithm something you coded?

I never use SL, instead I put averages up/down. I am 99% sure that the TPs an SLs are visible to brokers. It happened wayyyy to many times that my TP wasnā€™t filed by just 1-2 pips ā€¦ for the same reason I suspect they can see orders and hunt them (Stop hunts)

I thought the same at one point, even on a practice account, so I investigated and the difference I was seeing was the spread, and my graph was showing the other end of the spread to what I needed, but ofcourse when you hit a stop loss, it looks to be premature for the same reason.

For me there are a couple of times that my reading of the chart etc. has been right, my take on what is going to happen pans out, but before it does, I get stopped out. So next time I increase my stop, and you gues ed it, Iā€™m wrong I loose bigger than I should have. I think sizing the stop loss is a definite art and one I have yet to master.

I totally understand what you are referring to. When I started trading with ironfx I felt like my take profits werenā€™t getting hit whereas my stop losses were. I spoke with them and they explained why this was happening. Basically what they told me was that a buy position closes on the bid price and a sell position on the ask price. As a result if you have a sell position take profit then you must wait for the ask price to hit your take profit and not the bid price. Once they explained it to me and I checked they were right. I personally always use a stop loss and take profit.

That what I said, but put into english :slight_smile:

Yes, I have coded this algorithm to work automatically and not babysitting my trades.

What do you mean 100% of the time? It is successful 100% of the time? Also, how long has this Algo been running, Iā€™m curious?

Personally, stop losses has nothing to do with small or big funds, it has to do with my own strategy and how precise it is. I use it 100% of the time to great effect.

Do you have a myfxbook to back this up?

Not using Stop losses is possible but the risk is not limited.

The popular scenarios are:
A) if you are using a huge account with small positions (every trade is less than 0.01% of your capital) than i understand your ability to survive when the market moves against you, you could even average losing positions (not a good habit) and cash in your profits during the counter move. BUT letā€™s say you went long on a pair/index at the year high and that was the last time you saw that price for the next x years; even if you keep averaging your losing position with small baby volumes (0.01% of your capital per trade) there has to come a time where you say: ok, lets cut and loose, (and your loss will still be limited assuming your exposure is so minimal).

B)Hedging on the same pair at the same price at the same time. Which may work a while, whatever direction the market goes, you eventually lock in the profits at a major Support/Resistance level and then exit during or after the correction/pullback/rebound (to minimize your loss or eliminate it in case it goes back to break even). Even though you eliminated the risk of your stop being hit, that same risk exists again once you wait for the correction, you need to have an opinion on the market, hence heding is useless. The risks here are: you pay two spreads, you have to eventually take one side of the market. it needs a lot of focus and dedication. It would be wiser to hedge two different pairs with different RS (example GBP/$ and GBP/Yen)

C) non margin trading/investing, and i m talking here about fundamental hedge funds who buy and hold for a long period of time. this is totally different to Forex.

I m still curious to know your algorithm and does any of the 3 scenarios apply on your system?

Amro

why donā€™t you give us an outline here, with some trading proofs? Is it because really you are doing nothing more than either harvesting email lists, or peddling some form CPA offer, which people have to go through before they get to the video which will probably take 20mins to watch and could be summarized in 4 words ā€œBuy Low - Sell Highā€, by all means call me cynical, but if you were really giving away a free video youā€™d put it on youtube.