Hi Bijoy, i absolutely agree with you. I’m really looking forward to that post 
you might have a point TP. tho i didnot look back and made a statistical approach or anything, i can say there were times when my stop hit at b/e and market turned back and went in my direction. a do know a few decent traders who put your idea into practice, and even improvised it by NOT USING STOPS. i gotta say if i had like 100k to spare for trading, i wouldnt you stoploss and i assure you i woulnt lost a penny on forex market. unlike stock market forex has its limitations. if you but euro now blindly, and market crashes, how far do you thing it might go…? 1.200?? 1.000…?! forex has boundries and there guys out there that are taking advantage of it. but for smaller retail traders like me thats not an option. so i care about 2 things when i trade:
- protecting capital
- minimum stress
I use fibo levels for a reason. if my first level reached after my entry, and went back hit my sl, and go up again to same target, on larger time frame it would look like indecision thus my analysis would lose its validity. All and all you dont make rules unless you are gonna stick to them)))
Bijoy, as far as im concerned, im in love with your system, and i cant thing of 2 things that i would change about it (i have only one lol). But i dont look at it like you do thats why you are trading that way and im not. So im also looking forward whatever you have to say about those trades you took. and sorry for long posts. its kinda thing with me i guess gotta write down my mind before i forget what it was.
In my view, protecting capital should be the main aim of a trader. Because, capital is your base. It acts as a court for your game. If you loose your base and get out of the court, then it will be very difficult for a common man to get back into the court to play the game again. Not loosing is always a win against loosing.
Proper review, reconciliation and self analysis of activities ( here it is trading) helps to find out the bottlenecks and inspires to define corrective courses. This will be a step to learn something from our mistakes.
I agree with what you both say 100% about protecting capital, but protecting capital and protecting from individual trade losses are not the same thing. Your SL on a trade protects your capital together with your trade sizing and your ROI expectation. A loss shouldnt be uncontrolled ever!!!, thats where problems begin, but…if you are taking smaller gains or BE on individual trades it will make your individual winning trade stats look better but will the end profit measured in $$$ be better ??? This is what we are concerned with.
Protect your losses = no uncontrolled losses…they should be pre defined by your SL
offtopic: i cant believe i missed THIS tho there is a chance that price will retrace back below trend line and give a good opportunity to short the bastard:
back to your argument, whatever suits you better, mate. personally if i have 30pips stop, i take profit at 30pips, and trail stop to b/e and let the market decide. love it cuz i make money no matter what happens. Like shorting eurusd with stop just aboe the high lol)
Exactly… u r in the right way.
But, when I say, “protecting capital”…that doesn’t mean to place stop loss, take BE trades etc are the main steps for protecting capital… Those are very minor topics in this wide subject. Here I would like to share some reasons to loose money.
This is a brief look and assumptions to protect your forex assets.
- Thinking profit in dollars and not in percentage
Most currency traders start out looking for a way to get out of debt, or to make easy money. It is common for forex marketing to encourage you to trade large lot sizes and trade highly leveraged to generate large returns on a small amount of initial capital. You must have some money to make some money. It’s possible for you to generate outstanding returns on limited capital in the short term. However, with only a small amount of capital and outsized risk, you will find yourself being emotional with each swing of the market and jumping in and out and the worst times possible.
Solution:
People that are beginners in forex trading should never think of returns in terms of amount. Returns and risk should be calculated in terms of percentages. Then your trading effort put into trading $100 will become the same effort put into trading $10,000. You may calculate your required income per month in pre-defined percentages and the capital may be fixed accordingly.
- Failure to manage risk
Risk management is key to survival. You can be a very skilled trader and still be wiped out by poor risk management. Your number one job is not to make a profit, but rather to protect what you have. As your capital gets depleted, your ability to make a profit is lost.
Solution:
Use stops, and move them once you have a reasonable profit. Use lot sizes that are reasonable compared to your account capital. Most of all, if a trade no longer makes sense, get out of it.
- Greed
Some traders feel that they need to squeeze every last pip out of a move. There is money to be made in the forex markets every day. Trying to grab every last pip before a currency pair turns can set you up to lose the profitable trade that you are sitting on.
Solution:
It seems obvious but, don’t be greedy. It’s ok to shoot for a reasonable profit, but are plenty of pips to go around. Currencies move every day, there is no need to get that last pip. The next opportunity is just around the corner.
Hope above is of some sense ?
Friends,
Now actually, I am bit confused of moving stop Loss to BE. Anyhow I decided to stay with my plan and hence the stop loss of my Trade 12 (Long CAD/JPY from post # 141) is moved to BE as the trade is already up by 40 pips.
BIJOY
may i ask what lot size you use…?! actually as you said earlier it doesnt matter. if you risk 2% per trade, add another 1% as a separate trade and as soon as you move sl to b/e close that 1%. just a suggestion.
My lot size is not fixed. It varies bases on the risk percentage, current account balance and stop loss in pips.
I use babypips Position Size Calculator: Free Online Forex Position Sizing Calculator to decide my lot size for each trade.
It is always changing and is compounded.
The point you have noted was under my observation for long time. Not only from the daily chart, the downward trend line drawn from the monthly/weekly charts is also matching with the point of Intersection.
See…
Only thing, we require some reversal candles to confirm the reversal. The possibility of a break out also cannot be avoided. Close of a strong bearish candle below 103.80 can trigger a downward movement as shown in the 4 Hour chart below.
All the Best.
My CAD/JPY trade is still open. Due to some office works, I am going offline for next 12 hours.
See you after some time.
Friends,
Due to some office works, I am going out for some time and will not be able to monitor my trade for the next 12 hours. So I am shifting the stop Loss of my trade 12 (Long on CAD/JPY from post # 141 & 168) to 80.34 locking +45 pips as below.
BIJOY
ty mate. have a good day.
Friends,
My 12th trade (Long CAD/JPY from post # 141,168 & 173) for the month closed by hitting moved stop loss.
This trade gained me 45 pips and an increase of account balance by 3.8 percentage. Now my balance is increased to $3828.60 from $3713.33
I will be back with new trades shortly.
BIJOY
Dear friends,
I am back with my new trade.
This time I am going long on Fiber.
See 4 Hour Chart of EUR/USD
Here I am seeing some bullish candles just above the rising trend line with a stochastic that is about to have a cross over.
Here we go:
Entry: 1.2989, SL: 1.2929, TP: 1.3109, Risk: 3.2%, RR: 1:2
Also I will allow a 60 pip trailing stop with the trade.
Guys…, Wish me Luck…
BIJOY
Good mng Bijoy,
Good to see u back in action.
Good luck on the trade.
DD
good luck bijoy
Hey bijoy, sorry for the euro trade. but there is another opportunity coming. check this out. CLICK:
basically what im looking for is a decent bounc off 1.29 area IF we get there. ill look for a buy not sure about stops tho 1.28 is a fairly safe stop but its too big too, so gotta watch lower tf.