How not to use Stop Loss Orders

[Trendswithbenefits]

Ok… Hope I’ve got your attention… This thread is only for those that would like to think outside the box for a moment and trial other forms of Risk Mitigation that can be applied in these markets…Other than laying down a Stop Loss each and every time you open a position…

I have only applied these concepts to the same latest NASDAQ 1 Hour chart… No chart, timeframe cherry picking… If you want to trial any of these on other trading instruments you may need to alter the Periods and Levels… As all Instruments have different price behaviour and volatility…

Once you have reset and applied the concept to your traded instrument… Always do a look back over say 2-3 months to ensure the strategy applied is giving the clearest and best results…

NASDAQ 1 Hour TF - RSI-X Concept (Above)

We are using the RSI or Relative Strength Index for price strength/weakness rather than the overbought/oversold indicator it was originally designed as… We have shortened up the periods from the standard 14 to a 5 period and the 70/30 levels have been increased to 80/20 to display the strengths of price action…

At a simple glance you can see what is happening on the NASDAQ… Is price strong, is price weak… Is it about to change direction… This concept can be easily traded on the 1 hour timeframe…

No stop required… At the change of signal you can close out your position or stay in the market…

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NASDAQ 1 Hour TF - SSL Chanel Concept (Above)

Above we are using the SSL or Semaphore Signal Level which combines moving averages to provide you with a clear visual signal of price … It’s set to a Period of 21 so as to smooth volatility on the 1 hour charts… It also uses the rarely used Triangular Moving Average… This MA is good for imitating some of the markets algorithm’s… It is very good at filtering out market noise unlike many other moving averages…

Once again a simple glance and you can see what is happening on the NASDAQ… Is price strong, is price weak… Is it about to change direction… This concept can be easily traded on the 1 hour timeframe…

No stop required… At the change of signal or price moving inside the channel (Price is ranging) you can close out your position or stay in the market…

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NASDAQ 1 Hour TF - Colourised Moving Average (Above)

Here we are using a Colourised Moving Average (XLV4) which displays a rising or falling moving average in colour… Green is uptrend and red is a downtrend once again to provide you with a clear visual signal of price … It’s set to a Period of 20 so as to smooth volatility on the 1 hour charts… It uses the Wilder Smoothing Moving Average… This MA is also good for filtering out market noise unlike many other moving averages…

Once again a simple glance and you can see what is happening on the NASDAQ… Is price strong, is price weak… Is it about to change direction… This concept can be easily traded on the 1 hour timeframe…

No stop required… At the change of signal you can close out your position or stay in the market…

Will this guarantee that I never lose another trade…?

No… Price movement in these markets is insidious… Prices spike up before plunging downward… Price shoots down just before it skyrockets in the other direction… These strategies are for protecting you in the markets… They are designed to limit your losses while maximising your gains…

Trial them… Demo them… You will be pleasantly surprised how less stressed you’ll be when you can see the bigger picture of the market you are trading…

I will trial one of these strategies live next week if I get the chance…

[Trendswithbenefits]

Live call 20 hours in and these simple strategies have garnished ~450 pips + on the NASDAQ…

Not a Stop Loss or Take Profit with any of these concepts… Price sets your targets…

I’ll updated every 20-24 hours for the next 7 days…

[Trendswithbenefits]

Live call 48 hours in and these simple strategies have garnished ~750 pips + on the NASDAQ…

Using only 0.5 Lot positions we have already profited over $600 in just 48 hours…

Not a Stop Loss or Take Profit with any of these concepts… Price sets your targets…

I’ll update every 20-24 hours for the next 6 days……

[Trendswithbenefits]

Live call 72 hours in and these simple strategies have garnished ~1000 pips + on the NASDAQ…

Using only 0.5 Lot positions we have already profited over $780 in just 72 hours…

Not a Stop Loss or Take Profit with any of these concepts… Price sets your targets…

I’ll update every 20-24 hours for the next 5 days……

[Trendswithbenefits]

Live call 96 hours in and these simple strategies have garnished ~1650 pips + on the NASDAQ…

Using only 0.5 Lot positions we have already profited over $1300 in just 96 hours…

Not a Stop Loss or Take Profit with any of these concepts… Price sets your targets…

I’ll update every 20-24 hours for the next 3 days……

[MattyMoney]

Good stuff, @Trendswithbenefits , doesn’t get much simpler than this.

Seems the RSI strategy generates fewer signals, but quite possibly better ones, allowing you to stay in the trade longer, which is ideal during a trend.

[Trendswithbenefits]

Live call 120 hours in and these simple strategies have garnished ~1300 pips + on the NASDAQ…

Using only 0.5 Lot positions we have already profited over $1050 in just 120 hours…

Not a Stop Loss or Take Profit with any of these concepts… Price sets your targets…

You could have locked in profits as the retracement was confirmed (Position Management) or just let the strategy make the decision for you… … Looks like the next update will demonstrate the Risk Mitigation strategy in use for some of these concepts…

I’ll update every 20-24 hours for the next 2 days……

[Trendswithbenefits]

Live call 144 hours in and these simple strategies have retained ~1250 pips + on the NASDAQ…

Using only 0.5 Lot positions we have profited over $960 in just 144 hours…

Not a Stop Loss or Take Profit with any of these concepts… Price sets your targets…

The RSI-X strategy as demonstrated below gives you a good overview of the strength of price action impulses as they are happening… At a glance you can see that the NASDAQ is in flux and has no firm direction at the time of this post…

(Above) 112 pips + 1053 pips = 1165 pips

The SSL strategy as demonstrated below has only generated a 24 pip loss even during periods of high volatility… This strategy is designed to capture more profit with slightly more risk applied than the other two concepts…

SSL - 287 pips + 1280 pips - 24 pips + 95 pips = 1630 pips

The Coral (Coloured MA) strategy demonstrates how most Moving Average combinations are complicated to trade… Even though we are using a smoothed 20 period MA… We get chopped up by the constant whipsawing of a ranging market… We have generated 2 losses totalling 70+ pips during this weeks volatility…

CORAL - 198 pips + 1031 pips - 55 pips + 20 pips + 20 pips - 18 pips + 106 pips = 1300 pips

All strategies have now displayed how they handle risk in these markets with out TP’s or SL’S even in volatile trending and ranging markets… You could have locked in profits on the NASDAQ once it started to range…Or as the demonstration has shown… Just let the strategy continue to make the decisions for you…

This capitulation in price action is a good example of how these simple strategies keep you out of trouble even during a highly volatile trading week…

I’ll update for the last time in 20-24 hours…

[fishmoyne1]

Thank you TWB,
This is opening up my mind a bit, changing settings and stuff on the RSI, I am manually backtesting on H4 with the Nas. I will admit I find it hard to get used to no Stop loss but it is a good exercise.

Now it is time to put it forward testing.

I will give a year or so tinkering and report back.

Cheers John
Ireland

[Trendswithbenefits]

Live call 168 hours in and these simple strategies have retained ~1250 pips + on the NASDAQ…

Using only 0.5 Lot positions we have profited ~$1000 plus in just 168 hours…

Next time you read that the only method of risk management in these markets is Stop Loss and Take Profit levels or you’ll blow your account… You’ll know it’s complete nonsense…

Price Action sets your targets…

RSI-X strategy (below) profited ~ 1500 pips (~$1150 over 7 Trading days)

SSL strategy (below) profited ~ 2050 pips (~$1875 over 7 Trading days)

Coral strategy (below) profited ~ 1300 pips (~$992 over 7 Trading days)

This practical lesson was based on a $2000 account and 0.5 lot positions (~$680 margin)

Did I actually trade the NASDAQ using a similar strategy…? See for yourself…

This demonstration of 7 days solid Live Trading shows how a simple rule based strategy can profit in these markets… Even during highly volatile price action…

Give these a trial on a Demo or Micro account for a few weeks and you’ll understand the more price moves the more you’ll profit… And the strategy… Not you… Makes all the calls…

Good Luck… Rounds Complete…

[fishmoyne1]

Hello TWB,
May I ask you a few questions about your history statement? I was just going over the entry and exit prices and I am using the RSI same settings as you mentioned plus on the H1. I am confused about most of the entry and exits.

31/7/24 (00.37) I can get the same entry but how did you determine the exit

31/7/24 (06.05) Here you bought where you got out in the last one but I cannot see where the reason for getting in at that price 18628.6. Again what made get out at 19490.2

1/8/24 This sell with the RSI would be still opened but what would make you get out before it gives a buy signal and wipes a lot of gains

I would love to see how you personally approach and get out of these trades if that is ok with you. Not asking to be spoon fed, just very interested.

John

[Trendswithbenefits]

@fishmoyne1

I would love to see how you personally approach and get out of these trades if that is ok with you. Not asking to be spoon fed, just very interested.

Hi @fishmoyne1 I don’t/won’t show the way I trade in this forum… The examples I have displayed here are successful strategies I used to use… I am developing my strategies all the time…

But I’ll still answer your questions…

@fishmoyne1

May I ask you a few questions about your history statement? I was just going over the entry and exit prices and I am using the RSI same settings as you mentioned plus on the H1. I am confused about most of the entry and exits.

I don’t use the RSI or the Colourised MA Indicators although I did have great success using both of these over the last 36 months… I do use components of the SSL combined with other concepts…
I posted my weekly trade statement for that particular account to display that even when the market is volatile… Profit can be made with a small account and small position sizing…

@fishmoyne1

31/7/24 (00.37) I can get the same entry but how did you determine the exit

Ok… You have to remember I’m in UTC10… 6.05am on the 31/7 Is the Market closed here in Australia… The NASDAQ is closed for 2 hours until 8.00am… There had been a big push down for the 6 hours the position was opened and a big reversal in that 6.00am candle… So I closed out the position and locked in the profit of 300 pips +…

I pay no attention to price or levels… My system signaled that the short impulse was over so I opened a Buy and waited for the market to reopen at 8.00am… This can easily be seen in the RSI Indicator as shown in post…

@fishmoyne1

1/8/24 This sell with the RSI would be still opened but what would make you get out before it gives a buy signal and wipes a lot of gains

Once again have a look at the RSI-X Indicator you can see that the Buy pulse has ended and the NASDAQ is consolidating… If there is no Buying strength then price has to go down…

See Below

Hope this is of help…

[fishmoyne1]

Thanks again,
So the lower highs on the RSI-X plus it going down below the 50 level (for the buy that is) is a fairly good warning sign the momentum is gone.

I am looking forward to doing another manual back test 3 months as you say. The first one I done last week I waited for the RSI to go to the opposite extreme so the result were probably a little better than break even.
As I say I appreciate you putting out these ideas, you definitely think outside the box

[MartialChartsFX]

I’m trading NQ using a 5M timeframe in my futures prop firm challenge and I’m only allowed to trade intraday and if drawdown gets too high the prop firm auto liquidates my positions, so I can’t afford to try this method over there.

It might be something worth trying on a Nas100 CFD. Thanks for sharing.

[Trendswithbenefits]

@fishmoyne1

As I say I appreciate you putting out these ideas, you definitely think outside the box

That’s the main objective of most of my threads… Get new traders here to think differently…

I might do another couple of threads over the next few weeks demonstrating other concepts in a LIVE trading environment using altered Indicator strategies…

@MartialChartsFX

I’m trading NQ using a 5M timeframe in my futures prop firm challenge and I’m only allowed to trade intraday and if drawdown gets too high the prop firm auto liquidates my positions, so I can’t afford to try this method over there.

@MartialChartsFX These could be traded on shorter TF’s although I don’t think the results would be as profitable with all the noise… I’ve always self funded my trading… So a Prop Firm looking over my shoulder is an issue I have never had to worry about…

[MartialChartsFX]

Being my first time ever trying a prop firm and they definitely stack the deck against you with the rules.

[ontario]

Avoid using stop-loss orders by implementing alternative risk management strategies, such as using options to hedge against adverse price movements or diversifying your trading portfolio to spread risk across different assets. Instead of setting a fixed stop-loss, consider trailing stops, which adjust as the market moves in your favor, or use volatility-based methods to adapt to changing market conditions.

[Trendswithbenefits]

Live call 7 days later and these simple strategies have generated another ~1000 pips + on the 1 hour NASDAQ…

All three strategy examples have only opened a single position over 5 trading days…Using only 0.5 Lot positions we have profited ~$750 plus in just 5 trading days…

Next time you read that the only method of risk management in these markets is a Stop Loss… Take Profit… RR Formulas’ etc. etc… Or you’ll blow your account…

You’ll know it’s complete nonsense… Price Action sets your targets…

RSI-X strategy (below) profited ~ 1000+ pips

SSL strategy (below) profited ~ 1000+ pips

Coral strategy (below) profited ~ 1000+ pips

Another practical demonstration of 5 days solid Live Trading using a simple rule based strategy can be profitable in these markets… Even during highly volatile price action…

Give these a trial on a Demo or Micro account for a few weeks and you’ll understand the more price moves the more you’ll profit… And the strategy… Not you… Makes all the calls…

Good Luck…

[Trendswithbenefits]

Live call 7 days later and these simple strategies have generated another ~750 pips + on the 1 hour NASDAQ…

All three strategy examples have only opened a single position over 5 trading days…Using only 0.5 Lot positions we have profited ~$560 plus in just 5 trading days…

Next time you read that the only method of risk management in these markets is a Stop Loss… Take Profit… RR Formulas’ etc. etc… Or you’ll blow your account…

We have 3 weeks of results in the bag… So you know it’s complete nonsense… Price Action sets your targets… Entries and Exits…

RSI-X strategy (below) profited ~ 580+ pips

SSL strategy (below) profited ~ 852+ pips

Coral strategy (below) profited ~ 850+ pips

Another practical demonstration of 5 days solid Live Trading using a simple rule based strategy can be profitable in these markets… Even during highly volatile price action…

Give these a trial on a Demo or Micro account for a few weeks and you’ll understand the more price moves the more you’ll profit… And the strategy… Not you… Makes all the calls…

Good Luck…