Stop loss is a very important tool that has to be used in every open trades. If you are not using stop loss then you are risking your entire investment on what ever trade you are doing.
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Well I do not use SL when I am scalping but do use it in almost all of my trades.Yes some traders feel they need to let their trades run without limits but per my trading style I have to use it , it really comes down to the individual trading style,strategy and trading edge to decide whether too use SL or not
I used stop-loss always, it helps me to set a strategy when I open the position. Need to know how much I would accept to lose. However, with slippage like the on GBP/USD few days ago I know that stop-loss is not allmighty âŚ
Every trade I place has a stop loss, but I very rarely hit one. The vast majority of my trades are exited manually when I see they are not working for me, or when I see their profit seems to have maxed out in the near term. A stop is about the only chance to get out quick enough in case of a âBlack Swanâ event, without having your account wiped out. In a really large sharp spike, a mouse click just can never be fast enough. Just my own humble opinion.
only time I dont use stop losses is when I am hedge trading
I am still using stop loss so often in my trades but sometime also using hedging strategy, and sometime also trying averaging strategy with put stop loss on same area, sometime fail and if get success with this strategy sometime giving good profit
Yes it is up to a trader how he feels comfortable with trades he can use or not use stop loss tool. I mostly use stop loss . Some times when I am monitoring trades fully I skip to use stop loss. I then try to manage trades instantly.
Oh really? Definitely, I use stop loss trading tool in my live account, as I know basic rules of Forex trading! Trading, without stop loss is really horrible! Then you can lose your full balance at any time! On the other hand, I always set my stop loss trading tool according to my market analysis with +5 to +10 pips!
not so sure about thatâŚjanuary 15th 2015 (swiss franc removing itâs peg to the euro) was such an event and many many stop losses were not triggered, because there was no price available, so price passed stop losses and accounts were wiped out even with SLâŚ
i think the only way to survive a black swan event is managing your position sizes correctlyâŚe.g. orienting your position size at the alltime high/low of the pair you trade, if you can survive such a drawdown then you might be quite safe (not a life insurance, but mabye the best you can get)âŚon the other hand you might not find the profits attractive enoughâŚ
Does anyone have experience of using guaranteed stop losses that some brokers provide? I assume they would operate as expected in, for example, the swiss franc/recent (alleged) fat finger incidents?
you mean gbp/usd fat fingers incident probably âŚ
guaranteed means, they will fill it at the level you have in stop-loss, so no slippage concerns for you ⌠but not every broker is providing it
I agree that a stop isnât a guarantee to protect your account, but it is a good tool that will work in most cases. In the rare case like the Chf spike you mentioned, price can blow right through your stop if there is no counterparty willing to take the trade at your stop value. In that case, you are depending on a combination of the stop and your trade size management to limit the damage. I was in that Chf trade with a very small size and my stop executed about half way down the spike with only reasonable slippage. The loss was tolerable considering the speed and magnitude of the move. Using a good broker helps a lot too since they have lots of feeds and counterparties to help execute trades smoothly without unreasonable slippage. Iâd advise new traders to always use a stop as well as size trades to risk a very small amount of equity. Most pro traders risk no more than 1 or 2% per trade. Iâd say 2% is about a max. A new trader should think more in terms of 0.5 to 1% max risk per trade, and ALWAYS use a stop loss, even if it is placed well beyond the expected range of the trade. If the stop is placed well beyond the expected range of the trade, then it will only be triggered if something unexpected occurs, and thatâs just when the stop is most needed. In my own humble opinion, trading without a stop is like driving a car without any brakes. It works just fine until you need it and itâs not there. Then itâs too late to reconsider. Best success. - G
Before entering in the trading we should set the stop loss as it keep the trader safe from the huge loss, I always use the stop loss, I am astonish that you are trading without using stop loss and making money.
Even though a stop-loss order is a simple tool to prevent excessive losses or to lock in profits, I donât always use it. I have noticed that a stop-loss strategy leads to lower returns even though it would reduce volatility. But itâs good to know you have the protection should you need it.
I think itâs not about ânot using stops at allâ, but how to avoid stops hunting, I found answer in one of books about âTurtlesâ, they use âmanual stopsâ, so random spikes will not hurt positions.
But you should use a wide stop loss than normal instead of not using one at all. Its a waiting game, trading, so you cannot sit all day at charts to see if the loss is enough close trade or not.
Basically you should only trade with money you can effort to lose. The only logical reason I can think of for you trade without any stop loss is if you have enough money (considered to your trades size) in your trading account that you donât care about. If so you would be able to stand up to big movement in the opposite direction of your trade(s). Of course that is risky. However soon or later the market will turn in your direction (key word = eventually). If you rely on that logic and have enough money in the account (and patience), you can afford trading without a stop loss. If not than use at least a wide stop loss as forexcrisp suggested.
In some cases stop loss is helpful but in other cases it is not. So I guess it shouldnât be used all the time. But this is only my opinion. It is better for the person who does not have experience to use it as a precaution but the more experience he earns, he learns how to avoid using it by just monitoring the market conditions. Of course we should be careful for any important news releases which can cause sharp market movements. It is indeed quite risky to not use stop loss but in some trading styles and strategies is better to not be placed. For example it can be replaced by price alerts.
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