I hope someone will consider this post as something serious. hahaha. Anyhows, I would just like to ask from your point of view, is putting a S/L in a trade more advantageous than not putting anything at all? I have been trading on a demo account for more than a month now, and this is what I am doing: Put a T/P of likely 10 pips and then NO S/L. With this strategy its almost a win-win except for one trade that i closed because it almost reaches up to 30% loss of my capital. But overall it works for me on a DEMO account. What I am not sure of right now, if this is advisable in Live account? Thank you guys.
The question of a stop loss or not is not a stand-alone issue. It should be an integral part of your overall strategy, It is a component of your risk management parameters, which are a crucial element in your overall trading.
For example, with 10 pip targets, a move of 50 pips on any one trade in the wrong direction (which is nothing unusual in forex) wipes out 5 of your profitable trades.
Also, there are occasions when unexpected events occur and the price can move very quickly against you. If you have no protection in the form of a stop loss in place then your entire account may be at risk.
The question of where to place your stoploss depends on the strategy you are following and is especially difficult with methods based on such small profit targets. If you have a stop loss of less than 10 pips you are most likely going to get stopped out frequently.
In principle, as a trader, you should only be in a trade while it still meets your entry criteria. Therefore, your stop should be at a level that, if reached, would nullify your reasons for having entered the trade in the first place. For example, if you enter a trade on a bounce from a support level then your stop would theoretically be somewhere on the other side of that support line.
There has been a lot of postings on this topic in the past and you might find some useful info on it by also using the search function here.
Hi there. To tell you honestly, I did not use a stop loss or a TP when I opened my first trade on my live account. Came back to it 3 or 4 days later and my account was up 10%!! That was on a EUR/USD long position with the maximum units I can trade. I thought, hey this is easy and I will be rich in no time. A few days later, I opened another long position on BCO without any risk management, and guess what happened. I wiped out 20% of my account.
SL is a trading virtue. You can go without a TP but never go without an SL.
Fundamentally, you want to trade because you want to increase your wealth. But the second agenda is not to lose any of your capital.
Without setting a stop loss your condition as like a ship in an ocean without a rudder, so there is no way to avoid this trading technique when trading in spite of good knowledge and experience.
