Do any of you, by any chance, don’t use stops? if so, why? What could be the effect on using Stop Loss on your trade?
Just wondering… Thanks!
A Stop Loss is designed to protect your capital in case a trade goes against you. It’s explained in the school.
If you’re sitting at the computer and monitoring your trade, you could get away without using one. But, if you’re not monitoring, then trading without a Stop Loss leaves you open to losing your whole account if things go wrong.
yeah i know that… I’ve learned that in School… I was just wondering because i heard from a friend that He really Never use stops… So i thought I might ask it in the forum…
I guess it’s just his choice not to use stops for the reason that he might not be able to monitor the trade…
Thank you for reply…
Some brokers won’t even allow you to put on a trade without a stop loss (I know tradestation doesn’t). If you’re trading on margin, your gambling with someone elses money and your broker is gonna want to get paid if you’re wrong.
That being said, I don’t see why the hell you wouldn’t do that. Even if you had like a -100 pip s/l… **** happens, world events happen, i see no benefit of not placing a risk limit on each and every trade you take.
I did not said that i wouldn’t do that… I was just kind of wondering when i heard it from a friend… That is why i want to share it here to know the opinions and insights of other members…
Well anyway, thank you for your sharing… I appreciate it…
I know a few people who trade without stops, but they’ve all got a few things in common:
- they’re mostly trading long term - holding positions for several days or more
- they’ve all got a mental stop - ie a place where they know they’ll close the trade
- they’re all paranoid, rightly or wrongly, that by placing a stop loss, the broker will deliberately massage the price to take them out at this level.
… and also
- some of them wait to see if a price break is a spike or part of a real trend reversal, so will monitor the trade on screen rather than stop it out automatically.
oh alright… well, they really might have their own reasons…
Yup, that’s precisely why.
The only thing with no stops is that you have to be IMMENSELY strict on yourself. If it hits the point of your stop…get out.
There’s also the fact that some trading systems do not utilize them at all. For example, a simple moving average cross-over system is alway either long or short, so there’s no need for a stop. In fact, a number of systems I’ve tested over the years actually show worse performance if you use a stop.
I agree! so that is what they call to monitor the trade to be able to watch if the point hits the stop…