I’m in agreeance. It’s more fun to talk about pips, but it’s the percentage that counts. If he’s employing my methodology around pip size, he has about a 10% gain in equity.
Hi MG,
What about if something happened and you couldn’t connect to your broker for several days or so for some reason and you weren’t able to close a losing trade manually or a winning +900 trade that became a losing-900 trade?..like if you got into an accident (heaven forbid) or a disaster of some kind plugged up the communication channels, or something else unforeseen…
I just got told not putting a stop was “One tsunami from disaster”…
It’s not likely all the trades would turn on me out right. I have multiple sources of readily available internet. I understand if someone wants to put in an “Oh crapola” stop loss.
I just personally accept the risk and am willing to absorb it of the worst case scenario occurred.
MG you are absolutely right, your approach is to spread the risk, the only conceivable occcurence that could cause you to wish you had a SL would be the return of the bartering system and and end to currency - maybe a meteorite hit.
On the other side, my own experience of no sl was back many years ago, in stocks, the single biggest loser on the nasdaq - there I was - lesson well learned, put in the sl - that meteorite can hit
Do’nt believe me?
Check out the more recent loser this side - not in thousands, not in millions but in billions - he had no SL.
But it should be noted that these are not 28 unrelated instruments; they are combinations of just 8 currencies. And when the risk-on/ risk-off behavior kicks in, it boils down to the safe haven currencies versus all others making the hedging aspect of this portfolio questionable.
If you are risk-on overall and things suddenly turn risk-off, all of your positions will move against you. This may be fine as long as you are able to monitor the trades and know when to pull out. But for someone with an under-capitalized account, who decides to up the position size after seeing the thousands of pips, that would be the day that the sky falls.
<cue for all of you to start singing Adele’s song and ignore this rant>
If you understand my methodology I am not against stops. I’m against their use to contain the market and not allow for volatility.
I personally accept the risk that all pairs could improbably move against me by 1000 plus pips simultaneously. I’ve never seen or heard of that occurring so I’m content with how I approach risk.
My point was not about stop losses, but about the claim that it is improbable for all positions to move against you at the same time.
In a portfolio that takes similar positions on similar instruments, this can happen. In fact the results posted on this thread show this happening; gains and drawdowns for individual trades in each portfolio are occurring pretty much in sync.
Shorting GBP against everything else will multiply the number of pips gained if GBP is weak, but also multiply the number of pips lost if the trade goes awry. Just something that should be kept in mind, similar to the pros and cons of leveraging. This is why portfolios are composed of [B]diverse [/B] high performing instruments that have a lower risk of failing at the same time.
Maybe you are choosing pairs differently, but I see others on this thread taking GBP vs everything, or AUD vs everything, etc.
I am not thinking of extreme numbers. A 100 pip loss across 5 pairs is a 500 pip loss. I know your position size is tiny so you can handle such losses, but I’m not sure if everyone understands the reason why this is so important.
Thanks for the feedback. Yes I am up just under 10% in equity, which if it was real money I’d be more than happy with.
At this stage I’m not concerned with the $ value of the demo a/c, I’m just trying to learn getting in and out of trades at what I perceive to be good places. Turning unrealised gains into realised is also part of the mind set I’m learning and at this stage I find pip counting is easiest.
Mustergunner, thank for your thread. Im glad there is people like you, who are willing to share their experience and help other people like me to become a smarter and happier trader. Thank you, im enjoy following you.
Is there any book that you can recommend on price action ?
A 500 pip loss is about 5%. People that are trading this methodology understand the low pip size. Before even actually trading, that is talked about first. All important posts are found in the first post of this thread. And I’m certain every new active reader has read this.
This methodology is protective against large risk. If you’d stop questioning on speculation and start trading it you would be able to comment from a position of experience and not just guessing about extreme risks that are a rather moot point here.
Mastergunner99 your thoughts on USD/CHF? Monthly is a clear downtrend where as Weekly its been ranging for the past year? Small downtrend on daily, im short at 0.92500, 1st target 0.90200, 2nd target 86.500.
Most of the charts seem to be showing a pinbar / doji today so i didn’t read too much into it? EURUSD, AUDUSD, DAX30, DJIA to name a few. Maybe that was a mistake by me?
I guess waiting for USDCHF to hit 0.91600 first before i shorted would have been better…
