I agree with you. Some people consider trading without a stoploss to be sheer lunacy. Just because I don’t put a SL in most (if not all) of my trades, does not mean I am not managing my risk.
Then again, it all depends on the style of the trader, and their broker’s restrictions. If you’re with a market maker, yeah, you’re likely to use a stoploss since your only option to hedge would be trading in the opposite direction, on a different pair, that’s sharing the same momentum as your initial trade. Which can be risky, since cross-pair momentum changes all the time.
If you’re like me, and you have an ECN that has zero restrictions, then SL is not as necessary as some think it is. It lends a (I don’t want to sound all corny and whatnot, but) new-age way of trading, that traders 20 years ago didn’t have. I can hedge, pyramid, open 50 positions if I want all going the same way. If a pair is moving one way, and my first trade against the grain doesn’t work, I can just wait for 15 minutes, and open another, then rinse and repeat until the momentum shifts direction, adjust my TPs, and end up with me taking an overall profit on that pair. If I do the old fashioned 2:1, or 3:1, I’d lose.
Granted I’m just using my measly $320 with 200:1 leverage right now, so my risk is astronomical for even 10 pips on a 0.1 lot. :18:
But I’m up $120 after a week and a day of trading so far without SL, and was up $4.5k on my $5k practice account after two months.
Banks and some brokers hunt people SL’s. If you can identify levels, momentum, and manipulation, the manual click is superior to the automatic red line IMO.
But to each his own. Forex trading is not something that’s universally set in stone for everyone. It’s a highly personal thing. If you’re profitable using SLs, all the power to you. If you’re profitable without, you’re still making money, so I don’t see the problem. My biggest reason why I stopped using SLs, is because I fell into that pit that a lot of other traders do. They’d take a loss, and say “It’s okay. It was a good trade”, over, and over, and over again.
In my books, it’s not. A losing trade is not a good trade. Especially if it happens repeatedly. Once I spent months reevaluating my system, and ditched the red line, the red pips stopped, and the green pips came marching in.
Out of the box thinking is key in forex, since the big banks and brokers want to keep you in the box and push you around and take your money.