Who says trading without a stop loss is stupid? Find out why this guy thinks it’s not!

Rrram2 is no ordinary trader. He chooses to veer away from trading conventions, and sets up his own path to profits.

Since becoming part of the BabyPips community a decade ago, he has always been open about sharing his unique trading style. Wanna know what that is? Well, he never uses stop losses, except to lock in profits. He even created a thread entitled Rrram² Fx Fitness Journal to share how he makes this strategy work for him.

Apart from this, he was also the OP of the much talked about thread Trading is easy! don't over complicate it! where he gives beginners his tips and tricks to become self-reliant traders.

Today, we get to know more about his trading journey and how this unconventional, yet effective strategy has brought him success.

Without further ado, we give you @rrram2!


1. Tell us something more about yourself. What are your hobbies and interests, etc.?

OUTSIDE OF TRADING, I don’t really have much interest in anything else. I like eating, sleeping, driving fast and trading.

2. How were you introduced to forex? What resources did you use to learn how to trade?

My uncle was the one who introduced me to forex trading, about 25 years ago. I learned to trade from my dad and my uncle at first. I also really liked and learned loads from Raghee Horner and Henry Liu.

3. You are the OP of a controversial thread “Trading is easy, don’t overcomplicate it!” If forex trading is so easy, why do you think majority of newbie traders find it difficult to be profitable?

This is quite simple. Most of what is taught in trading is of the retail mind set. Retail Traders (RT) are taught to buy on breakouts at the tops and bottoms. This doesn’t work well in the long run. After everyone has bought, that is not when you start buying!

Trading is hard because most traders are taught a pile of lies about trading to make it easier for the market makers, LP’s and banks to take their $. At the point where RT’s are entering the bank is exiting and vice versa. The RT’s main errors are: buying high and selling low, not staying in the market, overleveraging, using large lot sizes and tight stop losses and, using stop losses to realize losses. Stop losses are best used to lock in profits with a trailing stop (TS).

4. When would you say a trader is “successful”? Do you consider yourself one?

Successful in forex = profitable.
I am of course successful and very profitable

5. What are the 3 most important things to remember if you want to make a living out of forex trading?

  • Never use a stop loss to realize a loss. If you need a SL to realize a loss, you entry is either bad or your exit is too early.

  • Do not overleverage! Overleverage often is driven by greed, and will kill your account dead quickly! Best is to slice orders up and use small orders and wide spaces between the entries.

  • Never enter a trend, and trade with the trend after price has been trending for 200-300 pips in your intended direction. Focus on the longer term trends, but ideally you want to get in at the significant levels where the reversals typically occur on the long term. Even though every reversaL HAS TO REVERSE ON THE 1m FIRST, IT’S BEST TO TRADE 4h OR DAILY OR EVEN WEEKLY REVERSALS!

6. A stop loss has always been a very important part of each trade as it primarily helps traders minimize their losses. However, you’ve shared in the past that your strategy involves opening positions without any stop losses. How do you make such an unconventional approach work for you?

I NEVER use stop losses except to lock in profits.

A stop loss is important if you need to realize a loss, but you should not accept losses! Losses are caused by bad entries, overleveraging, and not being patient. If you feel the need to use a stop loss then your confidence in the trade is very small, don’t trade if you have no confidence in a trade!

7. What was the biggest challenge brought about by your trading strategy and how did you deal with it?

The biggest challenge has been DD (drawdown). Most teach that DD is bad, but that’s really a big fat lie! DD is risk on, the more risk on you have the more orders you have that can possibly be closed in profit.

DD is like a mortgage, it sucks psychologically, but think of it as a mortgage. The key is small lot sizes lots of orders and wide spaces between orders, and much patience! A mortgage in the long run, ALWAYS beats paying rent.

8. What’s your most memorable trade so far? What made it so special?

I have so few losses that I more relish losses now. none of my trades are that memorable. Key is small profits, not hitting a grand slam. Lots of small profits are way better than striking out 99 times for every grand slam you hit.

9. Non-forex related questions! If you could have personally witnessed anything, what would you want to have seen?

I would like to see the world turn (spin). The spinning ball story is also a lie! If you imagine you are spinning, it will likely make you trade like you are dizzy. Get off the imaginary spinning ball, and trade like a non dizzy trader :slight_smile:

10. If you could go back in time and leave a message for your younger self, what would you tell him?

This is a tough one, but I would have told myself the truth long ago and explained that time is a psychological illusion. Humans think one thought at a time, so all thoughts are in order one after the other.

Time is important in the markets and you need to put some bigger spaces in time in your trading to allow your trades some time to mature and move!

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Have to agree with most of what is said here. I never use stop losses either.

The problem most people are going to have is, they can’t afford to just wait it out, as it could takes months for price to come back.

And I’ve entered many trades that were already trending for 300+ pips only for them to go on for another 1000+ pips before reversing but everyone has their own plan that works.

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I think that would be scary for a beginner

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Scary ? - Read those threads ! - a beginner would need to be a PhD in Chaos theory to even contemplate @rrram2 s method !

Yet it has a lot of logic and realism in it !

:sunglasses:

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after its trending for 300 pips I want to enter the other way :stuck_out_tongue:

or I want to get in at the reversal ahead of it trending 300 pips :smiley:

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Didn’t learn much here. Not using stop loss is okay depending on the time frame you are looking at. The writer doesn’t mention what time frame he uses. I don’t recommend not using stop losses if you are not watching the market closely. Like I said, it all depends on what time frane you are using.

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Glad to read this. I’m new and have been demo trading since July… still don’t feel ready to go live yet… I was doing well when I didn’t use stop losses but it made me feel I was doing something wrong because I always heard to use a stop loss… but what ends up happening is I would get stopped out, the trade goes against me a bit just enough to stop me out, but then it will go toward the direction I originally entered! I’ve been stuck these past few weeks trying to utilize stop losses and not doing too well. I can only swing trade and trade the 1H and 4H and got killed when I didn’t have time to check my trade when I didn’t put in a stop loss. I do like that method but I will only use it if I’m on top of it and constantly checking.

The writer did write “IT’S BEST TO TRADE 4h OR DAILY OR EVEN WEEKLY REVERSALS”!

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I agree with the writer. I have been trading successfully for 8 years, and I contribute some of that success to not using stop-losses and using the correct Lot size to withstand a large Draw-down.

Most new traders and some experienced traders rely to much on protecting their accounts with stop-losses, instead of spending more time analyzing their trade set-up.

If you’re confident in your analysis, why would you need to place a stop-loss.

Before you can learn to trade Forex, you must first learn how to analyze the Forex Market.

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And by learning how to trade the forex market you directly learn how to analyse the markets, the outcome here is knowing when to get out of the market because you are wrong. There is nothing wrong AT ALL with being wrong, it happens to us all from time to time, but holding a position and waiting for price to ‘finally’ come back does not perhaps demonstrate skill, per se. In fact it’s silly to even consider such an approach as “FX professionalism”. That is not skill, that is a grid system, that is a systematic hope and hold approach and that should not be endorsed by anyone who knows anything about making any means of success in the space of speculating, especially around potential new traders.

I like to go by facts - and i’ve not seen this succeed ever (over time, at least)

Rrram2 - this is nothing personal, just me standing up to what makes analytical sense. Your public personal account which you kindly shared (and thank you, it’s rare that ‘real’ live accounts are shared) after three months of trading is currently at an equity value less than your total deposits. Apologies if I come across as flaming you individually, it just happens to be a good example :innocent:

Edit: I totally get the idea behind not using a stop, phasing into longer term positions as the trend moves against you and building a drawdown, because when the tides do change you’re certainly going to cash that cheque in. But, and here’s the real world issue, eventually you will be short a bunch of positions at a market absolute low as it turns to continue rallying for over a year or so. Yes, you can keep your positions small, in fact so small that perhaps you ‘could’ ride it out - but let’s just agree on one thing; This is a mathematical system based on the law of averages - essentially what i’m getting at is that you don’t need to be wrong or right (which sounds perfect). However, you DO have to “hope” that you’re never catching an all time low or high in a market when speculating in the wrong direction - because it’s never going to come back to pay you off?

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Some of us have that ballsier’ approach. Again I like using SL’s, but technically speaking any trade can technically bust a trend it’s just how long could it possibly take to reverse. I rather go my way if the market reverses on me and hits my SL that’s ok it’s part of the learning curve/lesson. Imagine a disgusting news event that could wipe out a whole price level or two. If you have the stomach to take that chance of weathering it by all means do what you must!

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Yes, that’s exactly what he wrote. He should have wrote instead - I TRADE THE 4H AND DAILY TIME FRAME.Does he trade the weekly time frame?. I still don’t recommend trading such time frames without a stop loss particually if you are trading GBP/USD at the moment - brexit and all, you may get crucified.

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I tell you.
I dare not try that. Not all of us can dare to be weird & not all of us can be weird either

In my opinion over leverage isn’t bad if you have discipline. I have $1000 account with a 1:1000 leverage but I still trade micro lots. My margin go as low as $1 which gives me the certainty of taking a black hole Draw Down when I trade without SL.
Because without leverage how do you survive the large DD that comes with trading without SL? By having a large account? yeah that works too, but not many people have that.

I do use SL when I trade textbook patterns (double tops, heads and shoulders, pennants, triangles etc.) Other than that I don’t usually use SLs aka “Death by a thousand swords”

Yeah I’m not that brave, but that I can understand you scale down your units if your aren’t certain and for that I can commend you. I’d rather lose $1-2 vs $100-$200. You got a whole heap of leverage to play with and you’re right while it can be dangerous it also gives you a lot more room to open potential trades.

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I’m interested in how Rrram2 approaches trading without stop loss.
Is there anywhere that he describes his actual approach.
Is it any different to cost averaging or martingale?
Watched the 45 min youtube clip which didn’t tell me much at all.

I’m not sure, but that seems like gambling to me if you use no stop loss at all. What if one day things go really bad, and your account gets wiped out?? A stop loss could have prevented that from happening

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Hey BS,

It’s a hold and hope approach where he’s using low actual leverage on a high maximum leverage account. Hence his position sizes are so so small that he can afford to wait for price to come back - in most instances. This is why his account usually has a large amount of drawdown, currently >50% which you can see here…

It is what it is, i’ve said enough on my thoughts in other threads. It’s just a numbers game (law of averages) with this approach and a large degree of “hope”.

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I believe this particular trading strategy is called pray for pips.

this is awesome man, good job! :slight_smile: