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Author Topic: Is Stop loss is also a part of the trading business?  (Read 37333 times)

Offline drunkfx

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Re: Is Stop loss is also a part of the trading business?
« Reply #105 on: April 29, 2019, 02:39:46 PM »
Trading without stops is driving a car without brakes - sooner or later it will end with a crash. Its mathematically proven that in n trades you will get a trade which will completely wipe out your deposit.

Stop loss is essential protection from market irrelevance and unlimited market power. But placing stops is an art and should be based on analysis, intuition and adjusted according to volatility.

Pick nice brokers such as Tickmill and Hotforex which ensure an order close at exact stop loss price and rarely exceed it.

You're preaching to the choir when you talk about SL to me, I am a firm believer in using it for the reasons you already mentioned. :)

When we control our losses we can expect that they won't exceed some limit which will be out of our expectations and bring psychological damage. Expected losses is very important because it helps to take them easy and avoid committing stupid mistakes.

Offline Eliza Abrams

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Re: Is Stop loss is also a part of the trading business?
« Reply #106 on: April 30, 2019, 02:52:16 PM »
True. That should be a part of one's carefully prepared trading plan.

Offline marcopiccollo

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Re: Is Stop loss is also a part of the trading business?
« Reply #107 on: May 24, 2019, 11:22:55 AM »
Agree with most of what was said. It is necessary to have stop lose set up to secure you money from every sitiation that could happen

Offline Eliza Abrams

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Re: Is Stop loss is also a part of the trading business?
« Reply #108 on: May 27, 2019, 03:31:34 PM »
True, if the stop loss is properly placed as a part of a tested strategy. An improperly used stop loss can also lead to losses, sadly.

Offline FxTS

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Re: Is Stop loss is also a part of the trading business?
« Reply #109 on: May 28, 2019, 08:14:40 PM »
To my mind, most of the traders thinking that stop are useless just do not know how to use them properly. In fact, placing stops is one of the most important parts of any trading system. Professional traders say: "Always trade with stops". Stops are necessary to be able to manage risks and maintain risk-reward ratio. Of course, sometimes it is possible to use mental stops, but this approach is mostly for swing / mid-term traders, while for daytraders it is better to use stop-orders placed at pre-defined levels.
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sidewalk-star

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Re: Is Stop loss is also a part of the trading business?
« Reply #110 on: May 28, 2019, 10:21:45 PM »
To my mind, most of the traders thinking that stop are useless just do not know how to use them properly. In fact, placing stops is one of the most important parts of any trading system. Professional traders say: "Always trade with stops". Stops are necessary to be able to manage risks and maintain risk-reward ratio. Of course, sometimes it is possible to use mental stops, but this approach is mostly for swing / mid-term traders, while for daytraders it is better to use stop-orders placed at pre-defined levels.


I personally trade using my own grid system (non-Martingale). Using stop loss orders would not be at all effective with this strategy, so that goes against them "being one of the most important parts of any trading system". In fact, it was only when I started to trade without a stop loss that I became consistently profitable. We all know banks and institutions use stops for liquidity, so they are sitting ducks, really.

I guess it comes down to what you were saying about the difference between day trading and swing / mid-term traders. I fall into the latter category. Bigger profits to be had and less screen time - it's a win-win for me.

No stops is definitely my preferred approach, and rather contrary to what others might think, I actually sleep better at night knowing I don't have any stop loss orders in the market that can be a huge liability, in terms of messing up my trades.

Others may disagree, of course.  ???
« Last Edit: May 29, 2019, 09:35:32 AM by Balanced FX Portfolios »

Online petersurrey

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Re: Is Stop loss is also a part of the trading business?
« Reply #111 on: May 29, 2019, 09:58:39 AM »
To my mind, most of the traders thinking that stop are useless just do not know how to use them properly. In fact, placing stops is one of the most important parts of any trading system. Professional traders say: "Always trade with stops". Stops are necessary to be able to manage risks and maintain risk-reward ratio. Of course, sometimes it is possible to use mental stops, but this approach is mostly for swing / mid-term traders, while for daytraders it is better to use stop-orders placed at pre-defined levels.


I personally trade using my own grid system (non-Martingale). Using stop loss orders would not be at all effective with this strategy, so that goes against them "being one of the most important parts of any trading system". In fact, it was only when I started to trade without a stop loss that I became consistently profitable. We all know banks and institutions use stops for liquidity, so they are sitting ducks, really.

I guess it comes down to what you were saying about the difference between day trading and swing / mid-term traders. I fall into the latter category. Bigger profits to be had and less screen time - it's a win-win for me.

No stops is definitely my preferred approach, and rather contrary to what others might think, I actually sleep better at night knowing I don't have any stop loss orders in the market that can be a huge liability, in terms of messing up my trades.

Others may disagree, of course.  ???

Forex brokers thrive on stops as their profits are generated from the spread - the more trades the better. Forex trading also allows/encourages access to huge leverage, hence why stops have become more important - a few pips can mean huge $$ returns or losses, and drive the value of that spread to the broker even higher.

If you trade 1:1 ( ie 10K USD account to 1 mini lot) it would take a huge move to materially affect the account @ $1 per pip; so I agree stops would not be so crucial for very *low* leverage accounts, but I would still have an equity protection bot in place just in case. It was not that long ago (2008) that the GBP pairs lost thousands of pips in a few weeks, and the recent benign volatility may be lulling many into a false sense of security - markets can change very quickly!

Offline Penumbra

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Re: Is Stop loss is also a part of the trading business?
« Reply #112 on: June 30, 2019, 09:33:17 PM »
I enter every trader with a heart-attack-stop, that has gets hit twice a year and apply apropriate stops, as my position develops in the market. Target: Low single digit % losses

Offline Loperte

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Re: Is Stop loss is also a part of the trading business?
« Reply #113 on: July 16, 2019, 02:50:58 PM »
I am also using stop loss regularly. I have already seen several times how market can be cruel when it comes to volatility. My chart was looking pretty scary during these times. So, then I have decided that I will always apply stop loss order

Offline Aaronpp

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Re: Is Stop loss is also a part of the trading business?
« Reply #114 on: August 06, 2019, 08:40:12 PM »
The Stop Loss option is widely used by me also because it is super important to set the limit that I am able to when investing, If I didnt use it the losses would be very large and especially when Im not connected to see the status of the operation.

Offline fxopen78

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Re: Is Stop loss is also a part of the trading business?
« Reply #115 on: January 20, 2020, 09:02:11 PM »
Forex market is big mystery price movement ahead, we never know exactly how the prices will go ahead, trading without stop loss will make regret since open trades against the trend and the trend is a very strong movement, margin call could occur since trader without stop loss, bank intervention could make any currency move rapidly

Offline Sami Samith

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Re: Is Stop loss is also a part of the trading business?
« Reply #116 on: January 21, 2020, 11:09:52 AM »
YES! Stop loss is the part to Forex trading!
It's the best way to minimize loss ratio for all newbie traders as well as experts.
It is used to close a trade when it reached to set loss position.

Offline fxopen78

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Re: Is Stop loss is also a part of the trading business?
« Reply #117 on: January 21, 2020, 08:06:29 PM »
Sometimes use stop loss is annoying, since hit stop loss then price move accordingly to our target, but because already closed position by stop-loss, hence target profit obtained only as a dream, however using stop loss still become one gate to prevent from sudden movement unexpected

Offline drunkfx

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Re: Is Stop loss is also a part of the trading business?
« Reply #118 on: January 22, 2020, 06:25:43 AM »
Sometimes use stop loss is annoying, since hit stop loss then price move accordingly to our target, but because already closed position by stop-loss, hence target profit obtained only as a dream, however using stop loss still become one gate to prevent from sudden movement unexpected


It is wrong and deceptive impression that market hunts for your stop losses. Random volatility is at work and as the human eye is trained to recognise patterns we want to have explanations why we lost (stop loss was hit). The easiest and the most appealing explanation is intelligent market or cheating broker that drives price exactly where your stop loss was set.

Offline fxopen78

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Re: Is Stop loss is also a part of the trading business?
« Reply #119 on: January 23, 2020, 09:53:50 PM »
Indeed as I know there are dealing desk broker that working smart with software stop-loss hunter, I am ever reading about this, but if use NDD broker, I think this does not make sense, dynamic market sometimes make our stop loss hit, maybe because too tight stop loss distance, but we can evaluate our trades afterward

 

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