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  1. #1
    Super Moderator Gulfstream's Avatar
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    About Stops

    When at the traders’ hangouts a question on stops arises the holy war starts: to set or not to set, and where, and other stuff like that.

    But the biggest mistake in my opinion is that people believe that the stop is a certain element of the MM or Risk Management. Particularly the immature minds are affected from reading books, where they are offered to set the stop at not more than 2% on the previous candle, and other "classical" methods like "cut your losses, let profit run".

    From the position of the quantum, a stop is the same way to go out of position as a take-profit, n-Bar stop, or the default system output. But today we are talking about stops and the MM has nothing to do with it. Yes I agree that the stop affects the risk, but at the stage of the system design, at what risk is an objective reflection of the System Preferences. MM and RM are the completely different stage of System Development Framework, and it is better to leave it until later in order not to stuff our heads with superfluous information, but act consistently.


    Dedicated to fans of short stops

    Some people believe that a short stop proportionally reduces the risk, but it is not so, to set short stops one needs the perfect timing to enter. And when the timing is not easy the market with persistence knocks out all these stops, there appear all the fables of the puppeteers ...

    Stop Loss is set not to exit the market when it goes against the position. It is set in order to go out when the market will drop as a stone, i.e. I think that the stops are not for regular situations. I believe that an acceptable level of output by the stop is 5-10% of the sample, stop is the last hope for the system. In regular situation the system should have the rule(s) on the way out of position, the so-called smart stop when the system determines that the market has changed and it is time to leave. The idea of this post is that the stops should be set far enough from the market, because they are the last line of our defense.


    source_http://ubertrader.livejournal.com/2053.html

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    Last edited by Gulfstream; 02-27-2013 at 04:38 PM.

  2. #11
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    stop loss is the strategy of being defensive, many traders learn all the aspects of trading except risk management. Understanding risk prevents you from destroying your equity, and allows you to take the largest trade, without risk management you are literally gambling. you can use trailing stop too, stops aren’t just used to minimize losses, it is also used to lock in profits as the price go our way and produces profits. when a trailing stop is placed and the price back, the stop automatically adjusts to lock in profits.

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  3. #12
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    Quote Originally Posted by the prayer View Post
    stop loss is the strategy of being defensive, many traders learn all the aspects of trading except risk management. Understanding risk prevents you from destroying your equity, and allows you to take the largest trade, without risk management you are literally gambling. you can use trailing stop too, stops aren’t just used to minimize losses, it is also used to lock in profits as the price go our way and produces profits. when a trailing stop is placed and the price back, the stop automatically adjusts to lock in profits.
    Stop loss helps a trader to defend his capital in trading. It is a tool which if used efficiently helps a trader to manage the risk associated with Forex trading and keep it as low as possible. He can use his knowledge to increase his earning by keeping his risk and losses minimum.

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  4. #13
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    Stop loss always avoid us fro big loss so it must be used but most of the traders feel it is useless to use this tool in trading but this tool has much importance in forex trading market and if we use this tool every time then it will avoid us from big loss and stop loss must be used in support and resistance levels.

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  5. #14
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    Stops are known as life saver when you dive in the sea named forex. Actually we never know which way our trade will go, so by setting stop loss we are preparing for losing situation, and stop loss will ensure that we shall not lose above an extent.

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  6. #15
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    Quote Originally Posted by Gulfstream View Post

    Dedicated to fans of short stops

    Some people believe that a short stop proportionally reduces the risk, but it is not so, to set short stops one needs the perfect timing to enter. And when the timing is not easy the market with persistence knocks out all these stops, there appear all the fables of the puppeteers ...

    Stop Loss is set not to exit the market when it goes against the position. It is set in order to go out when the market will drop as a stone, i.e. I think that the stops are not for regular situations. I believe that an acceptable level of output by the stop is 5-10% of the sample, stop is the last hope for the system. In regular situation the system should have the rule(s) on the way out of position, the so-called smart stop when the system determines that the market has changed and it is time to leave. The idea of this post is that the stops should be set far enough from the market, because they are the last line of our defense.


    source_http://ubertrader.livejournal.com/2053.html
    its important to set stop loss no matter our strategy used.i agree with the idea for order to go out when the market will drop as a stone, and that happened mostlyon some fundamental news released. better waiting for next candle to continue our analyse when time comes to put order again.
    what im trying now is to figure out strategy that wont put stop loss far enough tho,but find the best strategy to find most rewarding profit and less stops.

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  7. #16
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    Quit damage aids any dealer to guard his / her money inside investing. This is a application which usually when employed successfully aids any dealer to control the chance connected with Currency trading and also retain that only achievable. They can utilize his / her information to boost his / her making simply by preserving his / her chance and also loss bare minimum.

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  8. #17
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    Quote Originally Posted by sigundul View Post
    its important to set stop loss no matter our strategy used.i agree with the idea for order to go out when the market will drop as a stone, and that happened mostlyon some fundamental news released. better waiting for next candle to continue our analyse when time comes to put order again.
    what im trying now is to figure out strategy that wont put stop loss far enough tho,but find the best strategy to find most rewarding profit and less stops.
    Whenever we enter a trade we take risk in it. There is no limit to the earning or losing potential in Forex. Thus every trade should be done with a proper planning and with adequate measures to control our risk and limit our losses. Stop loss is a great means to manage and control losses.

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  9. #18
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    Quote Originally Posted by PROPENSITY100 View Post
    Whenever we enter a trade we take risk in it. There is no limit to the earning or losing potential in Forex. Thus every trade should be done with a proper planning and with adequate measures to control our risk and limit our losses. Stop loss is a great means to manage and control losses.
    Of course there is no trade without risk. And so we have to be ready for the losing situation when we decide to open a trade. It does not mean that we can do nothing about the losses or we should not, but we should apply risk management techniques among which stop loss is great tool to keep losses in limit.

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  10. #19
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    Forex trading can be no harm and most traders fail because they can not limit the loses dues to always expect the price will turn around again. Get used ti using stop loss or limit losses. I myself prefer to use limit order.

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  11. #20
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    Stop lost is indeed essential to protect our account from big damage, however if we wrongly place the stop then it will turns into disadvantage for us and it become a premature stop lost. It mean, price will be easiely poke or pass through that stop. We need to place stop lost at the reasonable level to prevent a premature stop.

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