Stop Loss Only - Page 128

1. ## Stop Loss Only

Hello all my fellow, this time I want to build a strategy, it is purely on the basis of the inspiration that I got from a content thread created by Value trader. But I forgot which thread is.

I take an example: we made ​​10 trades, if 9 trades is ending with loss, Are impossible for us to change it into profit? As far as we still have a chance, we can still change the situation into profit. It is depends on our method in managing risk. If we put a stop loss 10 pips/ each trades, and take protit 100 pips. So the end result is, total loss + Total Profit = (9 * -10) + (1 * 100) = 10 pips profit.

Compare the contrary, for example, we are a scalper, we take profit of 10 pips for each trade, and put a 100 pips stop loss. If we get 9 win trades of 10 transactions. Then the end of the results is: (1*-100) + (9*10) = -10 pips (loss).

This is evidence that a high level of accuracy in the analysis is not a guarantee for profitable if we can not manage risk properly, in other words, is not able to set the ratio of risk: reward properly. 90% accuracy in analysis isn't mean profitable, and 10% accuracy in analysis isn't mean unprofitable.

Okay, that is a simple logic of the system that I will build.

Even so, I will start from zero, I will do a backtest for a few months back, or more than a year back, and then I will do a forward test.
For a back test, I would not use the analysis at all, I just want to know the worst of this system, I just rely on the game of risk: reward ratio.
Of course I would compare of 5 methods. So I will know which one is best, and what weaknesses and strengths of this system.

It is my plan to build this system:
1. Doing backtest in EUR/USD, GBP/USD, AUD/USD, NZD/USD, USD/JPY, USD/CHF, USD/CAD, and EUR/JPY.
I would compare 5 methods of risk: reward ratio:
- Stop Loss 25 pips : Take Profit unset. or trade using stop loss only, no take profit. But close all profit positions in the last week or last month.(My system)
- Stop Loss unset : Take Profit 25 pips. or trade using take profit only, no stop loss, But close all loss positions in the last week or last month.
- Stop Loss 25 pips : Take Profit 25 pips. or trade with 1:1 Risk Reward ratio
- Stop Loss 25 pips : Take Profit 50 pips. or trade with 1:2 Risk Reward ratio
- Stop Loss 50 pips : Take profit 25 pips. or trade with 2:1 RIsk Reward ratio.
In the back test, I would just use grid trading, (using robots), so I'm not going to use market analysis.
I use buy stop and sell stop orders, the distance of each order is 25 pips. I do not use order limit, just order stop. And the distance of the nearest pending order to the current price is 25 pips. And will always add new pending order if the price move 25 pips or more.
Just see the picture...

2. Doing forward test. Here I will determine the appropriate analysis strategies, and then do some testing, maybe I can change the method of analysis if I am still getting unsatisfactory results. Then If I've got a good and profitable system, then I will make a thread for this system, this is my journey in building strategy. A system with use stop loss only.

Thank you

2. Originally Posted by ajagbeolegba
The management of our investment as traders is the good side of the market trading, we need to focus more on how we can better our trading by working more on the account preservations, that is where the use of stop loss is very important. Traders should be particular about the best ways they can use the stop loss as well, there is no account safety when it is used wrongly.
The management is not what traders could do without, the management is powerful and it is the way to safeguard the account of various traders. It is when we do not have the necessary experience that we will be losing, but when traders get to be trading with the right experience, the trader will get to be making their earnings.

3. I do what is obtainable to manage loss and its the right way for me to see that I can handle my risk much people. Stop loss have been the right way to manage our capital which is so good to avoid risking more than what we can possibly afford. If we apply stop loss it will help curb emotions and will give us a sense of relaxation knowing fully well that our capital is well protected.

4. Originally Posted by Senorita
I do what is obtainable to manage loss and its the right way for me to see that I can handle my risk much people. Stop loss have been the right way to manage our capital which is so good to avoid risking more than what we can possibly afford. If we apply stop loss it will help curb emotions and will give us a sense of relaxation knowing fully well that our capital is well protected.
stop loss can really good and can help us to manage our loss but still we can lose if we are not doing right analysis then it can happen our mostly orders hit and sl and less hit tp, so we can do better trade if we have good proper learning and have some good targets, management can be good for us because when we use management we really make good skills here

5. Originally Posted by ajagbeolegba
The management of our investment as traders is the good side of the market trading, we need to focus more on how we can better our trading by working more on the account preservations, that is where the use of stop loss is very important. Traders should be particular about the best ways they can use the stop loss as well, there is no account safety when it is used wrongly.
It will be good for forex traders to manage their investments, it is what i know that gives traders the success they need in their trading. I like the fact that many forex traders are doing well, and i think that it is through some proper trading plans like the use of stop loss that is causing the trader to do well. It is never by what the trader knows of his forex strategy only, the forex strategy can not plans account management for us.

6. Originally Posted by ola4real
It will be good for forex traders to manage their investments, it is what i know that gives traders the success they need in their trading. I like the fact that many forex traders are doing well, and i think that it is through some proper trading plans like the use of stop loss that is causing the trader to do well. It is never by what the trader knows of his forex strategy only, the forex strategy can not plans account management for us.
It is a good thing that we manage our investment, that makes us to be a good trader. To trade the market is not so simple, we can get to lose at time, and the management will not let us to be losing easily. To manage our trading account needs us to work on the use of the stop loss rightly, that is what i know that can let us gain as we like and get to be having protection for the account.

7. Originally Posted by ajagbeolegba
It is a good thing that we manage our investment, that makes us to be a good trader. To trade the market is not so simple, we can get to lose at time, and the management will not let us to be losing easily. To manage our trading account needs us to work on the use of the stop loss rightly, that is what i know that can let us gain as we like and get to be having protection for the account.
if we do not manage then loss will be our and this is reality i know and accept it as well, make sure you have good skills make sure you know how much loss you can afford because most of time we people use stop loss but very big or small so its still not good, we need to know all required factors then we can earn and can do something well, stop loss can really make us able to earn here if we have good skills to use it

8. Originally Posted by naeem555
if we do not manage then loss will be our and this is reality i know and accept it as well, make sure you have good skills make sure you know how much loss you can afford because most of time we people use stop loss but very big or small so its still not good, we need to know all required factors then we can earn and can do something well, stop loss can really make us able to earn here if we have good skills to use it
There is no success for traders that are not trading with the stop loss, the stop loss is there to always manage the trading account of every trader. We can use the stop loss and get to be more successful when our trading account is not lost for a long period of time. This is the reason for the use of stop loss and we will have to get fully ready for it. We can trade correctly by limiting our trading risk in the like manner.

9. Originally Posted by naeem555
if we do not manage then loss will be our and this is reality i know and accept it as well, make sure you have good skills make sure you know how much loss you can afford because most of time we people use stop loss but very big or small so its still not good, we need to know all required factors then we can earn and can do something well, stop loss can really make us able to earn here if we have good skills to use it
It is wrong for traders to be trading this dangerous market and will not be creative about the way they will be managing their trading account, such trader will only be losing. To trade the market needs traders to work on the proper use of stop loss, when the stop loss is well used by traders, the account will never be at risk, and the trader could subsequently manage their trading account better.

10. Stop loss is a very better way to manage risk and if we are very serious about making money from this market, we should do everything to work on our very management in this business and see we don't loose in the wrong means. Stop loss will continue to be a great chance to manage our risk and we should be well ready to see we don't get to loose up our investment in the wrong manner by trading without stop loss.

11. Learning how to make use of the stop loss have always been one of the greatest assets we have as good professional forex traders and it is one sure way to remain in total control of your open trades and make sure that you never lose anything beyond what you are supposed to lose in each trades. One thing is to start making use of the stop loss trading tools but another thing is to make sure that you are using it the right way due to the fact that it would make you beocme secured due to the fact that the market will not be hitting you off the market most times.

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