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Thread: Stop Loss Only

  1. #1
    Trader rinaji's Avatar
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    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

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    If you lose, be patient. If you win, stay humble

  2. #1281
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    Stop loss based strategy is for our own good, if you cannot trade with this consistently, you might come to a place where you ar going to be battling with depression as a result of the losses you have made over a short period of time, stop loss is not for professional forex traders alone, everyone should know when to apply it and how to use it for trading.

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  3. #1282
    Trader ola4real's Avatar
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    Quote Originally Posted by simisola View Post
    Stop loss based strategy is for our own good, if you cannot trade with this consistently, you might come to a place where you ar going to be battling with depression as a result of the losses you have made over a short period of time, stop loss is not for professional forex traders alone, everyone should know when to apply it and how to use it for trading.
    Yes, the forex traders who are trading the strategies who are using the stop loss are doing that for their own good. Without the use of stop loss in our trading, we will never get to trade correctly, our forex account will be fully exposed to losses. We can get to trade with the stop loss by doing the necessary things who can be of good use to us. We can consider the use of the stop loss in the managerial way too.

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  4. #1283
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    Penuelophir, when we have strong analysis then this is easy to understand how to use sl, because we put sl according to two rules, max how much loss we can afford which can be recoverable or we can set sl where we know this is our daily target for loss and profit, so we can set sl according to our analysis as well just learn and then do it

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  5. #1284
    Trader Toyen's Avatar
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    There is nothing as good as trading with the stop loss, we can not trade the market farther enough when we are not trading with the stop loss. Many traders will say they are good with their strategies and will not trade with stop loss. I do not blame them, they will learn by their folly, that shows the trader is overconfidence with the use of their trading strategies, they will lose as long as their is no perfect trading strategy.

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  6. #1285
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    Quote Originally Posted by ajagbeolegba View Post
    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.
    It is a very important factor in our trading have positive effect for having success , if we are not using any indicator in trade so that will give trader losses we must have to make it sure we develop our trade and through the learning ability and management we easily make our plan very successful which will give trader big opportunity to have positive results .

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  7. #1286
    Trader Senorita's Avatar
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    Stop loss is valuable and if we are real to earn in this market, we must work on managing risk. Stop loss is important and its always the way for us to build a proper management in forex. Loss is important and if we can put in all effort to trade, we will be able to achieve lots of profitable trading. Stop loss is a good one and we should take our time to understand proper risk management which will help us execute a good trade.

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  8. #1287
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    We have to use stoploss in all trade we have plan , because if there is no stop we never stop our losses , it is the best learning for trader to make our trade secure face minimum risk here if we have good development of strategies and plan it will give opportunity to trade it is stoploss only which will make us secure .

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  9. #1288
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    Honestly, there is nothing that would make me to start trading the forex market without first determining where my stop loss is going to be placed and making sure that it is placed in the market because it have been the source of making me feel relaxed and fearless whenever I am still having open trades on. I think the key thing that have lead to huge losses or even blowing out most of the novice forex traders accounts is lack of the use of the stop loss while they have open trades.

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  10. #1289
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    Quote Originally Posted by Senorita View Post
    Stop loss is valuable and if we are real to earn in this market, we must work on managing risk. Stop loss is important and its always the way for us to build a proper management in forex. Loss is important and if we can put in all effort to trade, we will be able to achieve lots of profitable trading. Stop loss is a good one and we should take our time to understand proper risk management which will help us execute a good trade.
    Right there is no question of joking with the stop loss and further what matters is the ability a trader has developed in using the stop loss. Some traders use stop loss but they dont use it with skillful calculations and hence not able to limit their losses with it. But along with the stop loss you should have a strategy so that you know what to trade and also know where to put the stop loss.

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  11. #1290
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    Quote Originally Posted by Penuelophir View Post
    Honestly, there is nothing that would make me to start trading the forex market without first determining where my stop loss is going to be placed and making sure that it is placed in the market because it have been the source of making me feel relaxed and fearless whenever I am still having open trades on. I think the key thing that have lead to huge losses or even blowing out most of the novice forex traders accounts is lack of the use of the stop loss while they have open trades.
    It is very good for trade that we have to determine that where we enter in this market and from where we exit form this market if we do not properly make plan about it so we never get success so it is most important for trader to use the stoploss in trade so we always make secure plan and our trade is not going be stressful .

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