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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. #1341
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    Stop loss trading tools have been the reason why I am here still trading because I would have lost everything in my trading accounts had it been not the frequent use of the stop loss in all my trading activities which is one of the best means of making sure that your trading accounts is well protected and there is no fear of losing everything at once which is what brings emotional trading most times. Please we are not in total control of the forex market whenever we are not willing to start making use of the stop loss at all times.

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  3. #1342
    Trader Toyen's Avatar
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    Quote Originally Posted by Penuelophir View Post
    Stop loss trading tools have been the reason why I am here still trading because I would have lost everything in my trading accounts had it been not the frequent use of the stop loss in all my trading activities which is one of the best means of making sure that your trading accounts is well protected and there is no fear of losing everything at once which is what brings emotional trading most times. Please we are not in total control of the forex market whenever we are not willing to start making use of the stop loss at all times.
    The stop loss is the main security we have in the market. When we are trading without the stop loss, the security of our trading will go down, this could cause us to lose all the money we are trading with. To trade the market with stop loss requires the traders to work on the risk management, that gives us the ability to say we traders are trading securely.

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  4. #1343
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    Stop loss is very much important in forex because with a better management in forex we will have the possibilities to manage risk and improve on the very chance to succeed for good. Stop loss gives us the possibilities of protecting our capital and would however bring about the chance for us to succeed better. If we can manage loss we can have the possible advantage to survive and can always have the possible chance to earn from the market.

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  5. #1344
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    Stop loss is the key means of letting the fear of losing go because there is nothing would make you to lose all your trading capital whenever it is done or set properly at the appropriate levels. For example whenever you are buying then set the stop loss below the support and whenever you are selling then set the stop loss above the resistance level. This is the best way through which you can never lose all your money in one trade and you get the chances of learning more about the forex market and developing a great deal of skills over time.

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  6. #1345
    Trader Toyen's Avatar
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    Quote Originally Posted by Tonycee View Post
    Stop loss is very much important in forex because with a better management in forex we will have the possibilities to manage risk and improve on the very chance to succeed for good. Stop loss gives us the possibilities of protecting our capital and would however bring about the chance for us to succeed better. If we can manage loss we can have the possible advantage to survive and can always have the possible chance to earn from the market.
    The stop loss is what is making us to have the account safety, the account that has no stop loss is the account that can crash at any time. We have to do all within our power to trade rightly, the beginning of the right trading styles is for us to trade with the use of the stop loss. The risk management which the stop loss is working with can not be avoided.

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  7. #1346
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    Without a better use of stoploss a trader must never think about the success , because of the reason that if there is no stoploss our risk is completely open , and due to high movement we may face big losses so all the trader must have to be prepare well to make his ideas for earning handsome amount of money , we must use the a good risk management in all of our trade .

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  8. #1347
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    Quote Originally Posted by learner View Post
    Without a better use of stoploss a trader must never think about the success , because of the reason that if there is no stoploss our risk is completely open , and due to high movement we may face big losses so all the trader must have to be prepare well to make his ideas for earning handsome amount of money , we must use the a good risk management in all of our trade .
    Yes if we can keep a check on our losses then they will be in limits and this allows our profits to outweigh them. Stop loss is an important tool to limit our losses and with it we can rest assured that no matter what, our losses will not be too big. Stop loss has to be used and properly placed based on the analysis we have conducted about the market conditions.

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  9. #1348
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    Learning to make use of stop loss is very necessary basic aspect it's not all about learning to develop a good strategy or skills that we need, we also need to learn how to make use of stop loss and learn to control our emotions properly, this are all important basics aspect we need to get used to before we can trade and succeed in this trade.

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  10. #1349
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    Quote Originally Posted by Toyen View Post
    The stop loss is what is making us to have the account safety, the account that has no stop loss is the account that can crash at any time. We have to do all within our power to trade rightly, the beginning of the right trading styles is for us to trade with the use of the stop loss. The risk management which the stop loss is working with can not be avoided.
    The stop loss will go a long way in helping us, the stop loss is what i believe that traders cannot do without. The traders that will do without the stop loss will get to lose beyond words. To trade with the stop loss requires that we do the best as we trade with the both risk management and the use of the strong trading strategy, that is when the stop loss can work for us as we want it.

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  11. #1350
    Trader ola4real's Avatar
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    Quote Originally Posted by Toyen View Post
    The stop loss is what is making us to have the account safety, the account that has no stop loss is the account that can crash at any time. We have to do all within our power to trade rightly, the beginning of the right trading styles is for us to trade with the use of the stop loss. The risk management which the stop loss is working with can not be avoided.
    I know the power in the trading of the stop loss, the stop loss can let us know what to do in every of our trading in term of the security of the account we are trading. To traded with the stop loss is the best, it will let us lose little and we can gain more with it if we have all what it takes to analyze where best we can be placing the stop loss, we can not use it anyhow.

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