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    Rookie 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. #1111
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    With stop loss being a part of the trades we take, Forex won't be much of a business with so much uncertainty that can wipe our account, we are sure about trading and have confidence about the account we have not getting blown up, stop loss is the best we can do to prevent Forex from dealing with us, if we still don't believe it is necessary, we are hurting ourselves.

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  3. #1112
    Rookie ola4real's Avatar
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    Quote Originally Posted by Leonvic View Post
    With stop loss being a part of the trades we take, Forex won't be much of a business with so much uncertainty that can wipe our account, we are sure about trading and have confidence about the account we have not getting blown up, stop loss is the best we can do to prevent Forex from dealing with us, if we still don't believe it is necessary, we are hurting ourselves.
    The stop loss is a very good idea for forex traders, that is what i know that will not let traders to lose too much. Not trading with the stop loss is the worst part of it all, we can get to trade the forex field and lose all our forex investments, that is what matters here. Forex traders who can use stop loss have to plans it well, that is what will effectively prevent the account of the trader from much loss.

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  4. #1113
    Rookie Toyen's Avatar
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    Quote Originally Posted by ola4real View Post
    The stop loss is a very good idea for forex traders, that is what i know that will not let traders to lose too much. Not trading with the stop loss is the worst part of it all, we can get to trade the forex field and lose all our forex investments, that is what matters here. Forex traders who can use stop loss have to plans it well, that is what will effectively prevent the account of the trader from much loss.
    I always tell traders that they can not go far in the trading of this market without the use of stop loss. The stop loss is a crucial tool in the trading of the market, it will not let traders lose more than what they can cope with. One thing with the stop loss is that it will make sure that it preserves our trading investments by making sure that we know the exact amount we can lose even before we trade at all.

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  5. #1114
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    honestly is the best policy , when we become good traders and earn some money working with honestly then we stop our loss by using some main technique .we can win more then loss by using the best strategy of the trading . risky management reward huge money then the other way of trading.

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  6. #1115
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    I have lost so many trading accounts in the past because I failed to make use of the stop loss due to the fact that I was afraid of losing money but at the end of the whole show I would end up losing everything in my trading accounts because I failed to make sure that my trading account is well protected. Stop loss set at the appropriate levels is the best means of making sure that your trading account is always safe and most importantly you shall always have stress free trading experiences all the times.

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  7. #1116
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    Quote Originally Posted by Penuelophir View Post
    I have lost so many trading accounts in the past because I failed to make use of the stop loss due to the fact that I was afraid of losing money but at the end of the whole show I would end up losing everything in my trading accounts
    i also lost a lot of accounts because of same issues, actually when we trade without stop loss we can lose more, because when we do stop loss we can accept some loss, so when we accept some loss its easy to recover but when we are not accepting some loss we can lose all in no time, i have done this mistake a lot of time, so make sure you do not repeat this mistake, still i am losing because of this

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