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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. #1251
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    Penuelophir, when we do not use stop loss we can lose simply, stop loss is really important because if we use stop loss we can set limit and can avoid big loss as well, main thing is our successful strategy and its step by step process, if we give it time and attention we can make experience and can earn as well, stop loss is only thing which can save us from losing big

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  3. #1252
    Trader Senorita's Avatar
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    I believe if we can do everything it takes to manage loss, we can increase our chances to earn here and we can be able to seek on the chance to protect our capital. Loss management is very important for every trader because if we can deal with loss, we will be opportune to trade better and look into managing our risk. Stop loss will always be the best thing here and our very management in forex is likely to help us maintain a successful trade.

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  4. #1253
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    Quote Originally Posted by Senorita View Post
    I believe if we can do everything it takes to manage loss, we can increase our chances to earn here and we can be able to seek on the chance to protect our capital. Loss management is very important for every trader because if we can deal with loss, we will be opportune to trade better and look into managing our risk. Stop loss will always be the best thing here and our very management in forex is likely to help us maintain a successful 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 has to be used and properly placed based on the analysis we have conducted about the market conditions. Analysis has to be given all the needed time because that is going to dictate how strong our trades can be.

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  5. #1254
    Trader Sixteen's Avatar
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    Stop loss is a very great means to manage our capital in forex and we should directly plan on the possible means to manage risk. Stop loss would help us to maximize winning and we should be highly ready to see we can manage up this loss in the best way that matters. Stop loss would give us all the opportunity here in this market to protect our funds trade and its for our own good we stick to the means to manage loss.

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  6. #1255
    Trader ola4real's Avatar
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    Quote Originally Posted by Toyen View Post
    The stop loss is a good tool to be used in the market at all time, i like it so well. The use of the stop loss is what is keeping the account of many traders safe, if there is no use of stop loss, i am sure that traders will never get to make their earnings, not to talk of being successful in the market. I like to use the stop loss for many reasons, and i make sure that i work with the stop loss to create the best risk management.
    The use of stop loss is so good, the stop loss is what can make traders not to lose all their forex income so easily. The forex traders who are using the stop loss knows how to work in the forex field and get to make their income and make their forex account to be protected. Because the protective part is the main reason in whom forex traders are using the stop loss to trade.

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  7. #1256
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    Quote Originally Posted by Toyen View Post
    The stop loss is a good tool to be used in the market at all time, i like it so well. The use of the stop loss is what is keeping the account of many traders safe, if there is no use of stop loss, i am sure that traders will never get to make their earnings, not to talk of being successful in the market. I like to use the stop loss for many reasons, and i make sure that i work with the stop loss to create the best risk management.
    You are right, the stop loss is a very important aspect of trading which traders should not overlook. Those traders that are looking down on the use of stop loss are not doing well in the end. They will think that they can do better with the trading of their strategies alone, they are always wrong and they are losing more due to that. Trading needs planning, there is no good plan when the management is lacking in it.

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  8. #1257
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    Quote Originally Posted by ajagbeolegba View Post
    You are right, the stop loss is a very important aspect of trading which traders should not overlook. Those traders that are looking down on the use of stop loss are not doing well in the end. They will think that they can do better with the trading of their strategies alone, they are always wrong and they are losing more due to that. Trading needs planning, there is no good plan when the management is lacking in it.
    I used stoploss as an important way to protect your account if we have enough learning and practice on demo account so we get understand that how we use our sense to make our trade plan successful we need basic learning and we need a practice specially about the risk management and better use of stoploss .

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  9. #1258
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    There are so many ways through which we can start minimizing the rate of losses and even protect our trading accounts from being wiped out over night but the greatest is knowing and understanding how to make use of the stop loss at all times, because it does not only protect your trading account for you but it gives you rest of mind to know that you are not going to lose all your trading accounts in just one trade. It is very important that we always make use of it if we are going to make it here.

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  10. #1259
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    Stop loss will always be the better version of management in forex. Our stop loss is the best way to protect our capital and its for our own good we understand this and have a plan to sure see we can succeed. Stop loss brings up the chance for us to manage risk and we can have the opportunity to work on the best means of profits. Loss should highly managed and we should do everything it would take to see that risk can be well managed.

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  11. #1260
    Trader Toyen's Avatar
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    Quote Originally Posted by ajagbeolegba View Post
    You are right, the stop loss is a very important aspect of trading which traders should not overlook. Those traders that are looking down on the use of stop loss are not doing well in the end. They will think that they can do better with the trading of their strategies alone, they are always wrong and they are losing more due to that. Trading needs planning, there is no good plan when the management is lacking in it.
    The stop loss is just the working tool that is crucial for our trading, the traders that will not be using the stop loss will not get to trade rightly. To trade with the stop loss needs us to have the crucial plans with it, we need to use the support and resistance points to place the stop loss. In this case, the use of the trendline and Fibonacci strategy could do this work for the trader.

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