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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. #1361
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    I agree there is no alternate to use stoploss in this market ,if we are using it well so we have control our trade very well, every trader must have to make our plan in accordance with proper money and risk management these will give trader opportunity to build our plan very well to get good results .

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  3. #1362
    Trader ola4real's Avatar
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    Quote Originally Posted by learner View Post
    It is a good strategy for trader to use stoploss in all the trade becasue a trader who do not use stoploss will give us losses , working in market with the best strategies will give trader good results we have to make our plan very well so we get positive trade results it will be the best option to get success .
    Trading with the stop loss will go a long way in working well for us, the stop loss will make our forex account to be secured, we will not be losing more than what we are prepared to lose. The traders with the stop loss needs to work with the solid forex strategy too, if not, the trader can still be frustrated with regular losses if the trader use the stop loss or not.

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  4. #1363
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    It's very much better we understand how to manage our loss and come up with a better way to handle the market. Here stop loss will bring about the best protection of our capital and will therefore see we can handle risk or properly. We must know how to deal with loss and be ready to see we build a profitable system that will take us to winning consistently. Stop loss is for better protection and we must be very ready to manage such risk.

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  5. #1364
    Trader Senorita's Avatar
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    Stop loss is a better way of dealing with risk and it will be for our own advantage we learn to apply stop loss in this business and build a proper means to which we can be able to trade better in this business. Stop loss is helpful and will bring about the opportunity for traders to manage their capital and see they can handle risk. Stop loss is the very way to protect our capital and its going to help us minimize risk as we look into making profits from this market.

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  6. #1365
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    Stop loss is very important option of trading in forex market. It protects our deposit from unexpected losses and good risk and money management can be done with stops. Trading without stop loss is usual mistake among new traders as their money are not protected and they can lose money anytime. Traders should place stops always.

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  7. #1366
    Trader Doge's Avatar
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    This system is more or less a grid. Its levels, however, are way too close to each other. What you need is a minimum distance between trades set and when that condition is fulfilled enter new trade based on some technical setup.
    In grids the main aim is to minimize drawdown - both in price and in time. Swaps pile up very quickly.

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  8. #1367
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    This is the best method of the trading , i cannot use those method that are harmful for the trading . the best method of the trading is the use stop loss technique , we easily earn a lots of money from the forex . the forex trading is just like money making machine .

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  9. #1368
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    The best trading system is the use of stop loss method . when we use the best way to trade ,w e easily earn a lots of money from the forex . the forex trading system is just like money making machine ,we easily earn a lots of money from the forex trading system and earn huge amount from forex .

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  10. #1369
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    The pressure of trading will just be too much if we are trading without a proper risk management, but when we make use of a good risk management we will be so confidence with our trading and we can wait for the market to decide for a long time without any fear because we apply a good risk management in the trade, stop loss is important because it will always help to protect our capital.

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  11. #1370
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    No doubt it is true the risk will open we face stress and very negative emotion in trade so we have to take it serious and use only better trade strategies with the help of risk management it is the only way which will support our trader to make our plan very well and our trading is going to be successful for trade safely .

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