Stop Loss

It is better you take a loss earlier than let your broker close your trade. Sometime its hard to take a loss and recover it but this is the only thing that can make you stay run. If you keep loss till your account wipe, then, change the strategy.

Mohammadi posted:
Stop loss is very much important tool; but I don’t have any fixed number with this tool. In my live trading, I always set my SL based on the distance between support & resistant levels.

Hi, sure its atleast 1:1

togr posted:
Setting stop loss is common way to protect your account from losses.
Wrong usage like too tight stop losses leads indeed to losses on your account.
There are other more sophisticated ways to protect your equity, of course the ones I am using :)

You're a very experienced trader, people could learn a lot if they paid attention to you.

Absolutely you are correct. There are other ways of protecting the account.

And when properly used, they work very well.

The trouble is that most new traders wouldn't understand how to properly handle those kinds of counter coverage trades and properly size lot size calculations for it. :)

Mohammadi posted:
Stop loss is very much important tool; but I don’t have any fixed number with this tool. In my live trading, I always set my SL based on the distance between support & resistant levels.

Stop loss doesn't have to be used at all once trading with a proper account balance and lot size ratio

The market for certain trading pairs (ranging pairs) only moves a maximum of a certain amount of pips every day, so taking your balance and lot size into consideration you know that the market will eventually turn around to hit previous supports and resistances eventually.

aa33030 posted:

Mohammadi posted:
Stop loss is very much important tool; but I don’t have any fixed number with this tool. In my live trading, I always set my SL based on the distance between support & resistant levels.

Stop loss doesn't have to be used at all once trading with a proper account balance and lot size ratio

The market for certain trading pairs (ranging pairs) only moves a maximum of a certain amount of pips every day, so taking your balance and lot size into consideration you know that the market will eventually turn around to hit previous supports and resistances eventually.

For demo account, not useful at all, but if real, then it most and must have a stop loss. Just google black swan bro, maybe can put some knowledge into your fx trading journey.

Professional4X posted:

togr posted:
Setting stop loss is common way to protect your account from losses.
Wrong usage like too tight stop losses leads indeed to losses on your account.
There are other more sophisticated ways to protect your equity, of course the ones I am using :)

You're a very experienced trader, people could learn a lot if they paid attention to you.

Absolutely you are correct. There are other ways of protecting the account.

And when properly used, they work very well.

The trouble is that most new traders wouldn't understand how to properly handle those kinds of counter coverage trades and properly size lot size calculations for it. :)

Yeah. There are no common courses explaining that ;)
Let me expand it a bit. What would you expect from common course of forex trading?
The answer is common results.
What are common results?
95% of traders are loosing.

So IMHO it is better to find out what suits YOU best.
Because YOU are the one trading YOUR money.
YOO are the one trading consequences - be it life without daily job or lief full of losses.

But I am afraid majority of people is too simple to understand and follow me :)

I couldn't agree more. Stop Loss is very important tool that really help most of us to avoid the potential risky loss while trading. But having a fixed SL is not a wise choice. Just set it according to the pair's movement along with risk study.

fancydandy posted:
I couldn't agree more. Stop Loss is very important tool that really help most of us to avoid the potential risky loss while trading. But having a fixed SL is not a wise choice. Just set it according to the pair's movement along with risk study.

No doubt on it; trading without SL means using unlimited risk reward ratio; it’s too much dangerous for sure!

@fancydandy maybe you should show your live account first. I have fixed SL and variable TP, and so far I can make money from it.

RichPort posted:
But what if you use a lot size of say 0.1 Lot and the stop loss is like 50 pips? Do you take that or wait for another trade? I worry about risk reward and drawdown with big stop loss

In my opinion, if you have a trade that is moving -50 pips against your account you should reconsider ways to increase your accuracy for entry. Also, if you are trading 0.1 lot sizes, why not open with a smaller trade size and then step into your basket as the profitability of your trade increases every few pips. By doing it that way, you have a low initial market exposure in case it is moving against your basket, and then as it starts to come back towards your previously calculated entry point, you can start stepping additional trades into your basket until you reach the aggregate lot value of 0.1 in your basket.

Currently you are entering like this:

EUR_USD BUY 0.1 @ 1.00000 (entry as indicated by your strategy)

Where as if you did it this way:
EUR_USD BUY 0.01 @ 1.0000 (entry as indicated by your strategy, but with a much small initial lot size)

Then once it moves towards the profitable direction create a new trade every few pips, using the previous ticket profit for coverage taking into account the spread value as well.

So instead of:
EUR_USD BUY 0.1 @ 1.0000

You would might have
EUR_USD BUY 0.01 @ 1.0000 *total of 0.01 in basket
EUR_USD BUY 0.02 @ 1.0010 *total of 0.03 in basket
EUR_USD BUY 0.03 @ 1.0020 *total of 0.06 in basket
EUR_USD BUY 0.04 @ 1.0030 *total of 0.10 in basket (This is your previously used trade size, but with much reduced risk)

This way, your entries are all created in the direction of movement (short term trend), while providing better risk management than opening a larger trade all at once.

You could also set the previous ticket SL to break even on each ticket as your next ticket is triggered for entry, this too provides an overall guarantee of asset protection against your account because your SL on each ticket has a break even guarantee stoploss level.
Then once your last ticket (0.04) has moved into profit, move ALL the SL on that set of tickets to the break even price level of the 0.04 ticket plus a couple of extra pips to cover any additional swap or commissions or whatever you might encounter.

Without proper risk management, your investment capital isn't protected against loss.

Also, if you do close out your initial 0.01 entry ticket at a loss, it's not that big of a deal because it's 1/10th the size of your normal entry trade size of 0.10

It is ALWAYS better to take a small loss instead of a LARGE ONE.

Risk management should ALWAYS be the number one priority for any investor.

Of course this is all just my own personal opinion and is just how I personally trade.

It's one of several methods that I use to provide stronger risk management while also providing for a lower initial market exposure on entry for each trade, and it provides a guaranteed coverage for each additional trade opened, using the previous trades profit levels for each additional trade I step into my order basket.

generally after having a losses from trade we become emotional and trade over and over , we lost our motive and mind , as a result become loser. its more appropriate to become cool when having a loss and stop trading for a while.

Mohammadi posted:
 generally after having a losses from trade we become emotional and trade over and over , we lost our motive and mind , as a result become loser. its more appropriate to become cool when having a loss and stop trading for a while.

When you are trading with a long term plan; then surely you’ll not lose your concentration because of 1 or 2 SLs.

aa33030 posted:

Mohammadi posted:
Stop loss is very much important tool; but I don’t have any fixed number with this tool. In my live trading, I always set my SL based on the distance between support & resistant levels.

Stop loss doesn't have to be used at all once trading with a proper account balance and lot size ratio

The market for certain trading pairs (ranging pairs) only moves a maximum of a certain amount of pips every day, so taking your balance and lot size into consideration you know that the market will eventually turn around to hit previous supports and resistances eventually.

That is not true,
there are events like swiss peg removal or Trump election which moves market much more than ever.

Professional4X posted:

RichPort posted:
But what if you use a lot size of say 0.1 Lot and the stop loss is like 50 pips? Do you take that or wait for another trade? I worry about risk reward and drawdown with big stop loss

In my opinion, if you have a trade that is moving -50 pips against your account you should reconsider ways to increase your accuracy for entry. Also, if you are trading 0.1 lot sizes, why not open with a smaller trade size and then step into your basket as the profitability of your trade increases every few pips. By doing it that way, you have a low initial market exposure in case it is moving against your basket, and then as it starts to come back towards your previously calculated entry point, you can start stepping additional trades into your basket until you reach the aggregate lot value of 0.1 in your basket.

Currently you are entering like this:

EUR_USD BUY 0.1 @ 1.00000 (entry as indicated by your strategy)

Where as if you did it this way:
EUR_USD BUY 0.01 @ 1.0000 (entry as indicated by your strategy, but with a much small initial lot size)

Then once it moves towards the profitable direction create a new trade every few pips, using the previous ticket profit for coverage taking into account the spread value as well.

So instead of:
EUR_USD BUY 0.1 @ 1.0000

You would might have
EUR_USD BUY 0.01 @ 1.0000 *total of 0.01 in basket
EUR_USD BUY 0.02 @ 1.0010 *total of 0.03 in basket
EUR_USD BUY 0.03 @ 1.0020 *total of 0.06 in basket
EUR_USD BUY 0.04 @ 1.0030 *total of 0.10 in basket (This is your previously used trade size, but with much reduced risk)

This way, your entries are all created in the direction of movement (short term trend), while providing better risk management than opening a larger trade all at once.

You could also set the previous ticket SL to break even on each ticket as your next ticket is triggered for entry, this too provides an overall guarantee of asset protection against your account because your SL on each ticket has a break even guarantee stoploss level.
Then once your last ticket (0.04) has moved into profit, move ALL the SL on that set of tickets to the break even price level of the 0.04 ticket plus a couple of extra pips to cover any additional swap or commissions or whatever you might encounter.

Without proper risk management, your investment capital isn't protected against loss.

Also, if you do close out your initial 0.01 entry ticket at a loss, it's not that big of a deal because it's 1/10th the size of your normal entry trade size of 0.10

It is ALWAYS better to take a small loss instead of a LARGE ONE.

Risk management should ALWAYS be the number one priority for any investor.

Of course this is all just my own personal opinion and is just how I personally trade.

It's one of several methods that I use to provide stronger risk management while also providing for a lower initial market exposure on entry for each trade, and it provides a guaranteed coverage for each additional trade opened, using the previous trades profit levels for each additional trade I step into my order basket.

Yeah. I like basket trading. It works. It is best performed by EA. I am afraid simple manual traders here will not understand your point or lack the discipline to do it properly...

togr posted:

Professional4X posted:

RichPort posted:
But what if you use a lot size of say 0.1 Lot and the stop loss is like 50 pips? Do you take that or wait for another trade? I worry about risk reward and drawdown with big stop loss

In my opinion, if you have a trade that is moving -50 pips against your account you should reconsider ways to increase your accuracy for entry. Also, if you are trading 0.1 lot sizes, why not open with a smaller trade size and then step into your basket as the profitability of your trade increases every few pips. By doing it that way, you have a low initial market exposure in case it is moving against your basket, and then as it starts to come back towards your previously calculated entry point, you can start stepping additional trades into your basket until you reach the aggregate lot value of 0.1 in your basket.

Currently you are entering like this:

EUR_USD BUY 0.1 @ 1.00000 (entry as indicated by your strategy)

Where as if you did it this way:
EUR_USD BUY 0.01 @ 1.0000 (entry as indicated by your strategy, but with a much small initial lot size)

Then once it moves towards the profitable direction create a new trade every few pips, using the previous ticket profit for coverage taking into account the spread value as well.

So instead of:
EUR_USD BUY 0.1 @ 1.0000

You would might have
EUR_USD BUY 0.01 @ 1.0000 *total of 0.01 in basket
EUR_USD BUY 0.02 @ 1.0010 *total of 0.03 in basket
EUR_USD BUY 0.03 @ 1.0020 *total of 0.06 in basket
EUR_USD BUY 0.04 @ 1.0030 *total of 0.10 in basket (This is your previously used trade size, but with much reduced risk)

This way, your entries are all created in the direction of movement (short term trend), while providing better risk management than opening a larger trade all at once.

You could also set the previous ticket SL to break even on each ticket as your next ticket is triggered for entry, this too provides an overall guarantee of asset protection against your account because your SL on each ticket has a break even guarantee stoploss level.
Then once your last ticket (0.04) has moved into profit, move ALL the SL on that set of tickets to the break even price level of the 0.04 ticket plus a couple of extra pips to cover any additional swap or commissions or whatever you might encounter.

Without proper risk management, your investment capital isn't protected against loss.

Also, if you do close out your initial 0.01 entry ticket at a loss, it's not that big of a deal because it's 1/10th the size of your normal entry trade size of 0.10

It is ALWAYS better to take a small loss instead of a LARGE ONE.

Risk management should ALWAYS be the number one priority for any investor.

Of course this is all just my own personal opinion and is just how I personally trade.

It's one of several methods that I use to provide stronger risk management while also providing for a lower initial market exposure on entry for each trade, and it provides a guaranteed coverage for each additional trade opened, using the previous trades profit levels for each additional trade I step into my order basket.

Yeah. I like basket trading. It works. It is best performed by EA. I am afraid simple manual traders here will not understand your point or lack the discipline to do it properly...

Buddy; what is basket trading? Would you please elaborate?

Adribaasmet posted:

togr posted:

Professional4X posted:

RichPort posted:
But what if you use a lot size of say 0.1 Lot and the stop loss is like 50 pips? Do you take that or wait for another trade? I worry about risk reward and drawdown with big stop loss

In my opinion, if you have a trade that is moving -50 pips against your account you should reconsider ways to increase your accuracy for entry. Also, if you are trading 0.1 lot sizes, why not open with a smaller trade size and then step into your basket as the profitability of your trade increases every few pips. By doing it that way, you have a low initial market exposure in case it is moving against your basket, and then as it starts to come back towards your previously calculated entry point, you can start stepping additional trades into your basket until you reach the aggregate lot value of 0.1 in your basket.

Currently you are entering like this:

EUR_USD BUY 0.1 @ 1.00000 (entry as indicated by your strategy)

Where as if you did it this way:
EUR_USD BUY 0.01 @ 1.0000 (entry as indicated by your strategy, but with a much small initial lot size)

Then once it moves towards the profitable direction create a new trade every few pips, using the previous ticket profit for coverage taking into account the spread value as well.

So instead of:
EUR_USD BUY 0.1 @ 1.0000

You would might have
EUR_USD BUY 0.01 @ 1.0000 *total of 0.01 in basket
EUR_USD BUY 0.02 @ 1.0010 *total of 0.03 in basket
EUR_USD BUY 0.03 @ 1.0020 *total of 0.06 in basket
EUR_USD BUY 0.04 @ 1.0030 *total of 0.10 in basket (This is your previously used trade size, but with much reduced risk)

This way, your entries are all created in the direction of movement (short term trend), while providing better risk management than opening a larger trade all at once.

You could also set the previous ticket SL to break even on each ticket as your next ticket is triggered for entry, this too provides an overall guarantee of asset protection against your account because your SL on each ticket has a break even guarantee stoploss level.
Then once your last ticket (0.04) has moved into profit, move ALL the SL on that set of tickets to the break even price level of the 0.04 ticket plus a couple of extra pips to cover any additional swap or commissions or whatever you might encounter.

Without proper risk management, your investment capital isn't protected against loss.

Also, if you do close out your initial 0.01 entry ticket at a loss, it's not that big of a deal because it's 1/10th the size of your normal entry trade size of 0.10

It is ALWAYS better to take a small loss instead of a LARGE ONE.

Risk management should ALWAYS be the number one priority for any investor.

Of course this is all just my own personal opinion and is just how I personally trade.

It's one of several methods that I use to provide stronger risk management while also providing for a lower initial market exposure on entry for each trade, and it provides a guaranteed coverage for each additional trade opened, using the previous trades profit levels for each additional trade I step into my order basket.

Yeah. I like basket trading. It works. It is best performed by EA. I am afraid simple manual traders here will not understand your point or lack the discipline to do it properly...

Buddy; what is basket trading? Would you please elaborate?

I gave a detailed example of basket trading and how to greatly reduce the risk and overall exposure of the investment capital.

Which part is unclear?

Buddy; where is your example? In this thread? Or you already have a thread on this topic?

Adribaasmet posted:
Buddy; where is your example? In this thread? Or you already have a thread on this topic?

EXAMPLE OF BASKET TRADING:

In my opinion, if you have a trade that is moving -50 pips against your account you should reconsider ways to increase your accuracy for entry. Also, if you are trading 0.1 lot sizes, why not open with a smaller trade size and then step into your basket as the profitability of your trade increases every few pips. By doing it that way, you have a low initial market exposure in case it is moving against your basket, and then as it starts to come back towards your previously calculated entry point, you can start stepping additional trades into your basket until you reach the aggregate lot value of 0.1 in your basket.

Currently you are entering like this:

EUR_USD BUY 0.1 @ 1.00000 (entry as indicated by your strategy)

Where as if you did it this way:
EUR_USD BUY 0.01 @ 1.0000 (entry as indicated by your strategy, but with a much small initial lot size)

Then once it moves towards the profitable direction create a new trade every few pips, using the previous ticket profit for coverage taking into account the spread value as well.

So instead of:
EUR_USD BUY 0.1 @ 1.0000

You would might have
EUR_USD BUY 0.01 @ 1.0000 *total of 0.01 in basket
EUR_USD BUY 0.02 @ 1.0010 *total of 0.03 in basket
EUR_USD BUY 0.03 @ 1.0020 *total of 0.06 in basket
EUR_USD BUY 0.04 @ 1.0030 *total of 0.10 in basket (This is your previously used trade size, but with much reduced risk)

This way, your entries are all created in the direction of movement (short term trend), while providing better risk management than opening a larger trade all at once.

You could also set the previous ticket SL to break even on each ticket as your next ticket is triggered for entry, this too provides an overall guarantee of asset protection against your account because your SL on each ticket has a break even guarantee stoploss level.
Then once your last ticket (0.04) has moved into profit, move ALL the SL on that set of tickets to the break even price level of the 0.04 ticket plus a couple of extra pips to cover any additional swap or commissions or whatever you might encounter.

Without proper risk management, your investment capital isn't protected against loss.

Also, if you do close out your initial 0.01 entry ticket at a loss, it's not that big of a deal because it's 1/10th the size of your normal entry trade size of 0.10

It is ALWAYS better to take a small loss instead of a LARGE ONE.

Risk management should ALWAYS be the number one priority for any investor.

Of course this is all just my own personal opinion and is just how I personally trade.

It's one of several methods that I use to provide stronger risk management while also providing for a lower initial market exposure on entry for each trade, and it provides a guaranteed coverage for each additional trade opened, using the previous trades profit levels for each additional trade I step into my order basket.

Using the above example, the trader is trading with a total of 0.10 lots, they had a concern that when the trade was -50 pips that the loss was large enough to be concerned about it.

Using a step in, basket trading method, we reduce the overall initial exposure to the markets by 90%, then as each successive ticket is generated, it is using the previously opened ticket for coverage due to having a profitability on those previous tickets which has been locked in via the stoploss and breakeven analysis for each of those tickets.

Once the initial ticket has been opened and has triggered the breakeven level stoploss plus a pip or so to cover commissions and spread, there is no longer any need to worry about that ticket, so we enter the next step in order into the basket, keep doing those over again until you have total of 4 tickets in your basket, using the aggregate value of those tickets to determine your profit of the basket.

Which part is unclear? Please ask specific questions and I will give specific answers.

 

Loss is an inevitable part of trading there is nobody who can avoid it completely; mostly loss occurs due to lack of exact money management plan as well non-skill trading knowledge. So, for avoiding loss we have to focus on there.