Stop loss dilemma -- to use SL or not to use SL, it's a problem
- Thread starter wqking
- Start date
I started in the days of min $2000 account, but fxcm 50:1 margin trader, dropped it from 200:1 to easy to put a dent in the account.
Seems to be a few stock traders around maybe, old school, never again takes over your life to much for my liking all the research and stock screens to find the next days plays. 3 years of that drove me mad i swear lol
Scalp when i get the chance and see something i like is my style these days.
You can get by without using SL if trading stocks and then committing at most 3% of your total portfolio on single security. Even if that position is wiped off you have lost 3% maximum unless playing short trade.
In futures or margin play, SL is the way to go. I have blown up one account by sitting on the loser position until the margin call came and was forced to close it.
In futures or margin play, SL is the way to go. I have blown up one account by sitting on the loser position until the margin call came and was forced to close it.
Too many positions to monitor then, 5 is about right if you stay away from penny high risk crap.
2/3rds direction of market trend in same direction sector, remaining counter trend is opposite direction sector.
That's how i used to play it, counter trend days looks say give back a little shorts make a lot and vice versa.
Some cover for extreme market change aswell.
Still never going back to stocks lol
BTW one important thing to remember about being stopped out is that it doesn't mean that one is just done and they lost and that's it. It means they stopped the bleeding from getting worse.
If a reversal happens there's absolutely nothing preventing reentry at that point that not only successfully recovers the first trade loss but makes a profit.
Its of course important to not make the second trade about recovering the losses of the first but to just understand that maybe the first trade was too early (I'm chronically too early at times) and they need to be more patient. If it never does reverse well then the premise was just wrong and that stop loss saved your ass.
If a reversal happens there's absolutely nothing preventing reentry at that point that not only successfully recovers the first trade loss but makes a profit.
Its of course important to not make the second trade about recovering the losses of the first but to just understand that maybe the first trade was too early (I'm chronically too early at times) and they need to be more patient. If it never does reverse well then the premise was just wrong and that stop loss saved your ass.
I trade Forex and Index CFDs with Oanda, 50:1 leverage.
I'm not new generation ET nor am I 18 years old (I'm much much older than that).
I use 50:1 leverage for Forex, it's quite decent for Forex, not any ridiculous.
With 1:1 margin and trading Stocks, it may still be gambling. Whether gambling or "investing" or speculating depends on the mindset or psychology, not depends on margin level or whether using SL.
BTW, I'm asking about opinion on SL vs no-SL, but I don't think no-SL is just gambling. With SL one can still be gambling.
As I keep saying, without a Entry and Exit method which works, then not using a SL is a fix for this.
Without knowing when to Entry then Exit you'll constantly hit SL's, Enter too soon and SL hit, Exit to late and yes it'll get to your SL.
No SL removes this issue, but even at 50:1 leverage, a big move will move against you and wipe you out.
So logically, you need to use SL's but need entry and exit method nailed down.
Stocks wise, if you stick to MSFT and the like, they'll generally always get back to a profit sooner or much much much later so could argue no SL better there. But holding a positions for months to take a small profit, is never going to make you a wage, depends on what your after I guess.
Without knowing when to Entry then Exit you'll constantly hit SL's, Enter too soon and SL hit, Exit to late and yes it'll get to your SL.
No SL removes this issue, but even at 50:1 leverage, a big move will move against you and wipe you out.
So logically, you need to use SL's but need entry and exit method nailed down.
Stocks wise, if you stick to MSFT and the like, they'll generally always get back to a profit sooner or much much much later so could argue no SL better there. But holding a positions for months to take a small profit, is never going to make you a wage, depends on what your after I guess.
I already answer your question in my previous post
I am referring to anyone "new" to trading, not age. For example, someone attend some BS course and been told to trade looking at chart, S/R, chart pattern, setup trade with risk/reward < 0 without knowing the probability, set SL (lol)
Any margin beyond 1:1 ratio is the leverage.
In old day you will have more people success in " trading", not now anymore especially after all the "new generation" traders flock to the bucket shops, do you ever think why ? Those type of trading is not any difference than the sport betting, except it is using a more sexy term like " currency trading", index, long/short oil..
Time will be in your side if you are not applying any leverage, you can even further reduce your risk if you know how to hedge them using options and make time as your best friend. You can stay in the game even the price is not moving in your favor, but with leverage you are gone if it hit your "Stop Loss" or even the price just stay still (low volatility) as the bucket shop will charge you daily charge.
This will be my last post in this thread.
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