I always try to entertain.
I totally agree - if you've been trading that long, of course you would have insights and knowledge that an inexperienced trader couldn't have. As I always say, there is no substitute for experience...
Technically though, can you share some ways in which you prevent catastrophe when trading without an SL? Small lot sizes? An EA to manage it all? Constant monitoring?
Thanks!
Tiny lot sizes.
Many experienced traders accept a certain percentage of risk per trade and the most common one appears to be 2%. I am not arguing with them - they have their tried and trusted methods.
For me, it is tiny lot sizes. Live to trade tomorrow.
The only times recently that I needed to close positions at a decent sized loss was when I was overtrading.
Again.
As usual.
I like to trade 0.01 lots per pair (biggies + GJ) per $1,000 of balance. Grid trading is great when it is immediately successful, but 10 open 0.01 trades = 0.1 lots traded and is a bit of a bugger when the markets turn around and go against me.
I found myself with huge numbers of trades open when Trump won the presidency. We are talking hundreds of 0.01 trades here and a margin level of <500%. The markets were decidedly jumpy and I could see the possibility of a strong move against my trades wiping out the account, so I shut down. I lost 20% of the account. The trades might have recovered and saved me a few hundred dollars. They might have continued against me and wiped the account. I don't care. I have learned to listen to the voice inside my head that asks, "Should you close down now" and do so as soon as I hear the question.
Thing is though, that was 20% of an account I had built up nicely over preceding months. Overtrading yes, but not like I did in my early years when overtrading would have killed the account before I even had time to consider saving it. So, I still had 80% of a moderately decent trading account left and plenty of potential for growth - and it has grown courtesy of HGBnD.
I am not telling anyone how to trade here. Up to you guys whether you try HGBnD or not. Up to you whether you set a stop loss that represents x% of your trading capital.
I am just telling you how I trade without stop losses. Of course, it helps that HGBnG sets up hedged grid trades, so a monumental move in either direction will eventually trigger the stops. It might take a while in a flash crash though, but nothing is ever perfect. Anybody here who seriously believes that a stop loss will help there is living in a dream world.
A dream world that could turn into a nightmare world at any second.
Which brings me onto another hobby horse of mine. Sorry that this is turning somewhat elongated, but you have brought up thingies that I think noobs should know.
Here is this other hobby horse: never trade with funds you cannot afford to lose.
Not wanting to lose money is different. Nobody wants to do that. Being desperate not to do so is different. It will lead you to make hasty decisions that will ultimately turn out to be wrong. Guess how I know? Guess why I am so relaxed about trading these days?
You need to max out the credit card to make a trading deposit? Forget it. Carry on playing on demo whilst you save up a stake that will not result in you losing your home should you blow it.
Hmmmmmmm. This has turned into a bit of a homily, so I shall stop now. Just bear in mind guys, that trading the credo I outline above is the one I live by. 1% of the profits I make go to our UK NSPCC every month. I do not trade merely for a living. Give that some thought also.
 |
I felt threatened and I didn't even write that post! lol.