No stop loss

[MickMason]

That was a cool $275 mio loss wasn't it, in 'unauthorised currency trades'?

The bit that made me laugh was Cicutto's golden handshake of 3 million dollars, heck, I didn't even get a gold watch! No doubt he loaded up on shares before his resignation, they soared 1.5% on the day. Nice work if you can get it!

What happened to the 4 traders though, were they prosecuted, we didn't hear any more about the whole thing after Cicutto resigned.

'Boiler Room' was a good movie, and that speach in the boardroom, brilliant stuff!

Mick

[KPcurrency]

Back on topic.

Let's assume the big boys (and gals) don't use stops. The real question thus becomes what makes the big boys different from all us retail traders. Access? Information? Account Size?

yes.

So if they have some inherent advantages that allow them not to use, and or need stops; it only goes to emphasize the retail trader's need to USE them. Put another way, the big boys can do things we can't because they're big and we're not.

This is why following the C.O.T. report is flawed. The big boys enter before trends start and take positions counter to the trend. But they can handle more initail drawdown before the new trend starts. A retail trader is better off waiting for the new trend to start and then try to capture profit from it. I would sumbmit that the big boys don't know more in this case, they simply can wait longer.

so, always use stops.

[MickMason]

Well I guess it's the big boys who move the market short-term so they're really king of the jungle, a big player therefore has no need to take a loss on any position. Whether they do or not I'm not sure.

I suppose it's all down to scale, little fish like us with our small trading accounts could, in theory, average all positions in order not to lose as long as we traded extremely small, it wouldn't make sense in a trending market though because profit is there for the taking, but in a ranging market there are undoubtedly benefits in my opinion.

Mick

[nzbryant]

There's an easy answer to this question:

Do a basic test in Tradestation, whether with a profit target or a trailing stop, and any entry method (doesn't matter for this test), and you see profits go up and up and up then BAM!! - the no stop loss policy ends up in a hit that wipes out most of your account.

Stupid way to trade.

The instos use mental stops, they dont use 'no' stops.

[MickMason]

Originally posted by nzbryant


Do a basic test in Tradestation

I've just been looking at these recent one-way moves in cable and eur, if someone had gone short and added at strategic levels with a martingale strategy they would now be in profit.

That's an extreme example, markets usually move in waves as we know, so in theory it should be 'easier'.

Having said that, I can't say I would be feeling too comfortable if I'd shorted Eur from 1.26!!

I agree, it's a stupid way to trade, financial suicide, plus the risk/reward must really suck big time.

Mick