Still too many are reporting profits?

[svahid]

1- profit plan
2- stop losses
3- disciplines
I think these 3 are fundemental for a trader,
I had a mini account with $3000 ,my profit plan was taking $100 per day with 4 or 5 trade in day and stop losses witn 10% of my equity .
my system worked for 10 days very good.but one day I got a position with Gold,I took a profit with amount of $500 ,wowwwww
it was great,
I forgot my plan and my strategy.
in less than 24 hours I became MARGIN CALL.
yes ,it was a big lesson for me,
I will restart with a standard account and I never forget this

good luck
svahid

[gino]

I am a beginner too and i want to learn more in a short time.
can you give me some advise BMD, can you teach me or give some tips please .
THANKS IN ADVANCE !
GINO.

[griffin]

svahid

So sticking to a strategy and profit plan is vital, I'll try and remember that when I go live.

Stop losses though are just something I cannot understand, or see the point of. They just seem like a guaranteed loss-maker to me. Ok I understand they are there to limit losses but if one has the equity to support a negative position until it reverses (or at least comes closer to break-even ie less of a loss) then surely it's better to go with it. An example was the other morning, I went short, watched the market go the other way to the tune of 125 pips (gulp!), then watched it go back to where I'd sold, then move in my favour and go on to show a healthy profit.

If I had to set a stop-loss at 10% of my equity that would mean around 30 pips. At 30 pips I would too frequently get stopped out. To make up that loss I would have to do another trade, which I would more than likely be stopped out of....kind of a vicious circle.
If I set the stop-loss to a level where I wouldn't be stopped out then it would be too much of a loss to suffer. Ok, I could reduce the margin and have less leverage, but then I would have to wait for larger movements to realise a reasonable profit, another vicious circle.

Everyone says set a stop-loss, it's gotta be right, but I still can't see why, or at what level to set them.

Cheers

Pete

[Marty]

Griffin i dont know how deep your pockets are(and dont want to know either) but to trade without stops with a view that the market will always come back in your favour is financial/trading suicide.

As i have previously mentioned in this thread the main reason people lose money trading FX is through the lack of discipline in regard to the placing, moving and neglect of stops.

Every trade you should evaluate your pain threashold before you put the trade on.

If the market is in whipsaw mode then putting a stop close to the entry point increases the chance of getting stopped out, but its better to be stopped out rather than being closed out by your broker.

Finally the golden rule of trading is evaluate your risk.

ps if you are worried about being stopped out then maybe you should look to trade options, buying i mean.....that way you wont have to worry about your delta's, gamma's & stops.


be lucky
Marty

[gregh285]

griffin,
when entering a trade you need to know your maximum exposure. Believe me, once you have a reliable system you do not mind being stopped out, it all part of trading. It about win/loss ratios.
If 30pips is too tight, move your stop further out and take a smaller position.
until you experience a sore loser, you will not know importance of stop loss. Mine was going long on Nasdaq in 2001, to catch a falling knife, so to speak.
If you do not know where to set stops and limits, subscribe to somebody that does.
It is zero sum game, but many participants are not speculating, exporters, governments, etc. Not all banks are making money either, ask John Rusnak.

[xtsunami]

Right on, Brother! Excellent insight...

[forex1]

Thanks for a very insightful "So - who will survive..." posting.

Question: If a succesful (simple and verifiable) system is published on the Net for all to see. Do you think there is a danger that so many traders will adopt the system, and stick with it, that the system later becomes less effective?

Regards,
GautengTrader.

[griffin]

Thanks Marty and gregh285 for the replies. Can I ask you what you would do in the following hypothetical...

Account size: £20,000, no open positions.

GBP/USD 1.6065/69

Expecting 1.6110/14 you open a long position for £500,000, but you believe there is a possibility that the market will move in the opposite direction first, maybe 1.5950/54.

Where would you set your stop-loss?

Cheers

Peter