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Many words of wisdom. I blew up a few accounts when I started out by trying not to lose. Became profitable once I realised and accepted that I needed to learn to lose before I could win. Sounds nonsensical, I know but it is a fact. Another gem was learning that successful trading was not about being right.........It's about doing the right thing by sticking with your trade plan and your strategy. You will have losses and you have to accept them.
If you’re a Scalper you can’t afford not to use a tight stop loss. If you’re a Swing trader, this may work for you. I think it depends on what kind of trader you are.
I have been trading for more than 15 years. I can guarantee you that the single greatest error that a trader can do is to ignore the risk he is willing to take. Risk management necessitates the use of stop loss orders, either inserted into the platform or mental, it is the same. Ignoring risk leads to catastrophic losses. It is not related to 'if' but only to 'when'. It is simply a matter of time when exactly you will be blown out. If you are constantly stopped out, then it is absolutely certain that you are doing something wrong with your risk management. It's not your stop loss orders that are wrong and need to be omitted, it is your whole strategy that requires amendment.
Stop losses are advertisements for the institutions. You're showing them where liquidity is and they will move price to snatch you up. Chances are you're putting the stops where most traders put theirs and when the big boys see batches of liquidity above or below support/resistance, it's a perfect opportunity for them to do their business efficiently.
The best way to protect your trades is by keeping a low lot size. So when it goes against you, like way against you, you can still weather the long storm and wait for it to come back. It isn't about stop losses, it's more about lot sizes.
VERY true, instead of placing an unrealistic tight stop loss, just reduce your share size and allow your trade room to swing back and forth. Your stop loss should always be based on previous support or resistance and those are not always in a tight range.
I have personally papertraded the exact same stocks at the exact same time on different platforms. I have found that it is true. It took me years to break this habbit because it was one of the first things I learned. You manage risk by your position size.
Your stop loss protects your account from blowing up. If you have even a decent algorithm that you test over and over you shouldn’t hit your stop loss often at all, even while keeping your risk at or below 2% of your account. If you keep getting stopped out, the problem is your system, not your stop losses. If your stop losses truly are “too tight”, then your actual problem is money/risk management.
I agree completely. Many trades I've done, I was always stopped out. The key for me was to have minimum capita with lower lot sizes and trade long term only.
Stop losses should only be used when you are not actively watching your open trade, if you are at your computer or phone watching your trades then there is no need to have stop loss points.
This man is telling the truth. Tight stop losses is an idea that is designed mostly to benefit the brokerages/exchange/investment banks. Their objective is for you, the retail investor, to make as many and large trades as possible which makes them money every trade and also provides them the liquidity they need to turn your losses into their gains. They have a major conflict of interest when they encourage you to do certain things and tight stop losses is a perfect example of it.
I thought I was an irresponsible madman because I average down my stop losses and keep an eye on the chart doing that manually, finally someone that made me feel less alone at the battle field, thank you Mr.
The week I stopped using stop losses but instead monitored my trades and closed them manually when the prices reach where my stop loss would have been, I made 30% on same strategy that was making 2%.
How? That doesn't make sense to me. According to you, your stop position either manual or automatic was in the same spot. Could you explain this please? All the best!
literally the exact same thing as using a stop loss.... so, insted of setting your stop loss, you mentally set it then adhered to it. exactly the same strategy. this is some misinfo right here. someones trying to set up the public to feed their own strategy.
This guy is super right. When I started trading newly I had reservations about putting stop losses since I monitored my trades a lot and then I decided to use stop loss suddenly I lost more using stop losses more often than necessary and most times the trade eventually went in the direction of my prediction
Too tight stop loss is bad, too wide stop loss is bad too. To find the optimal stop loss, one needs to backtest the strategy or find out the hard way by trial and error.
When I was first learning about stop losses.. that's the first concern came to my mind.. what if there's just flash pulls/pumps for split seconds? What this guys saying is ABSOLUTELY right. DO NOT use stop losses. Always keep an eye on the market. Do not sleep with your open position (w/ high margin/leverage ofc)
Also the problem is that people are not precise with their entries, you need to enter in a very tight precise entry signal in a SHORT TIME FRAME, that goes in the direction of your long time frame if you are looking into a longer time frame trade. That way you can put your stop really tight and are not just entering in the middle of nowhere because you have no idea whats happening in the smaller time frame, remember everyone talks about lagging indicators well looking at a 1 hour 3 hour daily chart is a lagging indicator by definition, go into the smaller time frame and do the same thing you are doing in the larger time frame, find a entry signal where you can put a tight stop and is going in your direction so now your risk to reward ratio is huge and your risk is very small! then as soon as you can move the stop to breakeven, now you have a ZERO RISK TRADE!! its not risk management its about RISK ELIMINATION! you don't want to manage the rats in your house you want to eliminate them, first minimize the risk, then you eliminate it for ever , now your trade has zero risk.
How to use stop loss- depends on your trading set up and analysis: How far would the market have to move against your intended entry area for you to decide you were wrong? Your stop loss should be outside that zone. If the distance huge, you need to wait for a set up where your stop loss distance is smaller. Some people use too tight stop losses, but you should always have a stop loss of no more than you are willing to lose in one trade, or in one day. To go without using any stop loss is asking for disaster.
Coming from an individual who's not a profitable trader sounding as if he's a pro, I can't accept that. Mostly 90% of Trader's aren't profitable and you've just stated what 90% of traders do, so your comment holds no verifiable merit.
Mlogan11 Yes, I think he’s specifically talking about equities, ETF’s, generally slower moving than FOREX. Most people getting into trading seem to be drawn to FOREX, and certainly when new to trading you need tighter stop losses, even just to give yourself a chance of not wiping out your account early on. In terms of size of stop loss, he’s not taking about not having a stop loss. He has one but it’s not tight. So within a day he will override and close the trade manually before the stop loss is within range anyway - if he feels he got it wrong in the first place. He’s obviously medium range trader as mentioned. And presumably confident, competent and used to getting the call right a lot of the time. I do know of people who are well against quick return and much more about long term wealth growth. Bottom line. Until you’ve got a bit of time and successful trading under your belt, you have to protect yourself with reasonably tight stop loss. Or more to the point, trade virtual until you’re more than confident you’ve progressed to a point where you’re are consistent enough in your successful trades. Once there is consistency to you should be able to work out what risk tolerance suits your trading style/method. The instrument and time frame your trading also being major considerations.
Not putting a stop in the market is different from not having a stop in mind. Not using a tight stop is different from not using a stop at all. If you know the reason you put a trade on, you know when that reason no longer exists or has failed. If you know your support and resistance and trend patterns and what you're trading within and you're not overextended, you can choose to take a fast loss or gamble on a bounce.
Absolutely right. Day traders blow up their accounts only due to the tight stop losses even though they may have got the direction right. Its frustrating.
At first I thought it means, never to use stop loss in all cases. I appreciate that he mentioned not to use too tight stop loss and that if you are confident that you’re trading in the right direction, dont use it. If youre not confident, dont do that trade at all.
Say no stop losses, is essentially saying don't get out of a trade until it works. That's a recipe for disaster and blowing accounts. Take the loss and live to trade another day. If you stop losses are stopping you from making money, than it's not the stop loss it's the trade.
Do the fundamentals analysis, decide which way the market is going. Then build a position. If your in the red but your conviction is that the market is going to come good then add to your position. Keep your position sizes small and manageable and have a cut off point where you kill the trade but give your stop loss plenty of room. Key thing here is to build your position rather than just going in heavy right from the start.
After being stopped out TOO many times, I finally stopped using them and instead I put AUTO ALERTS on my positions instead, so only I know where my stops were instead of the Market Makers knowing and letting them manipulate the prices down. Now, when a price goes against me I am alerted by my platform so I can look at it to see if the Volume to Price (VPA) is indicative of market manipulation or just recent news that is causing a dip.
He's right - a tight stop loss will take you out too soon and you will lose $$. Best to set a stop loss of 20-25% against the former high, adjusted against the ATR (average trading range), and in this way you let your winners run and your exit - if triggered by the stop loss - won't be at the high but you will make $$ on your exit. Your entry needs to be into an upward trend.
This makes perfect sense. Upon looking back at my trades, most of the times they go in my direction either shortly or a little after getting stopped out.
Believe me, trading with out stops is like going to a war with out a shield. you may kill 100s, but surely one bow will kill you. you are trading not to kill your account, but to make money.
I actually agree with him. One trade I was in I set the stop lose about a mile away because I was in fact confident in the direction it went negative about 21k but I knew it would turn and it profited 11k in the end👍🔥
best choice!! for example, I had bought at a certain price. Then it crashed down a lot but I held and now it is back at my price again with an uptrend. Mental stop loss is best!
Using a stop loss is like playing poker and showing everyone at the table your hand....never use a stop loss...it is the way wall street professionals pick your pocket !!!!
A sincere advice to you guys who are watching this, use a stop loss at every trade! If your stop loss get taken out alot, you will need to relearn where to entry at a better price and avoid putting SL at obvious support and resistance area, you will thank me in the future.
I find this to be very true. Most times once your stop loss gets hit, price usually reverses to your intended direction. This happens more than 90 percent of the times when I use tight stop losses.
Depends the time frame you're trading at. If you're trading the 60 min, 2 hours you should know if the trade did what you wanted it to do. If it didn't, get out - take the hit.
There’s much risk involved, most traders are searching for that elusive method where they never lose or can win eight or nine trades out of 10, amassing huge profits in a short amount of time with no risk.
my stop loss used to get triggered by the market maker spiking the price in one direction or the other. once this happens to you a couple of times, you realize the stop loss may not be your friend.
if you have an edge that requires a predetermined loss per trade, stopping out at defined levels is necessary to allow for the positive expectancy to materialize
Without Stop loss most of the traders will blow their account, which most of the newbies do.but with Stop loss you stay longer in the game and hopefully learn. Stop loss should be at the place where if prices go it changes the anticipated structure of the market, where the price should not be if you were right.
Im a day trader, guess what? I use super tight stop losses and i didn't get stopped out that much, by making sure that the market condition is not entirely chaotic and find a good entry, it take patient to do so but the return is worth it.
Stop losses are a scam. NEVER USE THEM. Market will go lower just to trigger your stop loss to take you out and then go back up. Instead, simply set alerts and then act manually when the time comes.
I notice this in crypto constantly. Price will start to move in an obvious uptrend, get knocked down 2-3%, stop out all the tight wads who actually picked a good spot, and then go nuts from there.
Wow! I totally agree! I started losing money only because of stop losses. Now I just watched a video that makes sense. Set stop losses when in profit! You lose before you start winning and where that drops before the win is unpredictable.
I only had problems with hard stop losses before I fully understood price action and my strategy. IMO problems with stop losses have more to do with not fully understanding price action and the pulse of the market. Every trader is different so if stop losses don't work for you then don't use them and vice versa. I know plenty of people who have blown out accounts from not having a stop loss, confident a trade would "eventually" go in their favor and couldn't determine when to cut the loss. The size of the account didn't make a difference. They suffered from lack of experience and/or ego. There is no one size fits all solution. Learn yourself and what works best for you and you will find maximum success in the market.
Exactly correct. He is bold enough to say the reality about stop loss. I thank Andre Minassian for his explanation. I appreciate the beautiful anchor also (sorry, I dont know the name) in this video. Keep uploading such videos for helping the traders, who get losses due to stop losses.
he's right, the market makers have way more data than you do as a retail trader and they can see your entry points.. like level 2 data in stocks. they will push the market against you. stay liquid and be able to rid out "static" higher timeframes are best. long term positions, bankers aren't watching the market like retail traders do, they're working, its a job to them and its long term weekly to monthly and even yearly targets
I use stops always.. the msg here is simple, place any stops outside the normal volatility range relative to the time frame in which your trading. I'm always wary of people like this encouraging inexperienced traders not to place stops rather than teaching them where to place their stops.
stop loss is the biggest scam in this industry, here is an entity that knows that x many people will win and ask her for the prize and know also that these would be winners have a hidden secret (the stop loss) if used against them they will give up on the prize, what do you think this entity will do in your right mind?
Stop loss orders can be your biggest enemy or your biggest ally. If you don't where to put them and how to magage them, you are going to be manipulated by the large traders. If you put them in the right places, you will be able to trade WITH the large traders.
Totally agree about stop losses. From my point of view the thing consists in risk management, if the size of your position, the size of your lot is compatible with your account balance. Period.
Even if you have a tight stop loss, and it gets hit, you can always get back in the trade at a later time, which may be better for you anyway. With a real large stop loss your risking way too much.
etaylor38 Exactly. They are tagged on upthrusts, downthrusts and then the market reverses to your direction. There is no way to control or predict them, watch out for market openings, news releases that’s when they like to do them. And then re-enter to your direction on a spike.
but then your taking losses which 1. affect the mind and 2. affect the balance. if you put in a stop and get stopped out are you really going to be as confident adding another position on that trade? i don't think so. Yet better risk less, use no stops and massage an area with 3/4 positions equally overall the % your willing to lose then manually watch over the trade. The only thing i use when trading is TP levels in case am not at the charts and it hits the TP level i was aiming for.
This should have been titled "4:38 of useless information". He admitted he uses stop losses and I guarantee he has used a tight stop loss before. They do work in certain situations. Don't listen to this guy he's being distracted by his huge ego.
Well, at the same time, many novice traders lose money because they have faith that the market will go in the direction they have predicted, when markets go against them. Truth is, novice traders have to know where they should exit the markets, this is extremely important, using stop loss or not.
A Stop Loss will not protect you in case of a gap down then, you lose your shirt even with a Stop Loss. Buy a Put Option which gives you better protection with leverage to boot!
Fact...i lose more when i put tight stop loss, not giving enough room for stop will put you out in the game. put your trade when the price is going to pullback with a stop that will hit the support.
While setting stop losses in the noise (ie too tight) is a terrible idea, setting stop losses with proper consideration of market volatility is the only way to consistently make money in the market. Going all in will eventually kill your profitability with a few bad trades.
This is not even an issue. There is such a thing as a married put. Buy a stock, say WFM at $50.00 at 100 shares. That is $5,000.00. Now, buy a $50.00 Put for the time period you want to hold the stock. That gives you the right to sell your shares at $50.00. Say the put option cost you $3.00 or $300.00. Total invested is $5,300.00. Anything above $53.00 is profit. If it goes below $50.00, you can still sell your stock for $50.00 so, all you lost is the cost of put option of $3.00 or $300.00. You only risk $300.00 and your upside is unlimited! You can even forget your trade and check it after a month, 2 months assuming your put option is good for the next 3 months, say it is April 2017 and your option expires in July 2017.
$300 on a $5,300 investment is a 5.6% loss. Makes much more sense to me if you set a stop loss 5.6% below your initial investment if that's what your willing to risk. With a stop loss you don't have to mess with buying and selling options.
It's perhaps better to use a stop loss offensively instead of defensively (or both). Rather then setting a stop loss when entering a long position, it's probably best to set a trailing stop loss where you intend to exit a position . If the price drops then it sells or if the price rises you then get to sell higher by adjusting the stop loss higher. You can do the same in reverse with a trailing limit order to enter a position. One never knows what the price will do especially in the short term.
Pretty simple really. I usually have a 2% stop loss in trades that I'm confident on. They nearly always never get there before going back up. The ones that do keep going, usually a stock dump
Trading without stoploss is an excuse for mediocre traders wich are totally strange about technicaly analysis and most important : TIMING . The skilled the trader, the timed the entry with a stoploss wich will not be hit.
"The skilled the trader, the timed the entry with a stop loss which will not be hit" Yeap, a winning trade will usually start going in your direction most of the time this is detailed in the Market Wizards. I understand his point but consider it wrong.
Dhaval kuvadia Learn how to trade with volume and if you can understand the teachings you will be able to read the market on virtually any time frame. Follow the money! The only way you can do this with any certainty is by learning how to trade with volume. It's not as easy as some make out but at the same time not that hard either.
I think best stop loss is just a bit below 7 days lowest and definitly below support and 3 days ATR.. if it hits that point then its going downhill, clearly.
The best statement I have seen on this subject is to put the stop loss at a place where you know for sure the trade is not working as you expected (max 2% risk of account equity). And definitely NOT 'just below support' or 'just above resistance', as that is where everyone in the FX industry is brainwashed to put them and that is where the big money is looking to take out your trade for their benefit.
There's truth in what the dude is saying, I mean I always go in and then I am closed out and then it goes back in the same direction. also support him on the issue of the stock market is rigged. That's my take. Thanks UKspreadbetting.
I turned profit but as always when you lose on that day you lose big but you can still make the profits back. I had reached some points/levels in my trading that I never reached before. So I will say so far so good. Try it out
when ever you get stopped out. set an alert at a price just above the where you got stopped out on. for example i may set it at the high of the candlestick in which i got stopped out of. so if the stock rebounds above where you got stopped out and hits that high, you would get the alert, then its your decision if you want to jump right back in. so from now on, you would not feel too bitter about being stopped out because your alert would notify you if you can jump back in if price rebounds in your favored direction.
Stop-losses is for traders who simply don't know what they're doing and, unfortunately, most traders don't know what they're doing. And if YOU don't know what you're doing it is better to use Stop-Losses. Even those self-appointed Gurus on UA-cam don't know what they're doing. Since I've learned about Patterns, The Elliot Wave Theory, the difference between an Impulse Wave, Motive Wave, ABC Correction, Prechter, Ending Diagonals, Wedges, Triangles, Gann Theory, Pivot Tables, Moving Averages, how to apply different time charts, etc, I don't use stop-losses anymore because I KNOW what I'm doing!
It depends on your style of trading if you're a scalper or intraday trader trading 5 mins chart then it's compulsory to have a stoploss. You don't want a buster in your equity curve. One bad trade and you're again back to zero. Not having a stoploss can work in swing or short term trading but avoiding a stoploss in scalping and intraday trading is a big no no.
The problem is not tight stop losses, the problem is people have this weird delusion that you only have one chance to place a trade. Put the stop tight, and if it goes really against you you are safe and if there is another point to enter on the same direction, enter again with another tight stop and if this time it goes in your favor then you only lost that initial tight stop and your risk to reward ratio is much larger,
I take 20 positions and put 20% SL on each. When they move up 10% I reduce it to 10%. Worst case I break even or it continues to run and I move the SL up along with it. 20% seemed like a lot, but when you spread it out it is on average 20% of 5% of your portfolio in other words, 1%. All 20 of your picks won't crater at the same time. Some do, but it's better to take your loss and put what is left somewhere that it can make money rather than hope for it to bounce back.
If your scalping all day on 5/10/15 minute charts stops are no good and never use them, If you have to place stops then your unsure of your entry and shouldn't have done it, Stops are only for longer term and overnight trades which i never do anyway, As this bloke says it normally goes against you first then bounces your way.
"Stops are only for longer term and overnight trades..." --------------------------------------------------------------------------- Mark: No sir: I beg to differ. It is the intraday trading when stops are appropriate. Not overnight, especially so; for anything can occur with an overnight trade and this may plummet through your stop and open the next morning so far down it would be woeful -- *and, yet, you are still in the trade!*
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Many words of wisdom.
I blew up a few accounts when I started out by trying not to lose.
Became profitable once I realised and accepted that I needed to learn to lose before I could win.
Sounds nonsensical, I know but it is a fact.
Another gem was learning that successful trading was not about being right.........It's about doing the right thing by sticking with your trade plan and your strategy. You will have losses and you have to accept them.
If you’re a Scalper you can’t afford not to use a tight stop loss.
If you’re a Swing trader, this may work for you. I think it depends on what kind of trader you are.
I have been trading for more than 15 years. I can guarantee you that the single greatest error that a trader can do is to ignore the risk he is willing to take. Risk management necessitates the use of stop loss orders, either inserted into the platform or mental, it is the same. Ignoring risk leads to catastrophic losses. It is not related to 'if' but only to 'when'. It is simply a matter of time when exactly you will be blown out. If you are constantly stopped out, then it is absolutely certain that you are doing something wrong with your risk management. It's not your stop loss orders that are wrong and need to be omitted, it is your whole strategy that requires amendment.
Stop losses are advertisements for the institutions. You're showing them where liquidity is and they will move price to snatch you up. Chances are you're putting the stops where most traders put theirs and when the big boys see batches of liquidity above or below support/resistance, it's a perfect opportunity for them to do their business efficiently.
The best way to protect your trades is by keeping a low lot size. So when it goes against you, like way against you, you can still weather the long storm and wait for it to come back. It isn't about stop losses, it's more about lot sizes.
Agree with this 100% Too many times got taken out with a stop loss, only for the market to go back in the trade's favour.
The day I removed the stop loss from my trading was the day a new world opened in front of my eyes.
VERY true, instead of placing an unrealistic tight stop loss, just reduce your share size and allow your trade room to swing back and forth. Your stop loss should always be based on previous support or resistance and those are not always in a tight range.
If your in profit, place a stop-loss...
2:50 “I go all the way in” then the look from the lady
I was thinking the same XDD
I don't use stop losses at all!!! When I stopped using stop losses, I finally started making money.
Best stop-loss is your interior hope 🙏indicator: as soon as you start hoping --> run, as fast as you possibly can. 🏃 💨
With 3 years of Live trading, he is totally correct
I have personally papertraded the exact same stocks at the exact same time on different platforms. I have found that it is true. It took me years to break this habbit because it was one of the first things I learned. You manage risk by your position size.
Your stop loss protects your account from blowing up. If you have even a decent algorithm that you test over and over you shouldn’t hit your stop loss often at all, even while keeping your risk at or below 2% of your account. If you keep getting stopped out, the problem is your system, not your stop losses. If your stop losses truly are “too tight”, then your actual problem is money/risk management.
Institutional traders will try to sweep out stops that are placed too close to the traffic, so you need more room to stay in the action.
I agree completely. Many trades I've done, I was always stopped out. The key for me was to have minimum capita with lower lot sizes and trade long term only.
Stop losses should only be used when you are not actively watching your open trade, if you are at your computer or phone watching your trades then there is no need to have stop loss points.
No stop loss at all, small leverage and scale in at structure points.
no tight stop losses, let the price breathe
if u dont feel confident.. and if your gut says dont then DONT
Wow, now I feel comfort knowing that I'm not alone. Believe this guy. Your eyes should be the manual stop loss.
For scalpers tight stop loss is essential
This man is telling the truth.
Tight stop losses is an idea that is designed mostly to benefit the brokerages/exchange/investment banks. Their objective is for you, the retail investor, to make as many and large trades as possible which makes them money every trade and also provides them the liquidity they need to turn your losses into their gains. They have a major conflict of interest when they encourage you to do certain things and tight stop losses is a perfect example of it.
I thought I was an irresponsible madman because I average down my stop losses and keep an eye on the chart doing that manually, finally someone that made me feel less alone at the battle field, thank you Mr.
The week I stopped using stop losses but instead monitored my trades and closed them manually when the prices reach where my stop loss would have been, I made 30% on same strategy that was making 2%.
This doesn't make sense. If you manually closed when it hit the stop loss level, then you'd get the same result...
your stop loss positions are monitored by marketmakers
How? That doesn't make sense to me. According to you, your stop position either manual or automatic was in the same spot. Could you explain this please? All the best!
literally the exact same thing as using a stop loss.... so, insted of setting your stop loss, you mentally set it then adhered to it. exactly the same strategy. this is some misinfo right here. someones trying to set up the public to feed their own strategy.
Chiny O yes because they can see your stop loss order
This guy is super right. When I started trading newly I had reservations about putting stop losses since I monitored my trades a lot and then I decided to use stop loss suddenly I lost more using stop losses more often than necessary and most times the trade eventually went in the direction of my prediction
Too tight stop loss is bad, too wide stop loss is bad too. To find the optimal stop loss, one needs to backtest the strategy or find out the hard way by trial and error.
When I was first learning about stop losses.. that's the first concern came to my mind.. what if there's just flash pulls/pumps for split seconds?
What this guys saying is ABSOLUTELY right. DO NOT use stop losses. Always keep an eye on the market. Do not sleep with your open position (w/ high margin/leverage ofc)
ALL IN!!
NO STOP LOSSES!!
.....right. You can't go worse than that..
Pure crap unless you are a long term buy and hold person. "I am not a very good risk manager," nuff said sir.
Also the problem is that people are not precise with their entries, you need to enter in a very tight precise entry signal in a SHORT TIME FRAME, that goes in the direction of your long time frame if you are looking into a longer time frame trade. That way you can put your stop really tight and are not just entering in the middle of nowhere because you have no idea whats happening in the smaller time frame, remember everyone talks about lagging indicators well looking at a 1 hour 3 hour daily chart is a lagging indicator by definition, go into the smaller time frame and do the same thing you are doing in the larger time frame, find a entry signal where you can put a tight stop and is going in your direction so now your risk to reward ratio is huge and your risk is very small! then as soon as you can move the stop to breakeven, now you have a ZERO RISK TRADE!! its not risk management its about RISK ELIMINATION! you don't want to manage the rats in your house you want to eliminate them, first minimize the risk, then you eliminate it for ever , now your trade has zero risk.
How to use stop loss- depends on your trading set up and analysis:
How far would the market have to move against your intended entry area for you to decide you were wrong? Your stop loss should be outside that zone. If the distance huge, you need to wait for a set up where your stop loss distance is smaller.
Some people use too tight stop losses, but you should always have a stop loss of no more than you are willing to lose in one trade, or in one day. To go without using any stop loss is asking for disaster.
Coming from an individual who's not a profitable trader sounding as if he's a pro, I can't accept that. Mostly 90% of Trader's aren't profitable and you've just stated what 90% of traders do, so your comment holds no verifiable merit.
Mlogan11
Yes, I think he’s specifically talking about equities, ETF’s, generally slower moving than FOREX. Most people getting into trading seem to be drawn to FOREX, and certainly when new to trading you need tighter stop losses, even just to give yourself a chance of not wiping out your account early on.
In terms of size of stop loss, he’s not taking about not having a stop loss. He has one but it’s not tight. So within a day he will override and close the trade manually before the stop loss is within range anyway - if he feels he got it wrong in the first place.
He’s obviously medium range trader as mentioned. And presumably confident, competent and used to getting the call right a lot of the time.
I do know of people who are well against quick return and much more about long term wealth growth.
Bottom line. Until you’ve got a bit of time and successful trading under your belt, you have to protect yourself with reasonably tight stop loss.
Or more to the point, trade virtual until you’re more than confident you’ve progressed to a point where you’re are consistent enough in your successful trades.
Once there is consistency to you should be able to work out what risk tolerance suits your trading style/method. The instrument and time frame your trading also being major considerations.
Not putting a stop in the market is different from not having a stop in mind. Not using a tight stop is different from not using a stop at all. If you know the reason you put a trade on, you know when that reason no longer exists or has failed. If you know your support and resistance and trend patterns and what you're trading within and you're not overextended, you can choose to take a fast loss or gamble on a bounce.
Absolutely right. Day traders blow up their accounts only due to the tight stop losses even though they may have got the direction right. Its frustrating.
At first I thought it means, never to use stop loss in all cases. I appreciate that he mentioned not to use too tight stop loss and that if you are confident that you’re trading in the right direction, dont use it. If youre not confident, dont do that trade at all.
Say no stop losses, is essentially saying don't get out of a trade until it works. That's a recipe for disaster and blowing accounts.
Take the loss and live to trade another day.
If you stop losses are stopping you from making money, than it's not the stop loss it's the trade.
I would recommend a trailing stop once your already in a profit
Do the fundamentals analysis, decide which way the market is going. Then build a position. If your in the red but your conviction is that the market is going to come good then add to your position. Keep your position sizes small and manageable and have a cut off point where you kill the trade but give your stop loss plenty of room. Key thing here is to build your position rather than just going in heavy right from the start.
Don't go heavy and don't build nothing. Just open another position in something that's hopefully not correlated.
After being stopped out TOO many times, I finally stopped using them and instead I put AUTO ALERTS on my positions instead, so only I know where my stops were instead of the Market Makers knowing and letting them manipulate the prices down. Now, when a price goes against me I am alerted by my platform so I can look at it to see if the Volume to Price (VPA) is indicative of market manipulation or just recent news that is causing a dip.
He's right - a tight stop loss will take you out too soon and you will lose $$. Best to set a stop loss of 20-25% against the former high, adjusted against the ATR (average trading range), and in this way you let your winners run and your exit - if triggered by the stop loss - won't be at the high but you will make $$ on your exit. Your entry needs to be into an upward trend.
One wrong prediction , you blow your account. Stop loss are important Sir.
This makes perfect sense. Upon looking back at my trades, most of the times they go in my direction either shortly or a little after getting stopped out.
Believe me, trading with out stops is like going to a war with out a shield. you may kill 100s, but surely one bow will kill you. you are trading not to kill your account, but to make money.
I actually agree with him. One trade I was in I set the stop lose about a mile away because I was in fact confident in the direction it went negative about 21k but I knew it would turn and it profited 11k in the end👍🔥
Absolutely, my broker always try to convince me to put stop loss but I never do. I make 85% of winning trades.
best choice!!
for example, I had bought at a certain price. Then it crashed down a lot but I held and now it is back at my price again with an uptrend. Mental stop loss is best!
Using a stop loss is like playing poker and showing everyone at the table your hand....never use a stop loss...it is the way wall street professionals pick your pocket !!!!
Nobody really knows it's your stop loss and to what opening price it belongs to
A sincere advice to you guys who are watching this, use a stop loss at every trade! If your stop loss get taken out alot, you will need to relearn where to entry at a better price and avoid putting SL at obvious support and resistance area, you will thank me in the future.
I find this to be very true.
Most times once your stop loss gets hit, price usually reverses to your intended direction.
This happens more than 90 percent of the times when I use tight stop losses.
Depends the time frame you're trading at. If you're trading the 60 min, 2 hours you should know if the trade did what you wanted it to do. If it didn't, get out - take the hit.
There’s much risk involved, most traders are searching for that elusive method where they never lose or can win eight or nine trades out of 10, amassing huge profits in a short amount of time with no risk.
my stop loss used to get triggered by the market maker spiking the price in one direction or the other. once this happens to you a couple of times, you realize the stop loss may not be your friend.
if you have an edge that requires a predetermined loss per trade, stopping out at defined levels is necessary to allow for the positive expectancy to materialize
Without Stop loss most of the traders will blow their account, which most of the newbies do.but with Stop loss you stay longer in the game and hopefully learn.
Stop loss should be at the place where if prices go it changes the anticipated structure of the market, where the price should not be if you were right.
He is absolutely right...I learned it the hard way, now I keep a large SL, now my winning average is much much better
And your risk / reward ratio .... .. . ?
Watch this and do the opposite. Wtf... Brave? No Stoploss? All in? Unbelievable for a trader to give such an advice.
After getting stopped out over n over by large whales ! I’m done. I keep huge low stop losses if ever ! Confidence in investment is key. Namaste
Im a day trader, guess what? I use super tight stop losses and i didn't get stopped out that much, by making sure that the market condition is not entirely chaotic and find a good entry, it take patient to do so but the return is worth it.
Tight stops mean you are gambling and there's no background check behind the trade. This guy is right. My stops are always much lower than my target.
If you backtest your system you should know where to put your stop losses
I never used fixed stop loses. Like the man said you know when to close. It’s just a instinct you build after long period of trading.
Stop losses are a scam. NEVER USE THEM. Market will go lower just to trigger your stop loss to take you out and then go back up. Instead, simply set alerts and then act manually when the time comes.
I notice this in crypto constantly. Price will start to move in an obvious uptrend, get knocked down 2-3%, stop out all the tight wads who actually picked a good spot, and then go nuts from there.
Wow! I totally agree! I started losing money only because of stop losses. Now I just watched a video that makes sense. Set stop losses when in profit! You lose before you start winning and where that drops before the win is unpredictable.
I only had problems with hard stop losses before I fully understood price action and my strategy. IMO problems with stop losses have more to do with not fully understanding price action and the pulse of the market. Every trader is different so if stop losses don't work for you then don't use them and vice versa. I know plenty of people who have blown out accounts from not having a stop loss, confident a trade would "eventually" go in their favor and couldn't determine when to cut the loss. The size of the account didn't make a difference. They suffered from lack of experience and/or ego. There is no one size fits all solution. Learn yourself and what works best for you and you will find maximum success in the market.
Exactly correct. He is bold enough to say the reality about stop loss. I thank Andre Minassian for his explanation. I appreciate the beautiful anchor also (sorry, I dont know the name) in this video. Keep uploading such videos for helping the traders, who get losses due to stop losses.
he's right, the market makers have way more data than you do as a retail trader and they can see your entry points.. like level 2 data in stocks. they will push the market against you. stay liquid and be able to rid out "static" higher timeframes are best. long term positions, bankers aren't watching the market like retail traders do, they're working, its a job to them and its long term weekly to monthly and even yearly targets
I use stops always.. the msg here is simple, place any stops outside the normal volatility range relative to the time frame in which your trading. I'm always wary of people like this encouraging inexperienced traders not to place stops rather than teaching them where to place their stops.
stop loss is the biggest scam in this industry, here is an entity that knows that x many people will win and ask her for the prize and know also that these would be winners have a hidden secret (the stop loss) if used against them they will give up on the prize, what do you think this entity will do in your right
mind?
Stop loss orders can be your biggest enemy or your biggest ally. If you don't where to put them and how to magage them, you are going to be manipulated by the large traders. If you put them in the right places, you will be able to trade WITH the large traders.
Totally agree about stop losses. From my point of view the thing consists in risk management, if the size of your position, the size of your lot is compatible with your account balance. Period.
Even if you have a tight stop loss, and it gets hit, you can always get back in the trade at a later time, which may be better for you anyway. With a real large stop loss your risking way too much.
etaylor38 Exactly. They are tagged on upthrusts, downthrusts and then the market reverses to your direction. There is no way to control or predict them, watch out for market openings, news releases that’s when they like to do them. And then re-enter to your direction on a spike.
but then your taking losses which 1. affect the mind and 2. affect the balance. if you put in a stop and get stopped out are you really going to be as confident adding another position on that trade? i don't think so. Yet better risk less, use no stops and massage an area with 3/4 positions equally overall the % your willing to lose then manually watch over the trade. The only thing i use when trading is TP levels in case am not at the charts and it hits the TP level i was aiming for.
The point is you're losing money every time your stop loss is hit...
he was right dow jones broke 19 and went to 20
He's correct tight stops is a bad thing because most times you're right and then get stop out because youre listening to people saying control risk
This should have been titled "4:38 of useless information". He admitted he uses stop losses and I guarantee he has used a tight stop loss before. They do work in certain situations. Don't listen to this guy he's being distracted by his huge ego.
2:50 she could feel it," ALL THE WAY IN"
When he said he’s not a good risk manager, that said a lot more than everything else he said. He’s got a good point though.
Well, at the same time, many novice traders lose money because they have faith that the market will go in the direction they have predicted, when markets go against them. Truth is, novice traders have to know where they should exit the markets, this is extremely important, using stop loss or not.
A Stop Loss will not protect you in case of a gap down then, you lose your shirt even with a Stop Loss. Buy a Put Option which gives you better protection with leverage to boot!
Fact...i lose more when i put tight stop loss, not giving enough room for stop will put you out in the game. put your trade when the price is going to pullback with a stop that will hit the support.
I NEVER use stop losses and profitable daily. I only focus on 2 charts and got a good feel for them.
While setting stop losses in the noise (ie too tight) is a terrible idea, setting stop losses with proper consideration of market volatility is the only way to consistently make money in the market. Going all in will eventually kill your profitability with a few bad trades.
This is not even an issue. There is such a thing as a married put. Buy a stock, say WFM at $50.00 at 100 shares. That is $5,000.00. Now, buy a $50.00 Put for the time period you want to hold the stock. That gives you the right to sell your shares at $50.00. Say the put option cost you $3.00 or $300.00. Total invested is $5,300.00. Anything above $53.00 is profit. If it goes below $50.00, you can still sell your stock for $50.00 so, all you lost is the cost of put option of $3.00 or $300.00. You only risk $300.00 and your upside is unlimited! You can even forget your trade and check it after a month, 2 months assuming your put option is good for the next 3 months, say it is April 2017 and your option expires in July 2017.
MrMatipid this is absolutely right and is a way I know several traders trade futures
solid
MrMatipid cool I got,a look into that😎
$300 on a $5,300 investment is a 5.6% loss. Makes much more sense to me if you set a stop loss 5.6% below your initial investment if that's what your willing to risk. With a stop loss you don't have to mess with buying and selling options.
you can't do this on robin hood app. how do i learn to set up this option, buffett's $1 Put ?
It's perhaps better to use a stop loss offensively instead of defensively (or both). Rather then setting a stop loss when entering a long position, it's probably best to set a trailing stop loss where you intend to exit a position . If the price drops then it sells or if the price rises you then get to sell higher by adjusting the stop loss higher. You can do the same in reverse with a trailing limit order to enter a position. One never knows what the price will do especially in the short term.
Pretty simple really. I usually have a 2% stop loss in trades that I'm confident on. They nearly always never get there before going back up. The ones that do keep going, usually a stock dump
3:10 He was right on that DJIA 19000 call. Nicely done.
Trading without stoploss is an excuse for mediocre traders wich are totally strange about technicaly analysis and most important : TIMING .
The skilled the trader, the timed the entry with a stoploss wich will not be hit.
you must be a millionaire now.
"The skilled the trader, the timed the entry with a stop loss which will not be hit" Yeap, a winning trade will usually start going in your direction most of the time this is detailed in the Market Wizards. I understand his point but consider it wrong.
bulltraderpt Hahahahahahahahaha no way you believe that shit do you?
Tight stop losses are a bad idea. Unless you get stopped out and instantly REVERSE. Use fast and slow moving averages cross to enter...
Dave Bennett Which MA do you use ? which do you suggest as fast and slow.?
14 and 50 EMA for the one hour direction, and then 25 EMA for 5 mins In my opinion.
Dhaval kuvadia Learn how to trade with volume and if you can understand the teachings you will be able to read the market on virtually any time frame. Follow the money! The only way you can do this with any certainty is by learning how to trade with volume. It's not as easy as some make out but at the same time not that hard either.
EMA crossing? hahaha thats pure shit
I think best stop loss is just a bit below 7 days lowest and definitly below support and 3 days ATR.. if it hits that point then its going downhill, clearly.
I'm on board with this. I have never used stop losses. I swing trade blue chips. If I used stops I'd be flat broke.
The best statement I have seen on this subject is to put the stop loss at a place where you know for sure the trade is not working as you expected (max 2% risk of account equity). And definitely NOT 'just below support' or 'just above resistance', as that is where everyone in the FX industry is brainwashed to put them and that is where the big money is looking to take out your trade for their benefit.
Stop loss Kills! Trade your way and manage your trade.
the best free advised in forex
There's truth in what the dude is saying, I mean I always go in and then I am closed out and then it goes back in the same direction. also support him on the issue of the stock market is rigged. That's my take. Thanks UKspreadbetting.
A month on from this comment, did you implement larger stop loss gaps and how has it affected your trading if you did?
I turned profit but as always when you lose on that day you lose big but you can still make the profits back. I had reached some points/levels in my trading that I never reached before. So I will say so far so good. Try it out
yeah will do thanks for the feedback!
when ever you get stopped out. set an alert at a price just above the where you got stopped out on. for example i may set it at the high of the candlestick in which i got stopped out of. so if the stock rebounds above where you got stopped out and hits that high, you would get the alert, then its your decision if you want to jump right back in. so from now on, you would not feel too bitter about being stopped out because your alert would notify you if you can jump back in if price rebounds in your favored direction.
Whats your take/feedback its been a month? unless you didnt try it out
Totally. I don't trade Forex but I don't use stop losses. i do follow stuff very closely.
Stop-losses is for traders who simply don't know what they're doing and, unfortunately, most traders don't know what they're doing. And if YOU don't know what you're doing it is better to use Stop-Losses. Even those self-appointed Gurus on UA-cam don't know what they're doing. Since I've learned about Patterns, The Elliot Wave Theory, the difference between an Impulse Wave, Motive Wave, ABC Correction, Prechter, Ending Diagonals, Wedges, Triangles, Gann Theory, Pivot Tables, Moving Averages, how to apply different time charts, etc, I don't use stop-losses anymore because I KNOW what I'm doing!
and.. Be sure to network with friends of similar interests in trading, there's nothing worse than feeling isolated when you make investment decisions.
So true. I've lost quite a lot because of tight stop losses...thank you for confirming this!
It depends on your style of trading if you're a scalper or intraday trader trading 5 mins chart then it's compulsory to have a stoploss. You don't want a buster in your equity curve. One bad trade and you're again back to zero. Not having a stoploss can work in swing or short term trading but avoiding a stoploss in scalping and intraday trading is a big no no.
The problem is not tight stop losses, the problem is people have this weird delusion that you only have one chance to place a trade. Put the stop tight, and if it goes really against you you are safe and if there is another point to enter on the same direction, enter again with another tight stop and if this time it goes in your favor then you only lost that initial tight stop and your risk to reward ratio is much larger,
Truth that. My strategy as well. A stop makes you feel much safer when your trade is over 100k+
when i removed my stop loss, i keep winning already
I take 20 positions and put 20% SL on each. When they move up 10% I reduce it to 10%. Worst case I break even or it continues to run and I move the SL up along with it. 20% seemed like a lot, but when you spread it out it is on average 20% of 5% of your portfolio in other words, 1%. All 20 of your picks won't crater at the same time. Some do, but it's better to take your loss and put what is left somewhere that it can make money rather than hope for it to bounce back.
If your scalping all day on 5/10/15 minute charts stops are no good and never use them, If you have to place stops then your unsure of your entry and shouldn't have done it, Stops are only for longer term and overnight trades which i never do anyway, As this bloke says it normally goes against you first then bounces your way.
"Stops are only for longer term and overnight trades..."
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Mark: No sir: I beg to differ. It is the intraday trading when stops are appropriate. Not overnight, especially so; for anything can occur with an overnight trade and this may plummet through your stop and open the next morning so far down it would be woeful -- *and, yet, you are still in the trade!*
If I'm in a long trade, I use "trailing stop" after a certain period.
Mark Carter Hi. I'm a complete beginner on trading. It is really possible to win regularly on mini sp500 day trading, or it is random? Thanks.
I disagree. If you have to place stop then you are SURE in your entry.