Trading without stop-losses?

[Alb]

I've seen some people advocating that we should not use stop-losses.

What are your thoughts on this?
Do you use stop losses?
How do you use them?

Anyone here trade without a stop-loss?

What's the benefit of using a stop-loss, what's the downside?

[lori]

thats a really good question. the downside is obviously u get taken out of the trade, sometimes when the market hasnt really changed direction. the upside is that it keeps emotion out of the trade and u r trading an actual plan. the problem ive had personally, is that if the market is volatile, i get stopped out.(hate it when that happens!) but for me thats better than getting emotional and giving the market one more chance to go my direction-lol!! watching the price action w the highs and lows has really helped me. so if i'm going long, i put the stop at the last low on the timeframed chart that i'm trading off of. if i'm shorting, i put it at the last high. its best if those stops are close to fib levels too. but this way, i know exactly what dollar amt i am risking and can judge whether the trade is worth it. sometimes that shows me that the risk is not worth the trade potential profit.
i'll be happy to see how other traders do it, too, sometimes it can get confusing. good luck to you!!

[uz2kid]

Stop loss help you to save your account. If you decide not using stop loss, your risk is too big. The volatility at the market is your very-very big enemy. If your position against the market, and you decide not to set stop loss, you will loss a lot, and sooner or later, you will get broke.

I suggest you to train yourself to set stop loss at every transaction you make with your virtual account.

[Lifesong]

Any trade we enter into should be based on an analysis we made at a certain point in time and my view then, is to already identify a potential profit target as well as a stop loss. This way it is clear that if the analysis was correct the profit limit should be hit and if the analysis was wrong then your stop loss is the safety cushion (allbeit a painfull one -LOL). It is critical to keep events like 9/11 or other potential global events that could influence the trade in mind, because market movements are extreme when such events and your only safety precaution is the stop. In light of this I believe a trader trading without stops is not a trader but a GAMBLER!!:eek:

[Justin]

I learned an expensive lesson a long time ago with a little company named Enron. I never used stops and it cost me a lot of money. I rode Enron up and had the delusion it would keep going up - (I listened to one of those market "soothsayers" who charge you for their advice and deliver absolutely nothing.) I lost all of my profits and all of my capital in the trade. :mad:

It made me extremely frustrated and caused me to dump the soothsayer, and begin a journey of learning how to do this myself (hell, I couldn't do any worse!) I religiously use stops now - better to get stopped out and live for another trade, than to lose it all.

One thing I can say about stops - use them. :cool:

Good luck,
Justin

[FibMaster]

Here is an example of when *NOT* to use stops. Or better, this is an example of when not to trade!

During holiday markets, the volume is thin, and the emotional novices are distracted (they are great for your trading). The remaining traders are pros, or die-hards. Your vulnerability increases. The price action will leave a trail of exploitation.

Look at the 15 minute chart below, of GBP/USD. See how the chart spikes up for a few trades, then nothing happens and it falls back. Someone got burned! Someone took advantage of some stops.

During thin markets, your stops are more likely to get hit, and strange anomalies occur. I've experienced this before. Spreads widen, and Bam suddenly your stops are executed, and then the chart returns. It can be very painful.

Avoid trading in thin markets!

[curgeor09]

Hello all

This is my first post on this forum a would like to start a thread which can collate ideas for an automated trading system that will recognize Higher highs, higher lows. lower lows, lower highs and divergence.??

Any ideas on how to best do this??