How To Become A Profitable Trader with stop loss and trailing stop loss

[david678345]

One of the mistakes that I am making and that prevent me from being a profitable trader is that I do scalping and I lose a lot of money with the fees.

But now I have discovered that binance offers the possibility to trade without commissions for a limited time. So if I set the stop loss at the same price as the entry price (or one cent below the buy price) it should be relatively easy to be profitable.

On the trades I lose I would only lose a few cents and on the trades I gain I would gain much more by using the trailing stop...this commission free trading sounds too nice to be true, doesn't it? is there a catch I don't know about?

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[jackg]

I thought it was only spot trades that were fee free?

You could try trading the way you plan to without fees but I don't normally notice fees when I trade so maybe it's the strategy that's problematic. Have you tried looking into trading based on things like support and resistance to try to get something more profitible - it should be a fast thing to learn with a bit of ta to give you a strategy you can then test out and make work (especially if you have the time to backtest it/practice)?

[Bitcoin_Arena]

I thought it was only spot trades that were fee free?

I think he's talking about spot

You could try trading the way you plan to without fees but I don't normally notice fees when I trade so maybe it's the strategy that's problematic.

Fees become quit significantly noticable when you do scalp trading especially if the Take profit is very low... like 0.1%

For example the taker and maker trading fees for a regular user on Binance are  0.1000% / 0.1000%. so if one is taking a profit of 0.1%, then the fee is eating up the profit on every successful trade.

[Hamphser]

One of the mistakes that I am making and that prevent me from being a profitable trader is that I do scalping and I lose a lot of money with the fees.

But now I have discovered that binance offers the possibility to trade without commissions for a limited time. So if I set the stop loss at the same price as the entry price (or one cent below the buy price) it should be relatively easy to be profitable.

On the trades I lose I would only lose a few cents and on the trades I gain I would gain much more by using the trailing stop...this commission free trading sounds too nice to be true, doesn't it? is there a catch I don't know about?

When doing up some scalping then setting out SL's that too shallow would really be somewhat pointless or useless considering on how volatile the price is then it would be easily be triggered out
and you would just be boggling up your mind that you should be repositioning again but of course you should set a little further with those SL's.

Trailing stop loss might do but i dont really come into this certain point.Just do and make out some trial and error according to your preference since
we do have different takings when it comes to commission fees and perceptions about volatility.

[Oshosondy]

On the trades I lose I would only lose a few cents and on the trades I gain I would gain much more by using the trailing stop...this commission free trading sounds too nice to be true, doesn't it? is there a catch I don't know about?

Know the fee the exchange you are using is deducting in percentage. Use it to calculate the total amount of fee that will be deducted from you in each trade.

I have noticed this before. Let me make you a good example

You have $5000 that you are trading with
Trading fee is 0.1%
The fee that will be deducted from $5000 = $5000 x 0.1 ÷ 100
                                                                          = $5

Assuming you have $3 profit already, once you close the position or converted back to a stable coin, $5 is deducted as fee.

So it would be $5000 + $3 (profit) - $5 (fee) = $4998

Remember that you are also charged for opening a position, or when you converted to an unstable coin for profit.

$4998 -$5 (used to open position or used to first convert to unstable coin for profit) = $4993.

Your $5000 would become $4993 after making $3 profit.

Likely this is caused by trading with too much amount of money and you want to close the trade very fast because of fear not to lose. Trade with the amount of money you can afford to lose and make more profit that would be more than the trading fee deducted before closing the trade.

I thought it was only spot trades that were fee free?

It depends on the exchange. Spot, margin or future trading can have no fee, but there can be some tasks attached to it. Some can even be in form of rebate, in a way you will trade and earn some amount, instead of deducting fee, but those are for VIP on most exchanges.

[blockman]

They do that for a set period of time, so it's like a limited offer, and then will go back again with the usual fees that they take for each trade.
There's nothing you should lose upon doing scalp trades if you're at win most of the time. IMO, the fees per trade you make don't really hurt that much if they're just a couple of cents. But to understand the structure of the fee, always check the details that can be found on their website.

[crwth]

Everything you have mentioned in your thread, OP, can easily be fixed with a trading bot like Gunbot. ^{[I am affiliated with them, and if you do plan to check it out and have questions, don't hesitate to PM me; I'll help you]}

It could easily calculate and scalp for you, depending on your chosen strategy, and will ensure that you have profit in your trading.

As long as you are using BNB and use Limit trades, you could save fees. They are just probably offering this to have more volume in their exchange. I don't know what else could be behind it.

[adaseb]

If you are spot trading and can't make a profit due to fees then there are a few reasons why.

1) You are using the wrong exchange. Most likely you are using an exchange not meant for active trading but instead long term investing. Some of these exchanges like Gemini charge like 1-2% per trade. So automatically you use 2-4%.

2) You are way over trading. If you are using an exchange like Binanace and can't make a profit this way. You are taking way too many trades and closing them too early. Overtrading is not good for trading.

[topman21]

In order to trade you must be aware of various aspects of trading.Nonsense trading cannot be done. If you start trading without understanding about trading, but start trading, you will definitely get caught.And stop loss plays the most important role in trading platform.Stop loss must be used especially in futures trading platforms. Otherwise you will never know when your money is gone.

[Bitcoin_Arena]

1) You are using the wrong exchange. Most likely you are using an exchange not meant for active trading but instead long term investing. Some of these exchanges like Gemini charge like 1-2% per trade. So automatically you use 2-4%.

That's so huge mate, unless if you are referring to crypto to fiat trades. Any exchange charging that high for crypto to crypto pairs would be out of business in very few years.

According to this, they charge 0.40% for taker and 0.20% for marker for a low tier account. Still so high IMO  

2) You are way over trading. If you are using an exchange like Binanace and can't make a profit this way. You are taking way too many trades and closing them too early. Overtrading is not good for trading.

What's a scalper supposed to do?


Good news OP, bybit also now has a zero fees spot trading for some trading pairs until further notice. take advantage - https://www.bybit.com/en-us/promo/global/zero-fees-spot

[Scripture]

Traders doesn’t focus that much with the fees, they are too focus analyzing the chart and knowing their positions. If you really want to be good in trading and want to be more profitable, start doing the right thing like learning how indicators work, knowing when to buy and sell are very common and with that you can just cover those fees from your winning trades. Regardless if its free or not, that can’t still change your trading skills, better to improve it first.

[rby]

Traders doesn’t focus that much with the fees, they are too focus analyzing the chart and knowing their positions. If you really want to be good in trading and want to be more profitable, start doing the right thing like learning how indicators work, knowing when to buy and sell are very common and with that you can just cover those fees from your winning trades. Regardless if its free or not, that can’t still change your trading skills, better to improve it first.

Traders focus more on strategies, charts and fundamentals and not on fees. Before you start trading you should make good research about the good exchange based on security first and then fees can come in.
Responding about the stop lost discovery of Op, I have been using that strategy but I was hit some time when I believed that there is more to stop loss than traders know and I have stopped using stop loss.

[GeorgeJohn]

One of the mistakes that I am making and that prevent me from being a profitable trader is that I do scalping and I lose a lot of money with the fees.

But now I have discovered that binance offers the possibility to trade without commissions for a limited time. So if I set the stop loss at the same price as the entry price (or one cent below the buy price) it should be relatively easy to be profitable.

On the trades I lose I would only lose a few cents and on the trades I gain I would gain much more by using the trailing stop...this commission free trading sounds too nice to be true, doesn't it? is there a catch I don't know about?

What i will tell you is that, the measurements or the ratio you are using, will make you not have a good profit if actually you are making a profit, and people who is using this method of your's basically they are upbrings in trading.trading is all about risk, so that whenever you are making a profit, your Profit will be huge. Try to educate yourself more well in trading so that won't end up losing much amount of money.

[Rengga Jati]

One of the mistakes that I am making and that prevent me from being a profitable trader is that I do scalping and I lose a lot of money with the fees.

Scalping may be worthy if we really can do it in the right time and strategy, but in fact, none will run very well because we still use the third party, in whcih sometimes, they are too long in transaction, transfering, and also high fees. Moroever when the price suddenly dropps, that is part of the risk of scalping.

But now I have discovered that binance offers the possibility to trade without commissions for a limited time. So if I set the stop loss at the same price as the entry price (or one cent below the buy price) it should be relatively easy to be profitable.

Do you mean Trading in the Spot market on Binance? not the future market, right?
Trading in the Spot market does have a lower risk compared to other types of trading activities. But that does not mean zero risk, yes. And in this case, it seems that on Binance there are still trading fees, but they are quite small, around 0.1% (see: Fee Rate. But indeed here we can really set at what rate we want to get profits even in a period of time that we ourselves cannot predict exactly at all. But at least we can also install SL/CL to minimize a lot of losses because after all we still have to rotate the money for other trading activities.

[palle11]

So if I set the stop loss at the same price as the entry price (or one cent below the buy price) it should be relatively easy to be profitable.

It makes sense to put stop losses only when the price is already beyond the channel boundaries or breaks some kind of formation. Putting a stop loss in the same place where you opened the trade is like shooting yourself in the foot. Absolutely illiterate risk management.

Setting of stop loss just close to entry price is risky. Following from what @ Ratimov said, putting sl at trend areas or at the trend means price can easily retest those points and take you out easily for loss. I suggest that sl are better behind support or resistance. Support and resistance are strong areas that are not easily broken instead of placing sl at close to entry or at the middle of trade. Learn to use stop loss behind support and resistance.

[tvplus006]

One of the mistakes that I am making and that prevent me from being a profitable trader is that I do scalping and I lose a lot of money with the fees...

There are such decentralized and centralized exchanges where no trading commission is charged. For example, no commission is charged on Dydx.exchange if the trade turnover does not exceed 100 thousand dollars. As for CEX, there are no trading commissions at all on the Quantfury exchange. These exchanges are given as an example and you need DYOR.

[pawanjain]

One of the mistakes that I am making and that prevent me from being a profitable trader is that I do scalping and I lose a lot of money with the fees.

But now I have discovered that binance offers the possibility to trade without commissions for a limited time. So if I set the stop loss at the same price as the entry price (or one cent below the buy price) it should be relatively easy to be profitable.

On the trades I lose I would only lose a few cents and on the trades I gain I would gain much more by using the trailing stop...this commission free trading sounds too nice to be true, doesn't it? is there a catch I don't know about?

If you set a stop loss at the same price wouldn't the order get executed in less than a minute.
We know how volatile the market is and 2% - 3% fluctuations are very normal in crypto.
Although trailing stop loss is a good feature you should reconsider your strategy and plan accordingly.
Try making a few practice trades and then consider investing bigger amounts.

[palle11]

Although trailing stop loss is a good feature you should reconsider your strategy and plan accordingly.

Trailing stop is good but it has it own disadvantage also. If the stop loss is done, the trade direction can go on but you will be out already.

If you set a stop loss at the same price wouldn't the order get executed in less than a minute.

Setting a stop loss very close to entry price or same price will not be possible because it will not trigger or activated if you don't allow for certain space between the entry point and the stop loss because the platform has some charge on the trader.

[pawanjain]

Although trailing stop loss is a good feature you should reconsider your strategy and plan accordingly.

Trailing stop is good but it has it own disadvantage also. If the stop loss is done, the trade direction can go on but you will be out already.

If you set a stop loss at the same price wouldn't the order get executed in less than a minute.

Setting a stop loss very close to entry price or same price will not be possible because it will not trigger or activated if you don't allow for certain space between the entry point and the stop loss because the platform has some charge on the trader.

Yes ofcourse, everything has their own advantages as well as disadvantages.
Trailing stop loss has some disadvantages too but every other order type has it too.
It just depends on the individual on what is their preference for the same.

[Johnyz]

On the trades I lose I would only lose a few cents and on the trades I gain I would gain much more by using the trailing stop...this commission free trading sounds too nice to be true, doesn't it? is there a catch I don't know about?

You can see trading paying more on the fees if you are losing money, but when you start making money out of it most probably you wont look at the fees anymore because that can easily be paid off by your profit. Trading is too risky, fees can totally eat all your capital if you do trade carelessly, so learn how to be more effective, learn how to use different indicators that can help you on making a decision, in trading those who have a good strategies will always win on any market situation. Trading is very reward but first, you must invest on the right knowledge and be more patient because trading is not that easy.