Tips for trading strategy in STOP LOSS

[tvplus006]

...As we know, Bitcoin doesn’t fall very low, and always more people will buy it to increase the price again. Hence, in this manner, you can really make a good profit. You just have to make sure that you have good balance for the trade and the leverage is in control.

Do you think that a 20% price reduction in just one day is not a big deal for Bitcoin, as it was just recently, on August 4? And if you add x10 leverage to this, it is easy to understand that in this case the trader's deposit will be liquidated. And when I see that the liquidation at the dump was $1 billion, I understand that these traders ignore the use of stop loss.

[slaman29]

Have to agree. Any trader that says don't use stop loss is a bad trader. It is simply irresponsible to teach or advice that. Like you said, the only situation where there's no SL required is holding. Then again, true holding doesn't even need an open order

Plus having an open orders will have fees. You don't need to pay the exchanges merely for holding. There's also safety and security risks for holding your capital in those exchanges. They should be paying YOU for giving them your trust and taking such risks.

And that's not even talking about the "goodbye" risks exactly. You can lose it to a hack, lose it to a rogue CEO, so many ways to lose money, people just don't understand until they are bitten. Look at this forum, in the old days, very experienced and early BTC adopters held on MtGox it's unthinkable now!

What is a 'good trading pair' anyway? So good that there will not be flash crashes? Futures is where leverage people go to play, no SL is suicide.

It's where 90% of people learn, the hard way, that they're actually gambling.

I WISH 90% of people learn they're actually gambling. I see traders after 5 years, after 10 years, doing futures on x100 leverage without SL and they still think they're trading.

[justdimin]

And that's not even talking about the "goodbye" risks exactly. You can lose it to a hack, lose it to a rogue CEO, so many ways to lose money, people just don't understand until they are bitten. Look at this forum, in the old days, very experienced and early BTC adopters held on MtGox it's unthinkable now!

Unfortunately those people are even mostly aware of the mistakes they are doing and they just consider it as just a risk taking and when they label it as taking a risk they think that they are doing something right. Because they could potentially make some money and because of that they think it's fine but the reality is that we are making a mistake if we are not doing this properly and because of that we can't really consider this as a good thing just because they label it taking a risk.

It is not risk taking, it is gambling and they are doing it because they are bored of small income they can make. Making 20-30% even 50% a year is boring in crypto after you work so much, so they want 100% in a day and just get rich in a year and retire, which is not going to happen at all and we can't really jump into making that much money, it's unrealistic and becomes gambling when we do that and we should avoid that if we can, that is the most important part.

[slaman29]

And that's not even talking about the "goodbye" risks exactly. You can lose it to a hack, lose it to a rogue CEO, so many ways to lose money, people just don't understand until they are bitten. Look at this forum, in the old days, very experienced and early BTC adopters held on MtGox it's unthinkable now!

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It is not risk taking, it is gambling and they are doing it because they are bored of small income they can make. Making 20-30% even 50% a year is boring in crypto after you work so much, so they want 100% in a day and just get rich in a year and retire, which is not going to happen at all and we can't really jump into making that much money, it's unrealistic and becomes gambling when we do that and we should avoid that if we can, that is the most important part.

20% a year would be amazing, I don't think anyone would make that even if they were a Grade A trader. To consistently make 20% a year, bull or bear, not even the world's top funds in crypto have made that much which also tells you, that they themselves are also taking gambling approach.

You know who makes 20% average long term? Holders

[RockBell]

I have another opinion regarding stop loss. If you are trading futures and choose good trading pairs, then I would advise you not to put any stop loss. Instead, set “take profit” at a certain percentage. For example, you can take the trading pair of BTC/USDT and can always open a LONG trade whenever you find BTC under 55k. As we know, Bitcoin doesn’t fall very low, and always more people will buy it to increase the price again. Hence, in this manner, you can really make a good profit. You just have to make sure that you have good balance for the trade and the leverage is in control.

Stop loss is actually a great measure against any disaster that might occur  so that you won't be losing more than expected because when you do futures their are various occasions that you will lose money but when you have your stop loss is place. And I know that their situation that you will want to risk and do take profit but when you are taking profit i will go with the suggestions of always going with the pair  of BTC/ USDT and if you looking at this are small information that you need to trade and take long under 55k is might make you profit because you won't always be the lucky one. But when you understand the needful when to take risk you do stop loss and that will be determined by the result you are getting from your technical analysis, and that ia why studying ia very important. With this knowledge you will be able to put everything under control and any way you just have to always cut your loses short.

[alastantiger]

It's definitely better to make a small mistake with taking a small loss if the trade didn't go as expected, than punishing yourself into holding the position with a bigger loss while waiting for the asset to recover. Your position will either get liquidated, OR you will take the bigger loss because you want the "punishment" to stop. Hahaha.

It'll be better if the market wasn't going to recover but if the market is going to recover, you're better off hodling than selling. To make this decision we have to consider the project that we're trading. For Bitcoin trade, there's a certainty that the market is going to recover and you don't have to sell to minimize your loss when you can hodl and maximize your potential gains. The project that we're trading should decide the decisions we're to make and not to view all the projects as one. Trading altcoins, it's better you sell to minimize losses and reopen the trade later.

Stop loss is a vital option to have when trading and for those traders that are trading without a stop loss, they're taking very big risk as there will be no leverage that they're going to have against the market when it's dumping. Stop loss should be fixed about 10% from your entry price and that's all I can add for now.

[SamReomo]

I personally try my best to avoid stop losses and fix my position with averaging but sometimes using of stop loss is necessary and in such times I use first type of stop loss strategy that OP mentioned. I believe most traders use the 1st type that's percentage based stop loss, and instead of 2% I sometimes risk 5% to see it the market shifts or not if it doesn't then my stop loss order gets triggered otherwise I hold the position until it becomes green in PNL.

[tvplus006]

I personally try my best to avoid stop losses and fix my position with averaging...

Of course, each trader adheres to his own strategy, but if you average a position, then you increase the risks in this way. And if, as a result, the price moves in the opposite direction to your expectations, your loss will be as many times higher as the amount of the order you have increased.

[X-ray]

I personally try my best to avoid stop losses and fix my position with averaging...

Of course, each trader adheres to his own strategy, but if you average a position, then you increase the risks in this way. And if, as a result, the price moves in the opposite direction to your expectations, your loss will be as many times higher as the amount of the order you have increased.

averaging in future contract is like trying to get ourselves bankrupt, people can average as much as they can but there's always chance the market just keep going on opposite direction of our position, SL is more effective in managing risk, if our SL hits and want to reopen position, we can just reopen with better price and got the head start plus remaking technical analysis on top of that.

been doing exactly what he's doing in the past, it might seems good with averaging, we keep increasing our average price, but there's always a catch, this strategy only works for people with unlimited money to keep maintaining their margin.

[tvplus006]

...been doing exactly what he's doing in the past, it might seems good with averaging, we keep increasing our average price, but there's always a catch, this strategy only works for people with unlimited money to keep maintaining their margin.

This opinion in relation to averaging comes from the fact that sometimes after averaging, the market turns around and the trader gets the best entry price into the position. But this solution is comparable to a casino. Ideally, it is necessary to wait for confirmation of such a reversal and only then open a new position.

[Mr. Magkaisa]

Have to agree. Any trader that says don't use stop loss is a bad trader. It is simply irresponsible to teach or advice that. Like you said, the only situation where there's no SL required is holding. Then again, true holding doesn't even need an open order

Plus having an open orders will have fees. You don't need to pay the exchanges merely for holding. There's also safety and security risks for holding your capital in those exchanges. They should be paying YOU for giving them your trust and taking such risks.

And that's not even talking about the "goodbye" risks exactly. You can lose it to a hack, lose it to a rogue CEO, so many ways to lose money, people just don't understand until they are bitten. Look at this forum, in the old days, very experienced and early BTC adopters held on MtGox it's unthinkable now!

What is a 'good trading pair' anyway? So good that there will not be flash crashes? Futures is where leverage people go to play, no SL is suicide.

It's where 90% of people learn, the hard way, that they're actually gambling.

I WISH 90% of people learn they're actually gambling. I see traders after 5 years, after 10 years, doing futures on x100 leverage without SL and they still think they're trading.

          -       Entering futures trading without SL but with 100x leverage is just putting their fund at risk, it's like they're just gambling and they don't really have an understanding of trading. Particularly if the matter is technical analysis.

A lot of funds are dissolved in futures that do not or do not use SL, especially if they are set-up on cross margin, their funds will be lost for sure.

[Wind_FURY]

You should merely follow your own rules and trade accordingly to avoid making bigger "mistakes". Preserving capital should be your first priority.

You are right. Afterward, it's essential to make it bigger, but if there are no funds or capital to try strategies out, there won't be a possibility for doing so.

?

It's essential to make what bigger? I was talking about stop-losses and how THAT makes trading mistakes "small" because stop-losses limit how much an individual might lose. It's not a comment about the size of the positions.

But for "trying" strategies, there's a back-test feature available in TradingView.

It's essential to stay responsible and true to yourself regarding different situations where you are tempted into something that may cause bad consequences in the future.

Stay responsible = Use stop-loss

[OcTradism]

It's essential to make what bigger? I was talking about stop-losses and how THAT makes trading mistakes "small" because stop-losses limit how much an individual might lose. It's not a comment about the size of the positions.

If a trader fails to understand risk in the market, importance of Stop-Loss order, and refuse to use this order to defend his trading capital, to either closing the position with a draw or minimal loss, it's big risk in trading.

If that trader fails to do that with a small trading fund, with a small-size trading position, he will fail with bigger trading capital and get bigger loss. Results would be the same with similar trading style.

There is also another weapon to defend trading capital: Stop-Limit order.

But for "trying" strategies, there's a back-test feature available in TradingView.

Yes, people who want to use trading scripts, bots, can do Back-Test and assess efficiency of the scripts, bots before using it with real fund.

Stay responsible = Use stop-loss

It's one of best weapons against massive loss in this volatile market.

One of the Best Weapons in Trading: stop loss order

[SamReomo]

Of course, each trader adheres to his own strategy, but if you average a position, then you increase the risks in this way. And if, as a result, the price moves in the opposite direction to your expectations, your loss will be as many times higher as the amount of the order you have increased.

Well, I often sell half of the position whenever price gets fixed and so far I haven't lost any money with my strategy. I'm someone who only trades Bitcoin with this strategy and sometimes a few less volatile coins, and I haven't yet encountered any loss with it.

I'm not in hurry in opening and closing of my trades and I believe that's the reason why I haven't had any losses with the strategy. Sometimes market moves pretty strangely then in such conditions it's 10x better to go with stop loss instead of averaging.

[slaman29]

It's one of best weapons against massive loss in this volatile market.

One of the Best Weapons in Trading: stop loss order

I have mentioned it before in the years of chatting on Trading forum here, I see SL as the basics. It's like, non-negotiable.

So I still find it weird that people trading can talk about SL as if it's the miracle making savior.

If you drive a car, before you even start the engine you put on seatbelt. It's basic driving 101. You even fail your driving test if you didn't do that. So imagine if drivers started thinking, 'wow the best weapon against injury/death in accidents is a seatbelt'. That would be stupid, right? You can say the best weapon is defensive driving, assisted supervision, good material in car etc. But the seatbelt is not the best weapon, it should be standard.

Same as SL in trading. If you're not using it, you shouldn't be trading. Period. It's not the best weapon, it's the prerequisite.

[Wind_FURY]

But for "trying" strategies, there's a back-test feature available in TradingView.

Yes, people who want to use trading scripts, bots, can do Back-Test and assess efficiency of the scripts, bots before using it with real fund.

It doesn't need to be for the use of trading scripts/bots. Systems traders can do their back-tests to find out if their strategies are feasible and profitable enough.

One example of a systems-based strategy is the Pi Cycle Top, and Pi Cycle Bottom. 

DYOR!

Stay responsible = Use stop-loss

It's one of best weapons against massive loss in this volatile market.

One of the Best Weapons in Trading: stop loss order

Plus use less leverage, or use enough for a portion of your capital, especially if you're trading in a centralized exchange.

[ethereumhunter]

          -       Entering futures trading without SL but with 100x leverage is just putting their fund at risk, it's like they're just gambling and they don't really have an understanding of trading. Particularly if the matter is technical analysis.

A lot of funds are dissolved in futures that do not or do not use SL, especially if they are set-up on cross margin, their funds will be lost for sure.

Only people who knows their skills that can use that high leverage because they know how to manage the risks. But if that people doesn't know much about futures trading, it is better they avoid the high leverage and they can try to make a small profit but it safe to do. They don't have to chase the profit with not enough skill because that can make their emotion affect and will disturb their trading moment. They can use small money first to see where the market moves and stick to that method will be good for them while they can learn more about futures trading. If they already familiar with futures trading and have a good skills, they can trying to increase their capital to trade but still control themselves in taking the profit.

[tygeade]

Only people who knows their skills that can use that high leverage because they know how to manage the risks. But if that people doesn't know much about futures trading, it is better they avoid the high leverage and they can try to make a small profit but it safe to do. They don't have to chase the profit with not enough skill because that can make their emotion affect and will disturb their trading moment. They can use small money first to see where the market moves and stick to that method will be good for them while they can learn more about futures trading. If they already familiar with futures trading and have a good skills, they can trying to increase their capital to trade but still control themselves in taking the profit.

That is unfortunate; most of the people who trade as well, they do not know much about the situation and they end up still doing whatever they please and that is the issue. If you are a veteran and doing some good leveraged futures then you could make some money because you know what you are doing, but that is only a small portion of the people and not the whole people and we should realize that majority of the people are just people who end up dealing with something they do not know and that is why they are losing money as well.

I believe that we need to focus on doing things that we know how to do and not deal with anything that will be risky. If you are not a veteran who did amazingly at spot trading first, then do not start doing futures with high leverages neither. The one thing about leverage is that you do not have to put up a lot of money to trade, with small amount of money you can earn so much, which makes people want to give it a try but usually they do not realize that you could also lose 100% of your money with one bad move.

[Mpamaegbu]

OP, the number four on your list – Support and Resistance Stop Loss is the only one I'm comfortable using and that's because I like trading lines that don't repaint. I set my SL above a supply zone or below a demand zone and let the trade run its course. It's bad trading habit to adjust SL, no matter what.  Traders who hope for reversals by adjusting their SL often times regret that action. Hope is a terrible thing in trading. If you can't trade what you're seeing on the chart, then don't trade. It's a part of trading discipline.

[ethereumhunter]

That is unfortunate; most of the people who trade as well, they do not know much about the situation and they end up still doing whatever they please and that is the issue. If you are a veteran and doing some good leveraged futures then you could make some money because you know what you are doing, but that is only a small portion of the people and not the whole people and we should realize that majority of the people are just people who end up dealing with something they do not know and that is why they are losing money as well.

I believe that we need to focus on doing things that we know how to do and not deal with anything that will be risky. If you are not a veteran who did amazingly at spot trading first, then do not start doing futures with high leverages neither. The one thing about leverage is that you do not have to put up a lot of money to trade, with small amount of money you can earn so much, which makes people want to give it a try but usually they do not realize that you could also lose 100% of your money with one bad move.

That is why we must always learn more about trading so we can know the situation and also know what we need to do based on the current situation. By learning more about trading, we can test one by one of the methods that we know so we can see which method that may work in the current situation so we can use that to trade. We will have a chance to reduces the losing money in trading because we can analyze better and always trying to prevent the mistake.

Focus is indeed necessary and important when we analyze so we can know the time to enter the market. We can also know how to deal with the risks not to becomes bigger because we will analyze deeper before we make a decision. We must familiar and understand how to trade in the spot trading so that will help us to analyze if we want to try to use futures trading. We must remember that we don't have to use high leverage if we don't have much skills in analyzing because that can make us lose the money.