Secrets of your broker - page 4
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Well firstly, it is not clear what your answer is when you are asked why you open stops, you know that stops are a direct route to losses and rarely to profits.
Secondly, if you do not know how to take profit, maybe the market is not for you? And the third, you need a good broker or bank to work well. Without it the trade is doomed to failure.
If you are addressing me, you have not read the text carefully. Read it again.
What kind of stops are you talking about?
There is a difference between stops to limit losses and stops to open positions.
Be more specific.
I am happy with my trading results so far.
I had an interesting conversation with a trader about how to set a stop loss correctly. He mentioned that stops are better set in the mind (mental stop losses, Mental Stop), but probably didn't explain why very often. What are the advantages of Mental Stop Losses and why you should put them out and how.
What is a Mental Stop Loss?
Normally, when you place a stop loss, you do so in your platform, where your broker can find out about it. A mental stop loss is one that you do not physically place in your platform and it cannot be closed automatically.
Let's say you open a long on the EUR/USD at 1.16000.
You could place an automatic stop which will close the position as soon as the price reaches 1.15950, or you could use a mental stop loss. Remember though, when using a mental stop you need to monitor your position, as instead of a normal stop loss you will now set alarms, which will signal to you when the market is close to your stop loss level. And then when your alarms go off, you need to go back to your computer and closely monitor the position to decide whether or not to close it.
How to set a Mental Stop Loss? You need to do a few things.
Figure out what your risk limit for the position is
. If you are not going to sit at your computer, set an alarm a specified number of pips before your maximum risk level is reached.
That's basically it. You want the alarm to give you a little advance warning before your stop level is reached. If the price moves fast, you will know it can go quickly further, and that is a potentially dangerous situation. Of course, the level at which the alarms are set depends entirely on your situation. If you're going to bed, you should set more alarms. If you're just surfing on youtube, less (because you're nearby).
But if you are going to monitor a position continuously, it is clear that you do not need signals at all.
A mental stop is not a mental stop, a stop is placed if you want to lose pips or time and there is no other reason to do so.
If, for example, I buy a pullback (which is not desirable), then I put an obligatory physical stop on the limit, as you said (sorry for pips or no time).
But a mental stop is just like a mental stop - it is safer if I trade following the trend.
So it all makes sense to you. And I see it.
According to some respected traders from overseas forex market maker brokers, SaxoBank is the most frequent stopgap trader via non-market quotes.
It has positioned itself in the market since 1992 as a leading international bank, specialising in online investments in the international capital markets. Saxo Bank offers its clients the opportunity to trade currencies, shares, CFDs, futures, options and other derivative instruments; it also provides trust management services.
Along with the merits of Saxo Bank as a broker, there are some drawbacks which make you to think twice before dealing with them. There are some negative aspects in the process of trading, and regularly. One of the significant disadvantages is that traders' stops are knocked off.
One time is an accident. Two or more times - pattern.
Readers should note what Saxo Bank writes about itself (advertised on the home page of http://www.saxobank.com/ ) :
Saxo Bank specialises in providing professional services in the international capital markets, offering private traders and financial companies the most advanced investment and cooperation models.
Saxo Bank is a licensed financial institution with full banking status. The Bank operates under the supervision of the Danish FSA, the highest financial regulatory authority in the European Union.
According to independent forums, there is an opinion that their managers are very active in attracting new clients, calling frequently and asking "how are you doing" etc.
And when you open an account the situation changes, the attention to the trader gradually diminishes and is reduced to zero. And then questions and emails are answered reluctantly and later forgotten altogether.
Also inconvenient is their own platform (only the Internet Explorer 5.5 browser is used, it often freezes). In addition, it is not possible to place a stop loss far away due to technical limitations. There are also other annoying features. For example, in SaxoTrader there are messages with an unclear content, such as "this bank sells to such and such a level".
Forex fees and commissions are also not trivial: the commission is charged at 10USD to cover administrative costs when executing transactions with currencies below the minimum volume (minimum Forex lot 5000).
Serious doubts are caused by the company's contract which is provided in English only. Therefore it is difficult to know the details of the contract. The only thing that was mentioned by the manager of the company is that the agreement is "standard" and they disable access one minute before the news and turn it on after the news.
The above facts make it clear what "professional" services the bank specialises in and what "perfect" models of cooperation with clients are offered. What is also particularly noticeable is how closely the FSA, the EU's supreme authority for financial regulation, monitors the bank.
The bank has a strong advertising department: if you lose the Sachsobank link, you will find it easily in the many advertisements on the Internet. The customer service is excellent: they will politely and culturally advise you on anything before you open a live trading account, call you back repeatedly and ask if you have any problems when transferring funds to them.
They also provide excellent technical support: they constantly call to ask how they are doing and send greeting cards.
I don't usually put a physical stop on the limit if I'm trading in the direction of the trend.
If, for example, I buy a pullback (which is not desirable), then I put an obligatory physical stop on the limit, as you said (sorry for pips or no time).
But a mental stop is just like a mental stop - it is safer if I trade following the trend.
So it all makes sense to you. And I see it.
I don't understand what kind of "mental" SL is this?
If we are so scared of a broker, any programmer will write an owl on "virtual" stops for 10 quid. The trader draws a line on the screen, the owl closes. If necessary, the owl will close. What is there to stare at the screen?
If you are absolutely paranoid about "peeping" broker in your terminal, put a bunch of lines, name the required line with the right name, the robot will recognize it as an SL.
Psi. And on the topic of the topic - no need for the broker to invent anything. Most traders, and beginners for that matter, by their own actions drive their deposit into a hole. Most traders and beginners themselves are driving their deposits into the pit by their actions.)
Who are you talking to, dear man?
If you are addressing me, then you have not read the text carefully. Read it again.
And what kind of stops are you talking about?
There is a difference between stops to limit losses and stops to open positions.
Be more specific.
I know how to extract profits, you can look at the signals.
Too bad I didn't keep my past accounts. I would have seen what they said at the time.
But you can watch the evolution of these three.
The interesting thing is that when I think about how to answer this question, I look closely at the very person who is asking me about it.
Anything you have written thereafter for a beginner would be useful to read and let's consider it as your answers to a beginner. But an experienced trader already knows this and does it, so what do you say to him about stops, why do you open them? Are you just unsure of the right direction of the position or you just feed the monster, or what is your version?
The interesting thing is that when I think about how to answer this question, I look closely at the very person who is asking me about it.
Anything you have written there below for a beginner would be useful to read and we will consider it as your answers to a beginner. But an experienced trader already knows this and does it, so what do you tell him about the stops, why do you open them? Are you just unsure of the direction of the positions or you just feed the monster, or what is your variant?
And yes, I also agree about the fact that when the market moves strongly, it is often impossible to close a position without a physical stop. I have got into it myself many times.Well, I put mental (not physical) stops on the limit. I'm not a big fan of robots and using different scripts (and "owls"). I trade mainly with my hands and head. If I'm not sure - I set alarms. Even if not in front of the terminal, price changes come by E-mail and SMS. Then I boot up via my smartphone and assess the situation. This is the possibility that if it is mental, you can judge from your own experience what is going on and not to close a position. What you cannot do if the price touches a physical stop.
That's why I try to trade not short term (though it does not always succeed). In general I open minimal lot by trend so as not to miss the movement in trend direction, I hold this minimal lot until the end of the victory. If price moves in the required direction floating profit appears. But it is not big. I am not happy about it. I want to increase volumes. I therefore tolerate drawdowns at any rate, because the main trend is correct. The drawdown is part of my TS. And the concept of "tolerating drawdowns" is not something awful for me, because I suffered more than one drawdown. In Forex, you don't always jump to the price without it. It often happens that while trader waits for the convenient moment for entering, the Market continues to move in the necessary direction without any stops and position is still not opened. Therefore, entering is performed at any market movement.
As the price moves against me I gradually pull Sell Stop. At a decent distance. The pullback (correction or drawdown) should be significant for patience. Sell Stop follows the price at a decent distance. And in this situation, if Sell Stop is pulled up from below the price, then there is no stop loss limitation, neither physical, nor mental, from above the price. That allows, as a rule, not to run out of the market senselessly. And calmly wait for the correction, and we can happily observe how the tactic is correct. And the profit on the open Sell Stop position confirmed it. As for the minus on the first open position, I've already mentioned before, it will melt so quickly that the price has no time to return to its level before the total profit of this position will exceed the minus.
The interesting thing is that when I think about how to answer this question, I look closely at the very person who is asking me about it.
So what do you tell him about the stops, why do you open them? Are you just unsure of the direction of your positions or are you just feeding the monster, or some variant of your own?
Almost above I wrote, that if you are itching to trade, for example to buy a pullback in a general downtrend (instead of selling it), which means trading against the main trend, a physical stop on limiting losses is necessary and obligatory. Because it is impossible to calculate when the pullback will end. It can be seen already on the fact. Suppose I buy a pullback. The price moves and it is followed by a hard physical stop (or Trailing Stop). What is wrong with that? Rather the opposite. In this case it is necessary.
If I am selling a pullback (in a general downtrend), which is a trend trade, then a stop to limit losses in this scenario is inappropriate and even harmful. Why is it needed here at all if the pullbacks are being sold...
Even if the price "jumped" by a false pullback, and, having hit my Sell Stop, continued to correct, it does not scare me. Because there is a possibility to increase the potential profit, having tripled the volume. Well, how much longer it will roll back...? We don't know exactly, but we know that not for a long time (in terms of the main trend).
If the forecast is correct. If the trader believes in his prediction. If the trader is psychologically prepared, he/she does not need stops. Small volumes in each of the individual positions allow them to grow through drawdowns. Even if slowly, but methodically, the trader will take all of the 100% movement with very tangible results.