How to trade Forex Profitably without Stop Loss

Forex Trading Nigeria

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Posted by on Thursday March 1, 2012 16:45:53:

Are you serious? My advice to you is don't!

Never enter into a position without using a stop loss. A lot of forex traders have been literally burnt for not using stop losses. Stop losses are like the minimum loss you will be willing to accept to get out of a trade if it goes bad. It is the price at which you will be willing to go out of a bad position or accept minimal loss rather than continue losing and depleting your Forex resources.

There is an example of a forex trader in Nigeria who made a lot of profit from forex trading. Ifeanyi started trading with $500 in his account and within a month he grew it to $2000. In 2 months he was able to grow his funds to $6000 all without using the frustrating stop losses. He rarely used them but the only thing is that he enters the market early and leaves early by trading long while at the same time enters the market late and leaves late by trading short. He was able to grow his funds easily although he had some losses but he always believed he entered at the right price given the market conditions and the news. But one day he lost $5000 within 6 hrs simple because he did not have a stop loss and his funds kept on depleting because he still did not accept his loss and get out.

My advice is that even if you are frustrated tradeing with a stop loss since it appears that stop losses make you exit early while the market then goes in the same direction you were going before the loss. The best thing you can do id to use stop loss without making it too restrictive. Setting stop loss with a range of ten pips in a spiralling market can be tough since prices may go up and down consistently and may keep on showing red digits in your portfolio. The best thing you can do is increase the range of your stop loss for eg to 50 pips. Before doing this, you need to ensure which direction the market is going based on the news. You increase the range ot your stop loss to say 50 pips or so or set your exit price to cut losses at say $50 or $100 a day depending on howm uch you are willing to sacrifice suppose your position goes bad. 10 pips stop losses tend to close more frequently and are more preferred when the market is less volatile.

Still want to trade Forex without using exit stop loss?: Well here are my tips if you really really want to do this:

  • Make sure you know the market conditions before entry eg bull or bear

  • Try to enter early and leave early

  • Don't overshoot your profit

  • Use Early bird forex system

  • Don't stay in a position for too long

  • Watch your trade closely. Don't abandon it

  • Exit the trade manuallly if you start losing too much