I never trade without a Stop..however a lot of my stops are usually wide and depend on the pair. Some pairs are more naturally fluid and whippy than others...and that has to be taken into acount when setting a stop.
Stops are a needed protection IMO for Forex trading--they protect your life-blood--your trading account. Without your life blood you cease to be a trader and then you need to transfuse new blood in to continue to live. If you trade without a stop you are basically counting on the blood to clot on its own without a bandage, disinfectant or pressure..when the "cut" (or forex move) is big enough tho--you can bleed out if you are not careful. All those gains you made--can be "gone in 60 seconds"....so to speak.
Stops during a trading week are honored by nearly every broker--so even if a pair blows past your stop in a sudden jump--you will be exited at your stop price (tho it may take the broker a few minutes to catch up with the move and adjust your account
)
The problem many traders face early on when using stops is figureing out where to place them exactly...this is what Trade Plans are for (see my older thread on trade plans
). LEarning where to place Stops and why is as just as much a learning experience as finding an entrance is. This takes a lot of practice and a lot of planning...you just don't pick a random number out of the air--you could be 25 pips away from a strong resistance and if you set your stop at 24 pips--you can be you will get stopped out...but if you set it at 30 or 35 pips outside the resistance area--you stand a better chance of surviving.
Whether your style is to trigger a trade based on technicals or fundamental speculations, or a mix of both, a stop is usually planned as well based on the TA info you have in a chart--this can be your Support and Resistance areas, a range area, Fibo's, EMA's etc etc. Just like I say in the Trade Plan thread--when you trade you should have a plan for everything--your entry, your stop, and your exit--and technical reasons to validate each of those points... Else its like driving on a highway with no plan on where you are going, and not knowing when its time to stop or check your direction, and having no destination in mind or even a reason for being on the road. Stops are not based on a time frame--whether you trade a 5 minute chart or 4 hour chart--a stop should be technically based, not time based. Setting a stop loss based on time or a whim will usually result in a stop being hit--and frustration on part of the trader. When you experience frustration in Forex trading--it means you are fighting the markets. Don't fight them-try to learn to trade with them--and accept each trade decision you make as a emotionless mechanical thing you do...otherwise it will just eat at your stress levels. When you make a trade--don't second guess yourself at every pip a trade goes against you--it was either a good trade or a bad trade and you can find the result out in hindsight. Learn from mistakes...see the reasons why things occur and where you did perfectly in your trade or where you messed up. I have been hit on a trade that just hit my stoploss and then went in my favor...and I have had a trade go against me only to reverse 2 pips shy from stopping me out and then it went into profit. Each trade should teach you something about that pair and about the market conditions. Forex is and can be a very repetative thing in the markets...charts often like to repeat themselves a couple of times in patterns and moves... Determining where and when those time occur is the challenge and will make you a better trader. If you take a trade and learn nothing from it--you're just driving on a highway without a destination or reason for being on the road.
JMO...
-w
