Manual trading and automated trading: Stop loss does not necessarily increase; the mechanism as capital increase

If you’re doing stop-loss and can’t add capital

there's nothing else to do but focus on poker-like trading through averaging down

Stop-loss does not necessarily fix losses

if there is a sudden move, the loss can be recorded as stop-loss just as is

This is what happens when a real estate company president trades

when stop-loss moves abruptly and incurs large losses, it is recorded as stop-loss

and because of that loss, the real estate company ended up closing down, remember

That’s the true feeling about stop-loss

On the surface, stop-loss is considered high quality

basically, you must understand that it always carries latent risk as its true motive

If you use zero-cut as stop-loss, even with sudden moves

you’re safe, so it’s recommended

Also, if you ultimately want to go with momentum trading, automatic trading is recommended

It would be good to run automated trading on a desktop server using a VPS

Nowadays there are dedicated desktop-like servers from name.com, I think

So it would be good to use that

As indicators for momentum trading

Williams Percent Range 14

Bollinger Bands 14 1σ

Envelope 14

Default values reasonably generate momentum trading signals

Also, since the number of trades becomes large, the latent risk is big relative to latent return, which is a problem

I personally recommend a 5- or 15-minute chart, preferably 15-minute

On a 5-minute chart, the trend is really strong when it appears

but the number of trades increases

Also, you must consider

・Allow hedging

・Position count unlimited

This is necessary

Some brokers do not allow hedging, saying that if you have a long position you cannot open a short position

Also, as I’ve written up to here

in practice it’s better to keep it to one trade, like a single-strap

Trend-following trading is enough with one order as a reserved order

The loss possibility with manual trading and with reserved orders isn’t that different

In other words, whether manual or reserved, performance isn’t much different

Therefore, as long as you have stop-loss

even if the market moves in the direction you want and the stop-loss recorded the position as a loss

the important thing is the ability to accept it as inevitable

Because stop-loss fixes risk

Fixing risk cannot suppress latent risk

latent risk means sudden moves cannot be restrained

For example, with a reserved order

a sudden move may cause you to take a position abruptly

and encounter a highly volatile spread

and the loss is recorded with the spread staying high

This phenomenon occurs

This happens rarely; if you watch the market you’ll understand

Stop-loss does not fix risk

In reality, it is made of appearance and reality

Therefore, you trade momentum automatically

Because if a sudden move comes in momentum trading, that is the end

Loss is recorded and ends,

In trades that continuously enter momentum to capture the trend,

such states become prominent, hence the case for automation

As for taking profits, it lasts until the trend ends

The trend lasts quite a long time until it ends

For example, when doing automated momentum signals repeatedly

If you lose 1000 times, the subsequent gains become quite large

That will come

But judging those with manual or system trading is unrealistic

If you automate trading and the market continues, keep it going

And sense the market and take profits until the trend ends

That’s how it seems

People often insert limits, but

that often cannot exceed latent risk

For example, if you set 20 pips as stop-loss

and fail 10 times

The profit would be 200 pips

Suppose you hold about five positions

If there are three short and two long positions

If the long position’s trend moves and you set a 100-pip limit each,

Only one will succeed; afterwards it moves to the selling side and you incur losses

Also, when positions move toward buying, add those as well

The number of losses will increase further

And you’ll realize latent returns aren’t enough to cover

This is because you aren’t exploiting the retracement when a trend appears

When the “real trend” appears, it can move five yen or more

If volatility is high, it can be ten yen; considering that

Setting a limit becomes a question of whether it is prospectively sound

This is even more true for momentum automated trading

Rather than having unlimited limits, use limit settings

We try pyramid methods and other trials

In the end, they are only risk-reduction logic of Martingale

Eventually, they will break

From a prospect-based market mechanism,

Momentum continuous signal automated trading with unlimited limits should be a simple, ultra-low-risk logic

That is my growth-into-automation logic; this has never changed and won’t

If you think about where funds come from,

It’s from the market, and that’s obvious, right?

Speaking of which

I once estimated momentum trading with Williams, Bollinger Bands, and Envelope in automated trading, and it came to about 30,000 yen

If you add a VPS server, it becomes truly low-risk,

and you can tell whether it’s low-risk and easy to use

For manual trading, momentum trading is best with a stable time frame, I think

From the start, timing and possibilities are fixed; the market is uncertain

Reserved orders with stop-loss momentum is better

Understand the essence of the market: “mean reversion is not there from the start”

Keep doing this

However, manual trading carries latent risks, so

Many people abandon it due to continued risk

Even if you say reserved orders are safe, it’s a lot of tedious work

Moreover, it doesn’t yield much profit (low-risk by nature)

So people often quit halfway when trading manually; that’s why I think you should use a VPS and automated trading

If you consider where AI or algorithms get capital from

From the market, of course, and you should understand that

There isn’t a need to use a name like “algo trading”

If you want to keep earning from FX, see below