What Percent Should You Set the Stop Loss CFD Order at?

Strategies of Setting Stop Loss CFD Orders In CFD

Traders using a trading strategy must have mathematical calculations that calculate where the Stop Loss CFD Order should be placed.

A trader can also set a stop-loss order according to the technical indicators used to set these stop loss orders.

Certain technical indicators use mathematical equations to calculate where the stop loss orders should be set so as to provide an optimal exit point.

These cfd technical indicators can be used as the basis for setting these stop loss orders.

Traders also place these stop loss orders according to a predetermined risk to reward ratio. This method of setting stop loss orders is dependent upon certain mathematical equations. For example a ratio of 20 pips stop-loss can be used by a trader if the trade has the potential to make 40 pips in profit: this is a risk reward ratio of 2:1

Other traders just use a predetermined percent of their total cfd account balance.

To set a stoploss order it's best to use one of the following percent based techniques:

Setting Stop Loss CFDs Order based on Percentage of Trading Account Balance

This stop loss setting method is based on the percent of cfd account balance that the trader is willing to risk.

If a trader is willing to risk 2% of account balance then the trader determines how far he will set the order level based on the open trade size that he has bought or sold.

Example:

If a trader has a $10,000 account and is willing to risk 2%

• If a trader buys 0.1 contract or 0.1 Standard Lots

  1 pip = $1

  Then setting at 2% - 2% Stop-Loss CFD Order Setting Percent

  2% is $ 200

  200 /1 = 200 pips

  Stop Loss = 200 pips

• If a trader buys 0.5 contracts or 0.5 Standard Lots

  1 pip = $5

  Then setting at 2% - 2% Stop-Loss CFD Order Setting Percent

  2% is $ 200

  200 /5 = 40 pips

  Stop Loss = 40 pips

• If a trader buys 1 contract or 1 Standard Lot

  1 pip = $10

  Then setting stop loss at 2% - 2% Stop Loss CFD Order Setting Percent

  2% is $ 200

  200 /10 = 20 pips

  Stoploss = 20 pips

How to Set Stop Loss CFD Orders based on the CFD Account Balance Percent Method - What is a good Stop Loss CFD Order Setting Percent