What is a good Stop Loss Commodity Trading Order Setting Percentage?

Strategies of Setting Stop Loss Commodity Trading Orders In Commodity Trading

Traders using a commodity strategy must have mathematical calculations that calculate where the Stop Loss Commodity Trading 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 indicators use mathematical equations to calculate where the stop loss orders should be set so as to provide an optimal exit point.

These commodity 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 commodity trading account balance.

To set a stop-loss order it is best to use one of the following percentage based techniques:

Setting Stop Loss Commodity Order based on Percent of Account Balance

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

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

Example:

If a trader has a $10,000 commodities trading account & 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% StopLoss Commodity Trading Order Setting Percentage

  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% StopLoss Commodity Trading Order Setting Percentage

  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 Commodity Trading Order Setting Percentage

  2% is $ 200

  200 /10 = 20 pips

  Stoploss = 20 pips

How to Set Stop Loss Commodity Trading Orders based on the Commodity Account Balance Percentage Method - What is good Stop Loss Commodity Trading Order Setting Percent