Techniques of Setting Stop-Loss in XAUUSD
A trader also can place set stop loss & take profit orders according to the indicators used to set these set stop loss & take profit orders. Certain indicators use mathematical equations to calculate where the set stop loss order and take profit order - these xauusd should be set so as to provide an optimal exit point for trades. These technical indicators can be used as the basis for setting these set stop loss orders & take profit trade orders.
Other traders also place these set stop loss orders & take profit orders according to a predetermined risk to reward ratio specified in their xauusd strategy. This method of setting stop loss & take profit depends upon certain mathematical equations. For example, a ratio of 20 pips xauusd stop-loss can be used by a trader if the trade has the potential to make 60 pips in xauusd profit: this is a risk reward ratio of 3:1
Other traders just use a predetermined risk percent calculation of their total account equity balance.
To set stop loss orders & take profit orders in xauusd it is best to use one of the following techniques:
1. Percent of Account Balance
This method is based on the percent of account balance that the trader is willing to risk and the risk:reward ratio.
If a trader is willing to risk 2 % of account balance then the trader decides how far he will set the stop loss order level based on the trade position size that he has bought or sold - the trader also uses the risk reward ratio to calculate where to set xauusd take profit order for this trade transaction.
Another method to set stop loss order and take profit order in xauusd is to use supports and resistance levels on the charts.
Given that stop loss orders & take profit orders tend to congregate at key support and resistance levels, when one of these levels is touched by the price, other orders are set off. Stop loss orders and take profit orders tend to accumulate just above or below the resistance or support levels, respectively. Traders should use these support and resistance levels to set stop loss orders & take profit orders in xauusd depending on which side of the trade they're in.
A resistance or support zone should act like a barrier for price movement, this is why these resistance and support levels are used to set xauusd stop losses and xauusd trading take profits, if this price barrier is breached the price movement can move towards the opposite trend direction of original trade, but if this barriers (support & resistance levels) aren't broken the price will continue moving in the intended direction. This means that these support and resistance levels can be used as good points to set stop loss orders & take profit orders in xauusd.
Stop Loss Order and TakeProfit Order
How Do I Analyze Stop Loss Order and TakeProfit Order in XAUUSD
