How to Place Stop Loss Order in XAUUSD

How to Put Stop Loss Order in XAUUSD Trading Market

Stop Loss XAUUSD Order is a type of order which is placed after opening a xauusd trade that's meant to minimize losses if the market trend moves against you.

Stop Loss XAUUSD Order is a pre determined point of getting out of a losing trade and it is meant to control losses in xauusd.

A stop-loss order is an order placed with your broker that will automatically close your open xauusd trade when price of your open trade order reaches a predetermined price. When set level is reached, your open trade is liquidated.

These orders are meant to limit the amount of money which a trader can lose: by exiting the trade if a specific price that's against the trade is reached.

For example, a trader may open a buy trade and put a stop loss of 20 pips, if the price moves against the trader by 20 pips the stoploss order will be filled & the trade will be liquidated therefore limiting the loss to 20 points (pips) - How Do I Set StopLoss XAUUSD Orders Examples.

Regardless of what you might be told by other traders, there's no question about if these stoploss orders should or shouldn't be used - stoploss orders should always be used.

One of most complex things in xauusd is setting these stoploss orders - How to Calculate Stop Loss XAUUSD Order for Gold - How Do I Set StopLoss Order in XAUUSD. Put the stoploss order too close to your entry price and you're liable to exit the trade due to random market volatility. Place the stoploss order too far away and if you're on wrong side of the trend, then a small loss could turn into a big loss.

Skeptics will point out several disadvantages of these stop losses: that by placing them you are guaranteeing that, should your open xauusd trade transaction move in the wrong direction, you'll end up selling at lower prices, not higher.

Skeptics will also argue that in setting stoploss orders you are vulnerable to exit a xauusd trade just before the market moves in your favor. Most traders have had the experience of setting a these stoploss orders & then seeing the price retrace to that stoploss order level, or just few points below it, and then go in direction of their original market trend analysis. What might have been a profitable trade instead turns into a xauusd loss.

Experienced traders always use stoploss orders as these orders are an important part of the discipline that's required to succeed in xauusd because stop loss orders can prevent a small loss from becoming a big loss. What's more, by diligently placing these stoploss orders whenever you enter a xauusd trade position, you end up making this important decision at the point in time when you're most objective about what's really happening with market, this is because most objective gold analysis is done before opening a xauusd trade. After entering the market an investor will tend to analyze the market differently because now they have a bias toward one side of market, the direction of their analysis - How Do I Set StopLoss Order in XAUUSD.

Unexpected xauusd economic news can come out of the blue & dramatically affect the price: this is why it is so important to have a stoploss order set for your open xauusd trade. It is best to cut xauusd trade losses early when a xauusd trade transaction is moving against you, it is best to cut your losses immediately rather than waiting for the loss to become a big one. Again, if you set your stoploss orders when you are entering a trade, then that's when you're most objective as a trader - How to Calculate Stop Loss XAUUSD Order for XAUUSD.

How to Calculate Stop Loss Order for XAUUSD

A key trade question is exactly where to place this stoploss order. In other words, how far should you place this gold stoploss below your purchase price? Many traders will tell you to set predetermined - max acceptable loss per trade, an amount based on your account equity balance rather than use indicators for calculating where to place the stop loss order - How Do I Set StopLoss Order in XAUUSD.

Professional money managers advice that you should not lose more than 2 % of your account equity on any one single trade. If you have $10,000 in xauusd capital, then that would mean that the max loss you should set for any one trade is $200 - How to Calculate Stop Loss XAUUSD Order for XAUUSD.

If you opened a xauusd trade then that would mean you would limit your risk to no more than $200 for that particular trade. In which case you would set your stoploss order at 200 or the equal number of pips based on your trade position size of trade that you have opened - How to Put Stop Loss Order in XAUUSD Market - How to Put Stop Loss Order XAUUSD. The topic of xauusd risk management is a wide topic and it is covered under learn xauusd equity management tutorials.

• XAUUSD Trading Money Management Introduction - Factors to Consider When Setting StopLoss XAUUSD Orders
• XAUUSD Money Management Strategies Methods - How to Put Stop Loss Order in XAUUSD Market - How to Put Stop Loss Order XAUUSD

What to Consider When Setting StopLoss

Most important question is how close or far this stoploss order should be set from the price where you entered the trade position. Where you set the stoploss order will depend on several factors:

Because there are no guidelines cast in a stone as to where you should put these stoploss orders on a chart, we follow general stoploss order setting guide-lines used to help place these stoploss orders correctly.

Some of general stoploss order setting guide-lines used are:

1. Risk Percentage - How much is a trader willing to lose on a single trade. General stoploss order setting rule is that a trader should never lose more than 2 percent of the total account capital on any one single trade.

2. Market Volatility - market volatility refers to the daily price range movement of instrument that you are trading. If xauusd routinely moves up and down in a range of 50 pips or more over the course of the day, then you cannot set a tight stop loss when you open a xauusd trade. If you do, you'll be taken out of the trade transaction by normal market volatility.

3. Risk to Reward Ratio - this is the measure of potential risk : reward calculated before opening a xauusd trade. If the market conditions are favorable then it's possible to comfortably give your trade more room. However, if the market is too choppy it then becomes very risky to open a xauusd trade without a tight stop loss - then don't make the trade at all. The risk : reward ratio isn't in your favor and even setting tight stoploss orders will not guarantee profitable results. It would be wiser to look for a better trade to next time.

4. Trade Position Size - if the trading size executed is too big then even the minimum decimal price movement will be fairly big in risk % terms. This means that you have to set a tight stop-loss for your trade which might be taken out more easily. In most cases it is better to adjust to a smaller trade size so as to give your trade more space for fluctuation, by setting a reasonable stop loss level for this stop loss order while at the same time reducing the risk for the trade.

5. Account Equity - If your account is under-capitalized then you will not be able to set your stoploss orders accordingly, because you'll have a big amount of money invested in a single trade position which will force you to set very tight stoploss orders. If this is case, you should think seriously about whether you have enough capital to trade Gold in the first place.

6. Trading Market Conditions - If price is trending upwards, a tight stop may not be necessary. If on the other hand the price is choppy and has no clear trend direction then you should use a tight stoploss or not open any trades at all.

7. Gold Timeframe - the bigger the time frame you use, the bigger the stop-loss order level should be. If you were a scalper trader your stoploss orders would be tighter than if you were a xauusd day trader or a xauusd swing trader. This is because if you are using longer chart time-frames & you determine the price will be move upwards it doesn't make sense to set a very tight stops because if the price swings just a little, your open xauusd order will be hit.

How to Calculate Stop Loss XAUUSD Order for Gold

The technique of setting stop loss orders that you choose will greatly depend on what type of trader you are. Most oftenly used method to determine where to set stop losses is - resistance and support levels. These support & resistance levels give good points for setting these stoploss orders as they are most reliable levels to set stoploss orders, because the support & resistance levels will not be hit many times.

How to Put Stop Loss XAUUSD Order in Market

The technique of how to set these stop losses that you choose should also follow the stop loss order setting guidelines above, even if not all these guide-lines apply to your strategy try to implement the lesson lines that will apply to your strategy depending on what type of trader you're.

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