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# Methods of Setting Stop Loss XAUUSD Orders in XAUUSD

Traders using a xauusd trading system must have mathematical calculations that reveal where the order must be placed.

A XAUUSD trader can also place a stop loss xauusd order according to the technical indicators used to set these orders. Certain technical indicators use mathematical equations to calculate where the stop loss xauusd order should be set so as to provide an optimal exit point. These indicators can be used as the basis for setting these orders.

Other xauusd traders also place these orders according to a predetermined risk to reward ratio. This method of setting is dependent upon certain mathematical equations. For example a ratio of 50 pips stop loss can be used by a XAUUSD trader if the trade has the potential to make 100 pips in profit; this is a risk reward ratio of 2:1

Others just use a predetermined percentage of their total trading account balance.

To set a stop loss order it is best to use one of the following methods:

## 1. Percentage of xauusd account balance

This is based on the percent of account balance that the xauusd trader is willing to risk.

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

Example:

If a xauusd trader has a \$100,000 account and is willing to risk 2% then the position size of the trade that they will open for XAUUSD Trading will be determined by this 2% stop loss level.

## 2. Setting Stop Loss XAUUSD Order using Support and Resistance Levels

Another way of setting stop loss xauusd orders is to use supports and resistance levels, on the trading charts.

Given that stop loss xauusd orders tend to congregate at key points, when one of these levels is touched by the gold price, others are set off, like dominos. Stop loss orders tend to accumulate just above or below the resistance or support levels, respectively.

A resistance or a support level should act like a barrier for gold price movement, this is why they are used to set stop losses, if this barrier is broken the gold price movement can go towards the opposite direction of the original xauusd trade, but if this barriers (support and resistance levels) are not broken the gold price will continue moving in the intended direction.

### Stop Loss XAUUSD Order level using a resistance level

Setting order above the resistance

## Stop Loss XAUUSD Order level using a support Level

Setting order below the Support Line

## 3. XAUUSD Trend Lines

A xauusd trend line can be used to set stop losses where the order is set just below the xauusd trend line. As long as the xauusd trend line holds the xauusd trader will be able to continue making profits while at the same time set this order that will lock his profit once the xauusd trend line is broken.

Setting order below the xauusd trend line

Example of where to set this order using xauusd trend lines.