Stop Loss XAUUSD Order Setting: Stop Loss XAUUSD Order Percentage Calculator
The most important question about setting your stop loss order is how close or how far the stop loss order should be set from the gold price where you entered the position. Where you set this stop loss order depends on several factors:
Since there are no xauusd trading rules set in stone as to where you should place your stop loss order, we follow general guidelines used by XAUUSD traders to help them calculate where to place this stop loss order correctly.
Some of the general guidelines used to set stop loss orders are:
1. Percent Risk Per XAUUSD Trade - How much a trader is willing to lose on a single xauusd trade. The general trader rule is that a trader should never lose more than 2 percent of the total account capital on any one single gold trade transaction.
2. XAUUSD Market Volatility - this refers to the daily gold price range of gold price movement. If a gold price movement of a xauusd trading instrument 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 order. If you do, you may be taken out of the open xauusd trade position by the normal xauusd market volatility.
3. XAUUSD Trading Risk to Reward ratio - risk reward ratio this is the measure of potential reward to risk. If the gold market conditions are favorable then it's possible to comfortably give your xauusd trade more room when setting stop loss orders. However, if the XAUUSD Trading market is too choppy it then becomes too risky to trade xauusd without a tight stop loss order then do not make the trade at all. The risk to reward ratio is not in your favor and even setting a tight stop loss will not guarantee profitable results. It would be wiser to look for a better xauusd to trade at another time.
4. XAUUSD Trading Position Size - if the xauusd trading position size traded is too big then even the smallest decimal gold price movement will be fairly big in risk percentage terms. This means that as a trader you have to set a tight stop loss order which may be taken out more easily by the xauusd trading market. In most cases it's better to adjust to a smaller xauusd trading position size in order to give your xauusd trade more space for fluctuation, by setting a reasonable stop loss while at the same time reducing the risk percent per trade.
5. XAUUSD Capital - If your xauusd account is undercapitalized then you will not be able to set your stop loss orders accordingly, because you will have a large amount of your xauusd trading capital invested in a single xauusd trade position which will force you to set tight stop losses. If this is the case, you should start thinking seriously about whether you have enough xauusd trading capital to trade the gold market in the first place.
6. XAUUSD Trading Market Trend Conditions - If the gold market is trending upwards, a tight stop loss order may not be necessary. If on the other hand the gold market trend is range bound and has no clear direction then you should use a tight stop loss order or not trade at all.
7. XAUUSD Chart Time Frame - the bigger the gold chart timeframe you trade, the bigger the stop loss level should be. If you were a scalper xauusd trader then your stop loss orders would be set tighter than if you were a xauusd day trader or a xauusd swing trader. This is because if you are a xauusd swing trader and you determine the gold price will move up it does not make sense to set a very tight stop loss order because if the gold market swings a little your tight stop loss order will be hit.
The method of setting a stop loss order that you choose will greatly depend on what type of trader you are. The Method of how to set a stop loss order, that you choose should also follow the above guidelines, and as a trader you should apply these guideline to your XAUUSD Method.
