What's a good Stop Loss Order Setting Percent?

Strategies of Setting Stop Loss Orders in Gold

Traders using a xauusd strategy must have mathematical calculations that calculate where the Stop-Loss Order should be set.

A trader also can set a stop loss order according to the technical indicators used to set these stop loss gold trade 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 indicators can be used as the basis for setting these stop loss gold trade orders.

Traders also place these stop losses according to a predetermined risk to reward. This technique of setting stop losses is dependent upon certain math 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 percentage of their total equity balance.

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

Setting Stop Loss Order based on Percent of Account Balance

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

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

Example:

If a trader has a $10,000 account and 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 % Stop Loss 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 % Stop Loss 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 Order Setting Percentage

  2% is $ 200

  200 /10 = 20 pips

  Stoploss = 20 pips

How to Set Stop Loss Orders depending on the Account Balance Percent Method - What is a Good Stop Loss Order Setting Percentage