How Do I Analyze a Good Stop Loss Setting Percent?

How Do You Trade a Good Stop Loss Setting Percent?

Strategies of Setting Stop Loss In Trading

Forex traders using a FX strategy must have mathematical calculations that calculate where the Stop-Loss order should be placed.

A trader can also place a stop-loss according to the technical indicators used to set these stop loss orders.

Certain technical indicators use mathematical equations to calculate where the stop losses should be set so as to provide an optimal exit point.

These technical indicators can be used as the basis for setting these stop loss orders.

Forex traders also place these stop loss orders according to a predetermined risk to reward ratio. This strategy of setting stoploss orders is dependent upon certain mathematical 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 account equity balance.

To set a stop loss it is better to use one of the following percentage based methods:

Setting Stop Loss based on Percentage of Account Balance

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

If one 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 which he has bought or sold.

How Do I Set Stop Loss Orders depending on the Account Balance Percent Method

How Do I Analyze Good Stop Loss Setting Percent?