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