Stop Loss Stocks Order Setting: Stop Loss Stocks 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 stocks price where you entered the position. Where you set this stop loss order depends on several factors:

Since there are no stocks trading rules set in stone as to where you should place your stop loss order, we follow general guidelines used by Stocks traders to help them calculate where to place a this stop loss order correctly.

Some of the general guidelines used to set stop loss orders are:

1. Percent Risk Per Stocks Trade - How much a trader is willing to lose on a single stocks trade. General trader rule is that a trader should never lose more than 2 percent of the total account capital on any one single stocks trade.

2. Stocks Market Volatility - this refers to the daily stocks price range of stocks price movement. If a stocks price movement of a stocks 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 stocks trade position by the normal stocks market volatility.

3. Stocks Trading Risk to Reward ratio - risk reward ratio this is the measure of potential reward to risk. If the stock trading market conditions are favorable then it's possible to comfortably give your stocks trade more room when setting stop loss orders. However, if the Stocks Trading market is too choppy it then becomes too risky to trade stocks 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 stocks to trade at another time.

4. Stocks Trading Position Size - if the stocks trading position size traded is too big then even the smallest decimal stocks price movement will be fairly large 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 stock trading market. In most cases it's better to adjust to a smaller stocks trading position size in order to give your stocks trade more space for fluctuation, by setting a reasonable stop loss while at the same time reducing the risk percent per trade.

5. Stocks Capital - If your stocks 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 stocks trading capital invested in a single stocks 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 stocks trading capital to trade the stock trading market in the first place.

6. Stocks Trading Market Trend Conditions - If the stock trading market is trending upward, a tight stop loss order may not be necessary. If on the other hand the stock trading 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. Stocks Trading Chart Time Frame - the bigger the stock chart timeframe you trade, the bigger the stop loss level should be. If you were a scalper stocks trader then your stop loss orders would be set tighter than if you were a stocks day trader or a stocks swing trader. This is because if you are a stocks swing trader and you determine the stocks price will move up it does not make sense to set a very tight stop loss order because if the stock trading market swings a little your tight stop loss order will be hit.

The method of setting a stop loss order that you choose will significantly 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 Stocks Method.