What is a good Stop Loss Stocks Order Setting Percent?

Strategies of Setting Stop Loss Stocks Orders In Stocks

Traders using a stock strategy must have mathematical calculations that calculate where the Stop Loss Stocks Order should be placed.

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

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

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

Traders also place these stop loss orders according to a predetermined risk to reward ratio. This method of setting stop loss 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 percent of their total stocks account balance.

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

Setting Stop Loss Stock Order based on Percentage of Account Balance

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

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 which he has bought or sold.

Example:

If a trader has a $10,000 stock trading 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 Stocks 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 Stocks 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 Stocks Order Setting Percentage

  2% is $ 200

  200 /10 = 20 pips

  Stop-loss = 20 pips

How to Set Stop Loss Stocks Orders based on the Stocks Account Balance Percent Method - What is a good Stop Loss Stocks Order Setting Percent