What is a good Stop Loss CFD Order Setting Percent?

Strategies of Setting Stop Loss CFD Orders In CFD

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

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

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

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

Traders also place these stop loss cfd orders according to a predetermined risk to reward ratio. This technique of setting stop loss cfd 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 cfd account balance.

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

Setting Stop Loss CFDs Order based on Percentage of Trading Account Balance

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

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 position size which he has bought or sold.

Example:

If a trader has a $10,000 trading account & 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 CFD Order Setting Percent

  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 CFD Order Setting Percent

  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 CFD Order Setting Percent

  2% is $ 200

  200 /10 = 20 pips

  Stop-loss = 20 pips

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