Stop Loss Commodity Trading Order Setting: Stop Loss Commodity Trading Order Percentage Calculator

The most important question about setting your commodity stop loss commodity order is how close or how far the stop loss commodity order should be set from the commodities price where you entered the position. Where you set this stop loss commodity order depends on several factors:

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

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

1. Percent Risk Per Commodities Trade - How much a trader is willing to lose on a single commodity trade. The general trader rule is that a trader should never lose more than 2 percentage of the total trading account capital on any one single commodities trade transaction.

2. Commodity Trading Market Volatility - this refers to the daily commodities price range of commodities price movement. If a commodities price movement of a commodity 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 commodity stop loss commodity order. If you do, you may be taken out of the open commodity trade position by the normal commodity market volatility.

3. Commodity Trading Risk to Reward ratio - risk reward ratio this is the measure of potential reward to risk. If the commodities trading market conditions are favorable then it is possible to comfortably give your commodity trade more room when setting stop loss commodity orders. However, if the Commodity Trading market is too choppy it then becomes too risky to trade commodity without a tight stop loss commodity 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 commodity to trade at another time.

4. Commodity Trading Position Size - if the commodity trading position size traded is too big then even the smallest decimal commodities price movement will be fairly big in risk percentage terms. This means that as a trader you have to set a tight stop loss commodity order which may be taken out more easily by the commodities market. In most cases it's better to adjust to a smaller commodity trading position size in order to give your commodity trade more space for fluctuation, by setting a reasonable stop loss while at the same time reducing the risk percent per trade.

5. Commodities Capital - If your commodity account is undercapitalized then you will not be able to set your stop loss commodity orders accordingly, because you will have a large amount of your commodity trading capital invested in a single commodity 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 commodity trading capital to trade the commodities trading market in the first place.

6. Commodity Trading Market Trend Conditions - If the commodities trading market is trending upward, a tight stop loss commodity order might not be necessary. If on the other hand the commodities trading market trend is range bound and has no clear direction then you should use a tight commodity stop loss commodity order or not trade at all.

7. Commodity Trading Chart Time Frame - the bigger the commodities chart time frame you trade, the bigger the stop loss level should be. If you were a scalper commodity trader then your stop loss commodity orders would be set tighter than if you were a commodity day trader or a commodity swing trader. This is because if you are a commodity swing trader and you determine the commodities price will move up it does not make sense to set a very tight commodity stop loss commodity order because if the commodities trading market swings a little your tight stop loss commodity order will be hit.

The method of setting a commodity stop loss commodity order that you choose will significantly depend on what type of trader you are. The Method of how to set a stop loss commodity order, that you choose should also follow the above guidelines, and as a trader you should apply these guideline to your Commodity Trading Method.