How Do I Use Stop Loss Gold Orders?
How Do I Use XAUUSD Stop Loss Orders in XAUUSD Trading?
Trading Gold select you stop loss level the target stop loss should be based on various strategies depending on your type of gold trading method.
The 3 techniques of selecting stop-loss levels are:
Strategies & Methods of Setting Stop Loss Gold Orders in XAUUSD Trading
Traders using a gold trading system must have mathematical calculations that reveal where the order must be placed.
A trader can also place a stop loss order according to the technical gold indicators used to set these orders. Certain technical gold indicators use mathematical equations to calculate where the stop loss order should be set so as to provide an exit point. These xauusd technical indicators can be used as the basis for setting these orders.
Traders also place these orders according to a predetermined risk to reward ratio. This technique of setting is dependent upon certain mathematical equations. For examples a ratio of 50 pips stop loss can be used by a trader if the gold trade has the potential to make 100 pips in profit: this is a risk:reward ratio of 2:1
Other traders just use a predetermined percentage of their total gold trading account balance.
To set a stop loss it is better to use one of the following methods:
1. Percent of Gold trading account balance
This stop loss setting method is based on the percentage of account balance that the trader is willing to risk.
If a trader is willing to risk 2% of gold trading account balance then the trader determines how far he will set the stop loss order level based on the trade size that he has bought or sold.
2. Setting Stop Loss XAUUSD Orders using Support and Resistance Areas
Another way of setting stop loss orders is to use supports & resistance zones, on the trading charts.
Given that stop loss orders tend to congregate at key points, when one of these levels is touched by the xauusd price, other gold orders are set off. Stop loss orders tend to accumulate just above or below the resistance or support levels, respectively.
A resistance or a support area should act like a barrier for xauusd price movement, this is why they are used to set gold stop losses, if this barrier is broken the xauusd price movement can go toward the opposite direction of the original gold trade, but if this barriers (support & resistance levels) are not broken the xauusd price will continue heading in intended direction.
Stop Loss Gold Order Level Setting using Resistance Level
Setting stop loss order above resistance level
Stop Loss Gold Order Level using Support Level
Setting stop loss order below the Support Level
3. XAUUSD Trend Lines
A Gold trend-line can be used to set stop-losses where the stop loss order is set just below the trend line. As long as the trend line holds the trader will be able to continue making profits while trading & at the same time set this stop-loss order which will lock his profit once the trend-line is broken.
Setting stop-loss order below the trend-line
Examples of where to set this stop loss order using Gold trend lines.
How Do You Use Trading Stop Loss Gold Orders in Gold Trading?
