Techniques of Setting Stop-Loss Orders in XAUUSD

Traders using a xauusd system must have mathematical calculations that reveal where the trade order must be placed.

A trader can also place a stop loss order in accordance to the technical indicators used to set these orders. Certain indicators use math equations to calculate where the stop loss order should be set so that to provide an exit point. These technical indicators can be used as the basis for setting these stop loss orders.

Other traders also place and set these orders according to a pre-determined risk reward ratio. This technique of setting depends upon certain math equations. For example illustration a ratio of 50 pips stop loss can be used by a gold trader if the trade has potential to earn 100 pips in profit: this is a risk : reward ratio of 2:1

Others just use a pre-determined percent of their total trading equity balance.

To set a stop loss order it's best to use one of the following methods:

1. Percent of equity balance

This is based on the % of trading account balance that the Gold trader is willing to risk.

If one is willing to risk 2% of account balance then the trader decides how far he will set the order level based on the trade size that he has bought or sold.

Example:

If a trader has a $100,000 account and is willing to risk 2% then the position size of trade that they will open for Gold will be determined by this 2% stop loss level.

2. Setting Stop Loss Order using Support and Resistance Areas

Another way of setting stop loss orders is to use supports and resistance zones, on the charts.

Given that stoploss orders tend to congregate at key points, when one of these technical levels is tested and touched by price, others are set off, like dominos. Stop losses tend to accumulate just above or below the resistance/support areas, respectively.

A resistance/support level should be like a barrier for trading price movement, this is why they are used to set stop loss orders, if this barrier is breached and broken price movement can move towards the in the opposite direction of original trade, but if this barriers (support and resistance zones) are not broken the price will continue heading in intended direction.

Stop Loss level using a resistance zone

Techniques of Setting Stop-Loss Orders Using Trendlines - How Do You Know Where to Place a Stop Loss Order?

Putting order above the resistance

StopLoss Order level using a support Level

Techniques of Setting Stop-Loss Orders Using Trend Lines - How Do I Set Stop Losses Using Trend Lines?

Placing order below the Support Line

3. TrendLines

A gold trend line can be used to set stop losses where the trade order is set just below the trendline. As long as the trend line holds the online trader will be able to continue earning profits & the same time set this order which will lock his profits once the trendline is broken.

Techniques of Setting Stop-Loss Orders Using Trendlines - How Can I Add a Stop Loss Order?

Putting order below the trend line

Examples of where to set this order using trend lines.

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