Methods of Setting Stop Loss Silver Trading Orders In XAGUSD Trading
Traders using a silver system must have mathematical calculations that reveal where the order must be placed.
A trader can also set a stop-loss silver trading order according to the technical indicators used to set these orders. Certain indicators use mathematical equations to calculate where the stop loss silver order should be set so that to provide an exit point. These technical indicators can be used as the basis for setting these orders.
Other traders also place these orders according to a predetermined risk to reward ratio. This method of setting is dependent upon certain math equations. For example a ratio of 50 pips stop loss can be used by a trader if the trade has the potential to make 100 pips in profit: this is a risk : reward ratio of 2:1
Others just use a predetermined percent of their total trading account balance.
To set a stop loss order it's best to use one of the following techniques:
1. Percentage of Silver trading account balance
This is based on the percent of 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 trade position size which 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 the trade that they will open for Silver will be determined by this 2% stop loss level.
2. Setting Stop Loss XAGUSD Order using Support & Resistance Levels
Another way of setting stop loss silver orders is to use supports and resistance levels, on the trading charts.
Given that stop loss silver trading orders tend to congregate at key points, when one of these levels is touched by the xagusd trading price, others are set off, like dominos. Stop loss orders tend to accumulate just above or below the resistance or support levels, respectively.
A resistance or a support level should act like a barrier for xagusd trading price movement, this is why they are used to set stop losses, if this barrier is broken the xagusd trading price movement can go toward the opposite direction of the original silver trade, but if this barriers (support and resistance levels) are not broken the xagusd price will continue heading in the intended direction.
Stop Loss Silver Trading Order level using a resistance level
Setting order above the resistance
Stop Loss Silver Trading Order level using a support Level
Setting order below the Support Line
3. XAGUSD Trend Lines
A silver trend line can be used to set stop losses where the order is set just below the silver trend line. As long as the silver trend line holds the trader will be able to continue making trading profits while at the same time set this order that will lock his profit once the silver trendline is broken.
Setting order below the silver trendline
Examples of where to set this order using silver trend lines.