Stop Loss Trading Order Trading Summary: Points To Remember When Placing

The key to putting stop orders in silver trading is not to put too tight or too far and not exactly on the support or resistance levels.

A few pips below support or above resistance zones is the best place.

If you're going long (buying a silver trading instrument), just look for a nearby support level which is below your entry point & set this order about 10 pips to 20 pips below that support level. The example explained and shown below show the level where a trader can set their stop loss orders just below the support level on a chart.

Support Level For Setting StopLoss Trading Order Level For Buy Trade

If you're going short (selling a silver trading instrument), just look for a nearby resistance level that is above your trade entry point and put this top loss order about 10 pips to 20 pips above that resistance level. The example explained and shown below show the level where a trader can set their stop loss orders just above the resistance level on a chart.

Resistance Level For Setting Stop Loss Trading Order Level For Sell Trade

You can also use stop loss trading orders to lock in profits, Not Just for Preventing Losses

The advantage of a stop loss trading order is that you do not have to monitor on a daily basis how the trading market is performing. This is especially handy when you're in a situation that prevents you from watching your trades for an extended period of time, or when you want to navigate to sleep after trading the whole day.

The disadvantage is that the trading price at which you set these stop loss orders could be activated by a short term fluctuation in trading price. The key is picking a stop order percentage that allows price to fluctuate within the day to day range while preventing the downside risks.

These silver orders are traditionally thought of as a way to prevent losses thus the name. Another use of these stop orders is to lock in the profits, in which case it is referred to as a trailing stop loss.

For a trailing stop order it is put at a percent level below the current market trading price. This trailing level then shifted as the trade position unfolds. Using a trailing stop loss level allows you to let profits run while at the same time ensures that should the trading market turn you'll have locked in some of your profits.

These silver orders can also be used to eliminate risk if a trade transaction becomes profitable. If a trade position makes some reasonable gains then the stop loss can be moved to break even point, the place at which you bought, thereby ensuring that even if the trade transaction moves against you, you won't make any loss, you will break even on that trade.

Trailing stop silver orders are used to maximize and protect profit as trading price rises and limit losses when the trading price falls.

A good example is when you use the parabolic SAR XAGUSD Indicator & keep moving your stop loss order to the parabolic SAR level.

Parabolic SAR Indicator for Setting Trailing StopLoss Trading Order in Silver

Another example is where one moves his stop loss order by a certain number of pips after every few hours or after each hour or after every 15 minutes depending on the chart time frame which the trader is using.

In the trading example above the parabolic SAR Indicator which had a setting of 2 & 0.02 was used as the trailing stop loss for the above chart. The trader would have kept moving the trailing stop loss order level up after every SAR was drawn until the time when the Parabolic SAR was hit and the silver trend reversed.

Conclusion A stop loss order is a simple tool, yet so many investors fail to use it. Whether it's used to prevent excessive losses or to lock in profits, nearly all trading styles can benefit from this tool.

Points To Remember When Putting These Stop Orders

Here are some important points to remember:

• Be careful with the points where you set these stop loss orders. If silver normally fluctuates 20 points, you do not want to put your top loss order too close to that range else you'll be taken out by normal market volatility

• Stop Loss Trading Orders take the emotion out of a trading decisions & by setting one you set a pre determined point of exiting a losing trade, meant to control losses.

• Traders can always use indicators to calculate where to put these regions, or use the concepts of Resistance and Support to decide where to set these stop loss orders. Another good indicator used to set these stop loss orders is the Bollinger bands where traders use the upper & lower band as the limits of price therefore putting these orders outside the bands.