How To Limit Your Losses Using A Stop Loss - Find Out The Pros & Cons Of Using Stop Losses

How To Calculate Stop Loss Order
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One of the key questions in trading is "How do you limit your losses?" And the best way to limit losses is by using a stop loss order.

In this video, you will learn how exactly to calculate a stop loss order using the "Average Daily Range"

So, how do you calculate stop loss orders to limit your risk?

I want to show you how to calculate the best stop loss order if you are trading stocks.

We’ll look at specific examples like Tesla (TSLA) and Apple (AAPL).

Now this is for you if you are trading, because trading is different than investing.

When trading, you’re actively placing a stop loss to limit your losses and a profit target where you take profits.

Today we’re going to focus on how to limit your loss because we want to make sure that you are not losing your shirt when trading.

So let’s get started.

So, first of all, when we talk about placing a stop loss order…

There are two things that you need to keep in mind.
First of all, we are looking at a stop loss on a per trade basis. Anytime you’re entering a trade, you need to limit your risk.

And this is where we are looking at the 2% rule. What does the 2% rule mean? The 2% rule means you never risk more than 2% of your account on any given trade.

So let’s say that you have a $10,000 account. When you have a $10,000 account, your risk should be 2% of $10,000, which is $200.

Never risk more than $200 of your account on any given trade, and here’s why.

Now, let’s say that you have, for example, 10 losses in a row, which can happen. So if you lose 10 times $200, you lose $2,000.

Now, of course, this is not nice, but you still have $8,000 left. So you’re still alive. You can still trade, right? You started with the $10,000 account.

You have 10 losses in a row, which, by the way, is quite an accomplishment, because if you have 10 losses in a row, you might want to revisit your strategy and go back on a simulator for a little bit.

But you see, this is the key when limiting your losses, you’re still alive. You only lost $2,000 and you can still trade and make back the money that you lost.

So never risk more than 2% on any given trade.
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#stoploss #calculatingstoploss #stoplossstocks #calculatestoploss

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Видео How To Limit Your Losses Using A Stop Loss - Find Out The Pros & Cons Of Using Stop Losses канала Markus Heitkoetter