How To Calculate Stop Loss Order To Limit Your Losses

How To Calculate Stop Loss Order To Limit Your Losses

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 and Apple.

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.