Oil Indicators For Setting Stop losses In Oil
Some oil indicators are used for setting stop losses taking away the need for crude oil traders to perform complex calculations on where to place these stop loss crude oil trade orders.
A oil trading systems trader can also place a stop loss oil order according to these indicators. Some oil technical indicators use mathematical equations to calculate where the order stop loss oil order should be set so as to provide an optimal exit. These oil indicators can be used as the basis for setting stop loss oil orders. These oil indicators follow crude oil price action of a oil instrument closely and define the boundaries which the crude oil prices should move along in. When the crude oil price moves outside these boundaries it is therefore best to close the open crude oil trades because crude oil price stops moving in that particular direction.
Some of the Technical oil indicators that can be used to set stop loss oil orders are:
Parabolic SAR Technical Indicator
Parabolic SAR is like an Automatic Stop Loss Oil Trading Order and Take Profit Oil Trading Order Indicator used to set a trailing crude oil price stop loss
Parabolic SAR provides excellent exit points.
In an upward oil trend, you should close long trades when the crude oil price falls below the Parabolic SAR technical indicator
In a downwards oil trend, you should close short trades when the crude oil price rises above the Parabolic SAR.
If you are long then the crude oil price is above the parabolic SAR, the SAR will move upward every day, regardless of the direction in which the crude oil price is moving. The amount the Parabolic SAR indicator moves up depends on amount that crude oil prices moves.
Parabolic SAR - Crude Oil Indicator - Automatic Stop Loss Oil Trading Order and Take Profit Oil Trading Order Technical Indicator
Picture of parabolic SAR and how it is used
Bollinger Bands Indicator
Bollinger bands indicator use standard deviation as a measure of volatility. Since standard deviations technical indicator is a measure of volatility, the Bollinger bands are self-adjusting meaning they widen during periods of higher volatility and contract during periods of lower volatility.
Bollinger Bands indicator consist of 3 bands designed to encompass the majority of a oil instruments crude oil price action. The middle band is a basis for the intermediate term oil trend, mostly it is a 20 day period simple moving average, which also serves as the base for calculating the upper band and lower band. The upper band's and the lower band's distance from the middle band is determined by price volatility.
Since these Bollinger bands are used to encompass the crude oil price action, the bollinger bands can be used by traders to set stop loss orders just outside the areas of the bands.
Bollinger Band Setting Stop Loss Oil Trading Order Level - Bollinger Bands Oil Technical indicator
Crude Oil Fibo Retracement Levels Indicator
Fibonacci retracement levels provide areas of support and resistance, these areas can then be used to set stoploss levels.
Crude Trading Fibonacci Retracement level 61.8 % is the most commonly used level for setting stop losses. A stop loss crude oil order should be set just below 61.8 % fib retracement level
The 61.80% Fibonacci retracement level indicator is used to set these orders since its rarely hit.
Fibonacci Indicator Stop Loss Oil Order Setting at 61.80% Retracement Level
Fibonacci retracement level 61.8% - Fibonacci Indicator
Support & Resistance Levels Lines
Support and resistance levels can be used to set stop loss levels where the stop loss oil orders are set just above or below the support or resistance.
- Buy Oil Trade - Stop Loss Oil Trading Order set few pips below the support
Buy Oil Trade - Stop Loss Oil Trading Order set few pips below the support
- Sell Oil Trade - Stop Loss Oil Trading Order set a few pips above the resistance
Sell Crude Oil Trade - Stop Loss Oil Trading Order set a few pips above the resistance
