Trailing Stop Loss Trading Order Levels Technical Analysis and Trailing Stop-Loss Trading Order Levels Trading Signals

Created by Tushar Chandes.

This is a volatility based indicator that is used to estimate levels to set stoploss levels. Distance at which it estimates the trailing stop level is determined based on market volatility.

The Levels of the two lines, these 2 lines represent:

• Long Stop Level - Blue Line
• Short Stop Level - Red Line

Long stop level line has much wider range in terms of where it trails stop loss as compared to short stop level that implements a tight stop loss.

This indicator is volatility based when it comes to trailing and following the price action. Trailing Stop Levels will trail the above the price in a downward market trend and trails below the price in an upwards market trend.

Technical Analysis and Generating Trade Signals

These will be calculated using volatility to calculate where to draw the indicator - this is used to figure out what levels to set stop losses.

Upwards Trend

In an upwards trend these levels will follow below the trading price. The trader can use either the short stop level line to set up a tight stop or the long stop level to set a stop loss that is not very tight. As the trading price goes higher the trailing level also goes higher. An exit signal is generated when trading price crosses below these levels.

Uptrend

Downwards Trend

In a downwards trend the stop loss levels will trail above the trading price this two levels can be used to set these levels. As the trading price drops further these levels will continue to drop lower and follow the trading price lower. An exit signal is generated when trading price crosses above these levels.

Downtrend

When price starts to retrace these levels will not retrace but will remain at their levels, this will mean at some point the trade will be closed by the trailing stop loss.