What is a Trailing Stop Loss Commodities Trading Order?
A trailing stop loss is a stop loss levels that keeps adjusting itself automatically by a set number of pips once the commodity market moves in direction of the trader's open trade by a number of pips.
For example the trailing stop can be set at 30 pips & set to adjust itself to 30 pips automatically once the commodity instrument moves up by 5 or 10 pips. This means that this trailing stop loss commodity order will keep trailing the commodities trading price as long as the commodities trading price keeps heading in direction of the trader's open position.
This trailing stoploss will close the order once the commodity market starts to retrace and it retraces to the level of the most recent set trailing stop loss level.
A good indicator used to set trailing stop loss levels is the Parabolic SAR technical indicator:
Parabolic SAR Indicator
Parabolic SAR is used by commodities traders to set trailing commodities trading price stop loss regions
Parabolic SAR provides good exit points which keep trailing the commodities trading price on a commodities chart.
In an upward commodity trend, you should close long trade positions when the commodities trading price drops below the parabolic SAR Indicator
In a downwards commodity trend, you should close short trade positions when the commodities trading price rises above the parabolic SAR.
If you are trading long then the commodities trading price is above the parabolic SAR, the parabolic SAR will move up everyday, regardless of the direction in which the commodities trading price is moving. The amount the parabolic SAR moves up depends on the amount that commodities trading prices moves. Once commodities trading price moves below the parabolic SAR as shown and illustrated on commodity example illustrated and explained below, then traders should close their open buy commodities trades at the trailing stop level provided by the Parabolic SAR +technical indicator.
Parabolic SAR - Commodity Trading Indicator for Setting Trailing StopLoss Commodity Trading Order Levels
