Indicators for Setting Stop losses in Gold Trading
Some indicators are used for setting stop losses taking away the need for traders to perform complex calculations on where to place these stop loss xauusd trade orders.
A gold systems trader also can place a stop loss order according to these technical indicators. Some indicators use mathematical equations to calculate where the trade order stop loss order should be set so as to provide an optimal exit. These technical indicators can be used as the basis for setting stop loss orders. These indicators follow price action of a instrument closely & define the boundaries which the prices should move along in. When the price moves outside these boundaries it is henceforth best to close the open trade positions because price stops heading in that particular direction.
Some of the Trading indicators that can be used to set stop loss orders are:
Parabolic SAR Indicator
Parabolic SAR is like an Automatic Stop Loss Order and TakeProfit Order Indicator used to set a trailing price stop loss
Parabolic SAR provides excellent exit points.
In an upward trend, you should close long trades when the price falls below the Parabolic SAR trading indicator
In a downward trend, you should close short trades when the price rises above the Parabolic SAR.
If you are long then the price is above the SAR, the SAR will move upward every day, regardless of direction in which the price is moving. The amount the Parabolic SAR indicator moves upwards depends on the amount that prices moves.
Parabolic SAR - Indicator - Automatic Stop Loss Order and TakeProfit Order Indicator
Picture of parabolic SAR and how it's used
Bollinger Band
Bollinger Bands indicator use standard deviation as a measure of volatility. Since standard deviation technical indicator is a measure of volatility, the Bollinger bands are self-adjusting meaning they widen during periods of higher volatility & contract during periods of lower volatility.
Bollinger Bands indicator consist of three bands designed to encompass the majority of a instruments price action. The middle band is a basis for the intermediate term trend, typically it's a 20 period simple MA moving average, which also serves as a base for upper band as well as lower band. Upper band's distance & lower band's distance from the middle-band is usually determined by volatility.
Since these Bollinger Band are used to encompass the price action, the bollinger bands can be used by traders to set stop loss orders just outside the levels of the bands.
Bollinger Band Setting Stop Loss Order Level - Bollinger Bands Technical indicator
Fibonacci Retracement Levels Trading Indicator
Fibonacci retracement levels provide levels of support & resistance, these areas can be used to set stoploss levels.
Fib Retracement level 61.80% is the most commonly used level for setting stop losses. A stoploss order should be set just below 61.80% fib retracement level
The 61.8 % Fib retracement level indicator is used to set these orders since its rarely hit.
Fibonacci Indicator Stop Loss Setting at 61.80 % Retracement Level
Fibonacci retracement level 61.8% - Fib Indicator
Support & Resistance Areas Lines
Support & resistance zones can be used to set stop loss levels where the stop loss orders are set just above or below the support or resistance.
- Buy Trade - Stop Loss set just a couple of pips below the support
Buy Trade - Stop Loss Order set few pips below the support
- Sell Trade - Stop Loss Order set few pips above the resistance
Sell Trade - Stop Loss Order set a few pips above the resistance
Get More Tutorials and Courses:
- How Do You Save MT4 Profile of MetaTrader 4 Gold Charts in MT4 Platform?
- How Do You Trade MetaTrader 4 Fibonacci Expansion Gold?
- How Do You Save MT4 Profile of MetaTrader 4 Gold Charts in MT4 Platform?
- How Do You Read Hammer Candles?
- How to Create a Bull Power Technical Indicator Gold System
- What is the Best Leverage for $50 Account?
- Gold Open a XAUUSD Order on MT5 Mobile Gold App
- Gold Support and Resistance Levels Trading Analysis
- How Do You Read MetaTrader 4 Downwards Channel in MT4 Charts?
