Trailing StopLoss Order Levels Analysis & Trailing StopLoss Order Levels Trading Signals

Created by Tushar Chande.

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 by the market volatility.

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

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

The long stop level line has much wider range in terms of where it trails the stop loss as compared to short stop level which 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 downward market trend and trails below the price in an upward market trend.

Trading Analysis & Generating 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.

Upward Trend

In an upwards trend these levels will follow below the 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 price goes higher the trailing level also goes higher. An exit signal is generated when price crosses below these levels.

Gold Uptrend

Downwards Trend

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

Gold 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 stopped out by the trailing stop loss.