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Technical Indicators for Setting Stop losses in Gold Trading

Some chart trading indicators are used for setting stop losses taking away the need for XAUUSD traders to perform complex calculations on where to place these stop loss orders.

A Gold trading systems trader can also place a stop loss order according to these chart indicators. Some indicators use mathematical calculations to calculate where the stop loss order should be set so as to provide an optimal exit. These chart indicators can be used as the basis for setting stop loss orders when it comes to XAUUSD trading. These chart indicators follow price action of Gold XAUUSD price chart closely and define the boundaries which the XAUUSD price should move along in. When the XAUUSD moves outside these boundaries it is therefore best to close the open XAUUSD Gold trades as price stops moving in that particular direction.


Some of the Technical indicators that can be used to set stop loss orders are:


Parabolic SAR Indicator

Parabolic SAR is used to set a trailing price stop loss when trading Gold metal online

The Parabolic SAR provides excellent exit points for setting stops.

  • In an upward trend, you should close long positions when the price falls below the parabolic SAR
  • In a downward trend, you should close short positions when the price rises above the parabolic SAR


If you are in a long position then the price should be above the parabolic SAR, the parabolic SAR will move up every day, regardless of the direction in which the XAUUSD price is moving. The amount that the parabolic SAR moves up depends on the amount that XAUUSD prices moves.

Parabolic SAR - Technical Chart Indicator


Parabolic SAR indicator and how it is used for setting stop loss orders


Bollinger Bands Indicator

Bollinger bands indicator uses standard deviation as a measure of volatility. Since standard deviation is a measure of volatility, the Bollinger bands are self-adjusting meaning that they widen during periods of higher volatility and contract during periods of lower volatility.

Bollinger Bands indicator consists of 3 bands that are designed to encompass the majority of a trading instruments price action. The middle band is a basis for the intermediate-term price trend; typically it is a 20-period simple moving average, which also serves as the base for the upper and lower Bollinger bands. The distance of the upper band the lower band from the middle band is determined by volatility of the price movement.
Since these Bollinger bands are used to encompass the XAUUSD trading instrument price action, the bands can be used to set stop losses just outside the area of these bands.

Bollinger Bands Indicators Setting Stop Loss Level in XAUUSD Price Chart



Fibonacci Retracement Levels Indicator

Fibonacci retracement levels also provide areas of support and resistance, these areas can be used to set stop loss levels when trading XAUUSD.
Fibonacci Retracement level 61.8 % is the most commonly used level for setting stop losses. A stop loss order should be set just below Fibonacci retracement level 61.8 %.

The 61.8 % Fibonacci retracement level is used to set these stop loss orders since this retracement level is rarely hit.

Fibonacci Retracement Levels Chart Indicator Stop Loss Setting at 61.8 % Retracement Level


Fibonacci retracement level 61.8% used to set stop orders in XAUUSD trading.



Support and Resistance Levels Lines

Support and resistance levels is another technical chart indicator that can be used to set stop loss levels where the stop loss orders are set just above or below the support or resistance levels.


Buy Trade - Stop loss set a few pips below the Support Level

Buy Trade - Stop Loss order set a few pips below the Support Level


Sell Trade - Stop Loss set a few pips above the Resistance Level

Sell Trade - Stop Loss order set a few pips above the Resistance Level


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