Trailing Stop Loss Stock Order Levels Stock Analysis & Trailing Stop Loss Stock Order Levels Trading Signals

Developed by Tushar Chande.

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

The Levels of the two 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 stock indicator is volatility based when it comes to trailing and following the stocks price action. Trailing Stop Levels will trail the above the stocks price in a downward market stock trend and trails below the stocks price in an upward market trend.

Stocks Trading Analysis & Generating Trading 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 Stocks Trading Trend

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

Stock Uptrend

Downward Stocks Trading Trend

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

Stock Downtrend

When stocks 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.