Where Should You place a Stop Loss Commodity Trading Order using Support Level and Resistance Levels in Commodity Trading?

A trader can use support & resistance levels on the commodity chart to determine where to place their stop loss orders using the methods explained on the examples below:

Setting Stop Loss Commodity Trading Order using Resistance Levels

One way of setting stop loss orders is to use resistance levels, on the commodity charts.

Given that stop loss orders tend to congregate at key points, when one of these resistance levels is touched by the commodity price, other orders are set off.

Stop-loss orders tend to accumulate just above the resistance zones.

A resistance area should act like a barrier for commodity price movement, this is why the resistance zone are used to set stop loss orders.

If this resistance level is broken the commodity price movement can go towards the opposite direction of the original commodity trend, but if this resistance level is not broken the commodity price will continue heading in the intended direction.

Stop Loss Commodities Trading Order Level Setting using Resistance Zones in Commodity Trading

Setting Stop Loss Commodity Trading Order above the Resistance Level

Setting Stop Loss Commodity Trading Order using Support Levels

Another way of setting stop-loss orders is to use support areas, on the commodity charts.

Given that stop loss orders tend to congregate at key points, when one of these support levels is touched by the commodity price, other orders are set off.

Stoploss orders tend to accumulate just below the support levels.

A support level should act like a barrier for commodity price movement, this is why these support areas are used to set stop-losses.

If this support level is broken the commodity price movement can go towards the opposite direction of the original commodity trend, but if this support level is not broken the commodity price will continue heading in the intended direction.

Stop Loss Commodity Trading Order Level Setting using Support Levels in Commodity Trading

Setting Stop Loss Commodity Trading Order below the Support Level