Indicators for Setting Stop losses in XAUUSD

Some indicators are used for setting stop loss orders taking away the need for traders to perform complex calculations on where to place and set these stop loss order trade orders.

A systems trader can also set a stoploss order according to these indicators. Some indicators use mathematical equations to calculate where the trade order stop loss should be set so that to provide an optimal exit. These indicators can be used as the basis for setting stoploss orders. These indicators follow price action of a instrument closely and define the boundaries which the prices should move along in. When the price moves outside these boundaries it's thence best to close out the open trade positions because price stops heading in that particular direction.

Some of the Trading indicators that can be used to set stop losses are:

Parabolic SAR Indicator

Parabolic SAR is like an Automatic Stop Loss Order & TakeProfit Order Indicator used to set a trailing price stop loss

Parabolic SAR provides excellent exit points.

In an upwards trend, you should close long trade positions when the price falls below Parabolic SAR technical indicator

In a downwards trend, you should close short trades when price rises above the Parabolic SAR Indicator.

If you're long then the price is above the Parabolic SAR, the Parabolic SAR trading indicator will move up each day, regardless of direction in which the price is heading. The amount the Parabolic SAR indicator moves up depends on the amount that the prices moves.

Parabolic SAR Indicator - Indicator - Automatic Stop Loss Order & TakeProfit Order Indicator

Picture of parabolic SAR & how it's used

Bollinger Band

Bollinger Band use standard deviations as an estimate of the market volatility. Since standard deviation trading indicator is an estimate of the market volatility, the Bollinger band are self-adjusting meaning they widen during periods of higher volatility and contract during periods of lower market price volatility.

Bollinger Band consist of 3 bands designed to encompass the majority of a 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 the upper band & also the lower band. Upper band's distance and lower band's distance from the middle-band is usually determined by market volatility.

Since these Bollinger Band are used to encompass the price action, the bollinger bands can be used by traders to set stop losses just outside the levels of the bands.

Bollinger Band Setting Stop Loss Order Level - Bollinger Band Technical indicator

Fibonacci Retracement Levels Indicator

Fibonacci retracement levels provide levels of support & resistance, these can be used to set stoploss areas.

Fibonacci Retracement level 61.80% is the most commonly used level for setting stoplosses. A stoploss order should be placed just below 61.80 % fib retracement level

The 61.80% Fibo retracement level technical indicator is used to set these orders because its rarely hit.

Fibo Indicator StopLoss Order Setting at 61.8% Retracement Level

Fib retracement level 61.8% - Fibonacci Indicator

Support and Resistance Areas Lines

Support and resistance zones can be used to set stoploss order levels where the stop loss orders are set just above or below the support or resistance.

• Buy Trade - Stop-Loss Order set just a few pips below the support

Buy Trade - StopLoss set few pips below the support

• Sell Trade - Stop Loss Order set a few pips above the resistance

Sell Trade - Stop-Loss Order set few pips above the resistance

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