Where Should I set a StopLoss Order using Support and Resistance Zones?

A trader can use support and resistance zones on the chart to determine where to place their stop loss orders using the techniques described on the example below:

Determining Where You Should place a Stop Loss Order using Resistance Zones in XAUUSD

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

Given that stop losses tend to congregate at key points, when one of these resistance zones is tested by the price, other trading orders are set off.

StopLoss orders tend to accumulate just above the resistance zones.

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

If this resistance level is broken the price movement can move towards the opposite direction of original trend, but if this resistance level isn't broken the price will continue moving in the intended direction.

Stop Loss Order Level Setting using Resistance Zones in XAUUSD

Setting Stop Loss Order above the Resistance Level

Determining Where You Should place a Stop Loss Order using Support Zones in XAUUSD

Another way of setting stoploss orders is to use support levels, on the charts.

Given that stop losses tend to congregate at key points, when one of these support zones is tested by the price, other trading orders are set off.

Stop loss orders tend to accumulate just below the support zones.

A support zone should act like a barrier for price movement, this is why these support levels are used to set stop losses.

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

Stop Loss Order Level Setting using Support Zones in XAUUSD

Setting Stop Loss Order below the Support Level