Trailing Stop Loss Levels Analysis Signals
Created and Developed by Tushar Chande.
This is a volatility based trading indicator that's used to gauge/estimate levels to set stoploss order levels. Distance at which it estimates trailing stop level is determined based on the price volatility.
The Levels of the 2 lines, these 2 lines represent:
- Long Stop Level - Blue Line
- Short Stop Level - Red Line
Long stop level line has much wider range in terms of where it trails stoploss order as compared to the short stop level which implements a tight stoploss order.
This indicator is volatility based when it comes to trailing and following the price action. Trailing Stop Levels will trail the above the price in a downward market trend and trails below the price in an upward trend.
FX Analysis and Generating Signals
These will be calculated using volatility to calculate where to plot the technical indicator - this is used to figure out what levels to set stop losses.
Upward Trend
In an upwards trend these technical levels will follow below the 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 stoploss order that isn't very tight. As the price goes higher the trailing level also moves higher. An exit signal is generated/derived when the price crosses below these levels.
Uptrend
Downwards Trend
In a downward trend the stop loss levels will trail above the currency price these 2 levels can be used to set the stop loss order levels. As the price drops further these levels will continue to drop lower and follow the price lower. An exit signal is derived and generated when price crosses above these technical levels.
Downtrend
When price starts and begins to retrace these technical levels will not retrace but will remain at their levels, this will mean at some point the trade will be closed by the trailing stoploss order.
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