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Trailing Stop Loss Levels Analysis Signals

Created and Created 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.

Trailing StopLoss Levels Indicator

The Levels of the 2 lines, these 2 lines represent:

  • Long Stop Level - Blue Line
  • Short Stop Level - Red Line

The long stop level trails with a wide range. It sets the stop loss far out. The short stop keeps it tight.

This specific indicator is predicated on market volatility for the purpose of trailing and closely tracking price movement. In a declining market trend, Trailing Stop Levels will maintain a position above the price, conversely trailing beneath the price during an upward trend.

FX Analysis and Generating Signals

These will be worked out using how much prices change to work out where to put the technical indicator - this is used to work out where to set stop losses.

Upward Trend

In an upwards trend these technical levels will follow below the price. The trader can use either short stop level line to set up a tight stop loss or the long stop level to set a stoploss order that isn't very tight. As the price moving higher the trailing level also moves higher. An exit signal is generated/derived when the price crosses below these levels.

Trailing stop loss levels - How to use trailing stop indicators

Uptrend

Downwards Trend

During a downtrend, the stop-loss levels will be set above the prevailing currency price, and these two indicators can be used to position stop-loss orders. As the price continues to decline, these levels will also trail downwards beneath the price action. An exit signal is generated if, and when, the price crosses back above these defined technical levels.

Trailing Stops in Downtrends - Set Stop Loss Levels for Trends

Downtrend

When the price starts to retrace, certain technical levels will remain unchanged. This stability could eventually trigger a trade closure through a trailing stop-loss order.

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