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Trailing Stop Loss Levels Analysis Signals

Created by Tushar Chande.

This is a volatility based trading indicator that's used to estimate levels to set stoploss order levels. Distance at which it estimates trailing stop level is determined based on the market volatility.

Trailing StopLoss Levels Indicator

The Levels of the 2 lines, these two 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 stop loss as compared to the short stop level that implements a tight stoploss order.

This indicator is volatility based when it comes to trailing and following the market 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.

Forex Analysis & Generating Signals

These will be calculated using volatility to calculate where to plot the technical indicator - this is used to determine what levels to set stop losses.

Upwards Trend

In an upwards trend these levels will follow below the currency 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 stop loss that isn't very tight. As the price goes higher the trailing level also goes higher. An exit signal gets generated when the price crosses below these levels.

Trailing StopLoss Levels Analysis - Trailing Stop Loss Levels Trading Indicator

Uptrend

Downward Trend

In a downward trend the stop loss levels will trail above the currency price this two levels can be used to set these levels. As the price drops further these levels will continue to drop lower and follow the price lower. An exit signal gets generated when price crosses above these levels.

Trailing Stop Levels Indicator in Downtrend - Trailing StopLoss Levels Technical Analysis

Downtrend

When price starts to retrace these 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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