Trailing Stop Loss Order Levels Analysis and Trailing SL Stocks Order Levels Signals

Developed by Tushar Chande.

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

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 the stop loss as compared to short stop level that implements a tight stop loss.

This indicator is volatility based when it comes to trailing and following the stocks price action. Trailing Stop Levels will trail the above the stocks price in a down ward market trend and trails below the stocks price in an upward trend.

Stock Analysis & How to Generate Signals

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

Upward Trend

In an upward trend these levels will follow below the stocks 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 is not very tight. As the stocks price goes higher the trailing level also goes higher. An exit signal is generated when price crosses below these levels.

Stocks Trading Uptrend

Downward Trend

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

Stocks Trading 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 stop loss.