How To Calculate Trailing Stop Loss Indices Trading Order Setting
A trailing stop loss stock indices order setting level can be calculated using indices indicators such as the Parabolic SAR indicator.
If the stock indexes trading market rises by a set number of pips the parabolic SAR indicator then adjusts the trailing stop loss level upwards accordingly.
Also if the stock indexes trading market falls by a set number of pips the parabolic SAR indicator then adjusts the trailing stop loss level downwards accordingly.
Parabolic SAR Indices Indicator
Parabolic SAR is used by stock indexes traders to set a trailing stock indexes price stop loss levels
The Parabolic SAR provides good exit points that keep trailing the stock indexes price on a stock indexes trading chart.
In an upward indices trend, you should close long positions when the stock indexes price falls below the parabolic SAR
In a downward indices trend, you should close short positions when the stock indexes price rises above the parabolic SAR.
Parabolic SAR - Stock Indexes Indicator for Setting Trailing Stop Loss Indices Trading Order Levels
Bollinger Bands Indices Indicator
Bollinger bands stock indices indicator use standard deviation as a measure of volatility. Since standard deviation is a measure of volatility, the bands are self-adjusting meaning they widen during periods of higher volatility and contract during periods of lower volatility.
Bollinger Bands consist of 3 bands designed to encompass the majority of a trading instruments stock indexes price action. The middle band is a basis for the intermediate term trend, typically it is a 20-period simple moving average, which also serves as the base for the upper and lower bands. The upper band's and lower band's distance from the middle band is determined by volatility.
Since these bollinger bands are used to encompass the trading instrument stock indexes price action, the bands can be used to set stop losses just outside the area of the bands.
Setting Trailing Stop Loss Indices Trading Order Level using Bollinger Bands Indices Indicator