Trailing Stop Loss Order Levels Technical Analysis & Trailing Stop Loss Order Levels Trading Signals

Developed by Tushar Chande.

This is a volatility based indicator that is used to estimate levels to set stoploss levels. 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

The long stop level line has a much wider range in terms of where it trails stop loss as compared to the short stop level which implements a tight stop loss.

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

Stock Technical Analysis & How to Generate Signals

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

Upward Trading Trend

In an upwards trend these levels will follow below the stock 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 stock price goes higher the trailing level also goes higher. An exit signal is generated when price crosses below these levels.

Indices Uptrend

Downwards Trading Trend

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

Indices 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 trailing stop loss.