Trailing Stop Loss Stock Indices Order Levels Stock Indices Technical Analysis & Trailing Stop Loss Stock Indices Order Levels Stock Indices Signals

Developed by Tushar Chande.

This is a volatility based technical indicator that's used to estimate levels to set stop loss 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

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

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

Indices Technical 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.

Upwards Indices Trading Trend

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

Stock Indices Trading Uptrend

Downwards Stock Indices Trading Trend

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

Stock Indices Trading Downtrend

When stock index 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.