Stocks Indicators For Setting Stop losses In Stocks
Some stock indicators are used for setting stop losses taking away the need for stock traders to perform complex calculations on where to place these stop loss orders.
A stock trading systems trader can also place a stop loss order according to these indicators. Some stocks technical indicators use mathematical equations to calculate where the order stop loss order should be set so as to provide an optimal exit. These stocks indicators can be used as the basis for setting stop loss orders. These stocks indicators follow stocks price action of a stocks instrument closely and define the boundaries which the stocks prices should move along in. When the stocks price moves outside these boundaries it is therefore best to close the open stock trades because stocks price stops moving in that particular direction.
Some of the Technical stocks indicators that can be used to set stop loss orders are:
Parabolic SAR Technical Indicator
Parabolic SAR is like an Automatic Stop Loss Stocks Order & Take Profit Stocks Order Indicator used to set a trailing stocks price stop loss
Parabolic SAR provides excellent exit points.
In an upwards stocks trend, you should close long trades when the price falls below the Parabolic SAR indicator
In a downwards stocks trend, you should close short trades when the price rises above the Parabolic SAR.
If you are long then the stocks price is above the parabolic SAR, the SAR will move up every day, regardless of the direction in which the stocks price is moving. Amount the Parabolic SAR indicator moves up depends on the amount that stocks prices moves.
Parabolic SAR - Stock Indicator - Automatic Stop Loss Stocks Order & Take Profit Stocks Order Technical Indicator
Picture of parabolic SAR & how it is used
Bollinger Bands Technical Indicator
Bollinger bands indicator use standard deviations as a measure of volatility. Since standard deviations technical indicator is a measure of volatility, the Bollinger bands are self-adjusting meaning they widen during periods of higher volatility and contract during periods of lower volatility.
Bollinger Bands indicator consist of 3 bands designed to encompass the majority of a stocks instruments stocks price action. The middle band is a basis for the intermediate term stocks trend, mostly it is a 20 day period simple moving average, which also serves as the base for calculating the upper band and lower band. The upper band's and the lower band's distance from the middle band is determined by price volatility.
Since these Bollinger bands are used to encompass the stocks trading price action, the bands can be used by traders to set stop losses just around the area outside of these bands.
Bollinger Band Setting Stop Loss Stocks Order Level - Bollinger Bands Stocks Technical indicator
Stock Fibonacci Retracement Levels Indicator
Fib retracement levels provide areas of support and resistance, these areas can be used to set stoploss levels.
Stock Fibonacci Retracement level 61.8 % is the most commonly used level for setting stop-losses. A stoploss order should be set just below 61.8 % fib retracement level
The 61.80% Fibo retracement level indicator is used to set these orders since its rarely hit.
Fibonacci Indicator StopLoss Stocks Order Setting at 61.8% Retracement Level
Fibonacci retracement level 61.8% - Fibonacci Indicator
Support & Resistance Levels Lines
Support and resistance levels can be used to set stop loss levels where the stop loss orders are set just above or below the support or resistance.
- Buy Stocks Trade - Stop Loss Stocks Order set few pips below the support
Buy Stock Trade - Stop Loss Stocks Order set few pips below the support
- Sell Stocks Trade - Stop Loss Stocks Order set a few pips above the resistance
Sell Stock Trade - Stop Loss Stocks Order set a few pips above the resistance
