Stock Indicators For Setting Stop losses In Stock Trading
Some stock indicators are used for setting stop losses taking away the need for stocks traders to perform complex calculations on where to place these stop loss stock orders.
A stock trading systems trader can also place a stop loss stock trading order according to these stock technical indicators. Some stock technical indicators use mathematical equations to calculate where the order stop loss stock order should be set so as to provide an optimal exit. These stock indicators can be used as the basis for setting stop loss stock orders. These stock indicators follow stocks price action of a stock trading instrument closely and define the boundaries which the stock prices should move along in. When the stocks price moves outside these boundaries it is therefore best to close the open stocks trades because stocks price stops moving in that particular direction.
Some of the Technical stock indicators that can be used to set stop loss stock orders are:
Parabolic SAR Stocks Trading Indicator
Parabolic SAR is like an Automatic Stop Loss Stock Trading Order And Take Profit Stock Trading Order Indicator used to set a trailing stocks price stop loss
The Parabolic SAR provides excellent exit points.
In an upward stock trend, you should close long positions when the stocks price falls below the Parabolic SAR stock indicator
In a downward stock trend, you should close short positions when the stocks 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. The amount the Parabolic SAR indicator moves up depends on the amount that stock prices moves.
Parabolic SAR - Stocks Indicator - Automatic Stop Loss Stock Trading Order And Take Profit Stock Trading Order Indicator
Picture of parabolic SAR and how it is used
Bollinger Bands Stocks Trading Indicator
Bollinger bands indicator use standard deviation as a measure of volatility. Since standard deviation 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 stock indicator consist of 3 bands designed to encompass the majority of a stock trading instruments stocks price action. The middle band is a basis for the intermediate term stock 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 stock price action, the bands can be used to set stop losses just outside the area of the bands.
Bollinger Bands Setting Stop Loss Stock Trading Order Level - Bollinger Bands Stock Technical indicator
Stock Trading Fibonacci Retracement Levels Indicator
Fibonacci retracement levels provide areas of support and resistance, these areas can be used to set stop loss levels.
Stock Trading Fibonacci Retracement level 61.8 % is the most commonly used level for setting stop losses. A stop loss stock order should be set just below 61.8 % Fibonacci retracement level
The 61.8 % Fibonacci retracement level is used to set these orders since its rarely hit.
Fibonacci Indicator Stop Loss Stock Trading Order Setting at 61.8 % Retracement Level
Fibonacci retracement level 61.8% - Fibonacci Stock Indicator
Support and Resistance Levels Lines
Support and resistance levels can be used to set stop loss levels where the stop loss stock orders are set just above or below the support or resistance.
- Buy Stock Trade - Stop Loss Stock Trading Order set a few pips below the support
Buy Stock Trade - Stop Loss Stock Trading Order set a few pips below the support
- Sell Stock Trade - Stop Loss Stock Trading Order set a few pips above the resistance
Sell Stock Trade - Stop Loss Stock Trading Order set a few pips above the resistance