How to Calculate Trailing Stop Loss Indices 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 indices trading market rises by a set number of pips the parabolic SAR technical indicator then adjusts the trailing stop-loss level upward accordingly.

Also if the stock indices trading market falls by a set number of pips the parabolic SAR indicator then adjusts the trailing stop loss level downwards accordingly.

Parabolic SAR Indicator

Parabolic SAR is used by stock indices traders to set trailing stock indices trading price stop loss zones

Parabolic SAR provides good exit points which keep trailing the stock indices price on a stock indices chart.

In an upwards indices trend, you should close long trade positions when the stock indices price falls below the parabolic SAR

In a downward indices trend, you should close short trade positions when the stock indices price rises above the parabolic SAR.

Parabolic SAR - Stock Indices Technical Indicator for Setting Trailing Stop Loss Indices Order Levels

Bollinger Bands Indicator

Bollinger bands stock indices indicator use standard deviation technical indicator as a measure of price volatility. Since standard deviation indicator is a measure of volatility, bands are self adjusting which means they widen during the periods of higher volatility and contract during the periods of lower volatility.

Bollinger Band consist of Three bands designed to encompass the majority of a trading instruments stock indices trading price action. The middle band is the one that forms a basis for the intermediate term trend, typically it is 20 period simple moving average, which is also the base for upper and lower bands. The upper band's distance and lower band's distance from the middle band is determined by volatility of trading price.

Since these bollinger bands are used to encompass the trading instrument stock indices trading price action, the bands can be used by indices traders to set stop losses just around the area outside of these bands.

Setting Trailing Stop Loss Indices Order Level using Bollinger Bands Indicator