Automate your stop-loss using the Chande Kroll Stop Indicator
What if you had known beforehand where to place your stop loss when you want to buy or sell a currency pair? What if your stop-loss never got hit while trading? And if price volatility works to your advantage? What if you can rightly predict the direction of the trend? While if you have a crystal ball that tells you a trend is about to start? Yes, the Chande Kroll Stop is an indicator that can give you an insight on setting up a stop-loss for your buy and sell orders.
The Chande Kroll indicator is an indicator designed for the MT4 trading platform. If you don’t have the MT4 trading platform, you can’t use it to trade the market since it was developed for the platform. Unlike most top 10 mt4 indicators, the Chande Kroll Stop indicator uses the Average True Range indicator to help traders identify a trending market by calculating the direction of the average price over a period of time.
You can get tremendous trading insights using this indicator. To help you, here are a few outlines of the trading insight you can get from the Kroll stop indicator.
The Chande Kroll Stop Indicator
Today, the forex industry has numerous indicators that traders use to analyze the market. While everyone has their strategy, the market goes through three phases – trending, ranging, and reversal.
A trending market is one that moves in a particular direction, which could be upward, downward or sideways. A ranging market is one whose trend stops and is followed by consolidation or ranging environment. In reversal, the direction of the trend changes from downward to upward or from upward to downward.
The Chande Kroll indicator is a trend-following indicator, which identifies the stop-loss for a short or long position. It is perfect to combine it with the pin bar indicator mt4.
It does this by using a variant of directional movement to calculate the stop-loss. There are different ways of trading using the Chande indicator:
1. You buy when the price crosses above both lines
2. You sell whenever the prices cross below both lines
3. Trade when both lines cross each other
3 Benefits of using this Indicator
Indicators are potent tools that can turn a losing trader to a profitable one if used correctly. Most traders make the mistake of not understanding what and how to use an indicator. If you knew what benefit an indicator offer, you could find ways to use it correctly.
The Chande Kroll Stop comes with various benefits; already, you know how to use it. In this section, you will learn the benefits of using it when trading.
It allows you to know when a trend is about to start. You can call it the trend spotter because you can know when and where a trend will end. With it, you can spot a period when the market is about to reverse or move in a new direction. Every professional trader knows the importance of cruising into the trend when it is new – you can ride through it and make a profit.
No word can express the feeling of you spotting a trend before it happens. The indicator helps traders to identify these periods when the market wants to make a new trend. The indicator indicates this by using the crossing of the two signal lines in a different direction. Usually, when a new trend begins, the signal lines of the indicator will cross towards the new trend direction. Then you can identify this new direction by looking at the new trend direction.
For example, a new uptrend will show both signal lines cross each other in an upward direction. However, if both signal lines cross in a downward trend, you will observe that both signal line will move in a downward direction.
You can use the Chande indicator to identify opportunities on when to enter a trade in the trend direction. It means you can know when the trend changes. For example, if the trend changes from a short to a long trend, the Chande Kroll indicator will print the signal lines immediately in such direction in a way that you can notice the sudden change of direction.
With this, you can trade in that new direction of the trend. Furthermore, it helps improve your ability to analyze the market efficiently. Traders like you can generate trades using this indicator towards the trend direction. For a moment, imagine you making a minimum loss on your trading career with high-profit margins. That will surely change your trading career and trading mindset.
It enables you to know how long to stay in a trend. You can use the signal lines as your stop-loss targets while increasing or reducing your target point depending on the direction of the signal lines. However, you can do this in an active trend since the indicator will move along with the price.
Instead of waiting for the price to reach your take profit point, you can use the indicator to lock your profits as it moves far from your stop-loss. You can progressively lock your profits when you the Chande Kroll indicator while you ride along the trend pending when it changes its direction. However, if your analysis goes against you, you get stop out from your order once it reaches the indicator lines.
Price only gets to the indicator lines when it doesn’t continue in the current direction. You should see this as a change in trend.
Conclusion On Chande Kroll Stop
Trading should be an exciting adventure if you know the essential tools and indicators to use. The Chande Kroll Stop indicator is a reliable indicator that can help protect your profit by keeping your trade open as long as it moves in the direction of the trend.
With the trailing stop feature, it is flexible to set your stop-loss. It is quite different from most indicators that come with fixed stop-loss. The only time your trade closes is when the price drops below the blue indicator line. What it means is that price has reached your stop-loss set. On the other hand, if the price moves above the red signal line, your trades will close.
Before ending, do you know here on this platform, there are other necessary tools and indicators you can use to trading the forex market effortlessly? So check out the precious collection of tools and indicators through this link to make your trading seamless.
Trading is exciting; don’t make it boring. Get access to unlimited tools and indicators to trade. These tools are available for both new and professional traders; you never stop learning in the forex industry unless you are not a trader in the largest financial market of the world.
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