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Creator: Dr. Alexander Elder
Period: 10
For trailing stop-loss mechanisms, Elder developed a safe zone indicator as an alternative to moving averages or other indicators.
There are two lines plotted in the Safe Zone indicator on the chart.
1 – The green line is a bullish safe zone line
2 – The red line is a bearish safe zone line
According to this indicator, bullish trades are in a safe zone as long as they are trading above the green line. Bearish trades are safe as long as they trade below the red line. Safe zone lines can be used as stop-loss lines from a trading perspective.
The indicator table value in TradePoint & RZone also provides you with a list of all values of this indicator for any group of stocks. This will allow you to compare the readings of this indicator across different stocks.
This indicator is also available in the System Builder of RZone & TradePoint for all charting methods. Using the system builder, you can develop various strategies based on the different conditions already present in this indicator. Additionally, it can be used with other indicators or price patterns to develop effective trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.
The indicator is applicable to all types of charting. Calculated based on the number of columns on P&F charts, bricks on Renko charts, lines on Line-break charts, candles on Heikin ashi charts, and lines on Kagi charts. While the formula and reading of the indicators remain the same, they become more dynamic on these charts.