SafeZone Stop

 The SafeZone Stop is developed by Alexander Elder to provide stops that are tight enough to protect capital and yet laxed enough to prevent random fluctuations. It requires a look-back period (default 10) and a coefficient (2-3) as parameters.

SafeZone Long (SZL)

This is the stop for going on a Long position. During an uptrend, all the downside penetrations are averaged for the selected look-back period. The SafeZone Stop that allows the average market noise to be avoided is then calculated as follows:

Stop = Price - (Average Downside Penetrations * Coefficient)

SafeZone Short (SZS)

This is the stop for going on a Short position. During a downtrend, all the upside penetrations are averaged for the selected look-back period. The SafeZone Stop that allows the average market noise to be avoided is then calculated as follows:

Stop = Price + (Average Downside Penetrations * Coefficient)


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