Where are the stops? Thursday June 20, gold and silver

(Kitco Commentary) – Below are today’s likely price locations of buy and sell stop orders for the active Comex gold and silver futures markets. Asterisks (**) indicate the most critical stop order placement level of the day (or likely where the highest concentration of stop orders were placed that day).

See below for a detailed explanation of stop orders and why knowing, in advance, where they are likely to be can be beneficial to a trader.

Stop Orders Defined

Stop orders in trading markets can be used for three purposes: First: to minimize a loss on a long or short position (protective stop). Two: To protect a profit on an existing long or short position (protective stop). Third: To initiate a new long or short position. A buy stop order is placed above the market and a sell stop order is placed below the market. Once the stop price is reached, the order is treated as a “market order” and will be executed at the best possible price.

Most stop orders are located and placed based on key technical support or resistance levels on the daily chart, which, if breached, would significantly alter the short-term technical situation of that market.

Having a good idea, in advance, of where the buying and selling stops are can give an active trader a better idea of ​​the price level at which buying or selling pressure will intensify in this market.

The main advantage of using protective stops is that before a trade is initiated, you have a pretty good idea of ​​where you will exit the trade if it loses. If the trade becomes a winner and profits start to pile up, you may want to use trailing stops, where protective stops are adjusted to help lock in a profit if the market turns against your position.