Calculate Stop Loss Levels Using Bill Williams' Technique in MetaTrader 4

Author

Vladmir Hlystov

Calculate Stop Loss Levels with Bill Williams' Technique

In his book, "Trading Chaos: Applying Expert Techniques to Maximize Your Profits" (Chapter 7, Level One: Novice Trader, p.95), Bill Williams vividly describes Stop Loss (SL) placement:

"...We place the airbag one tick above or below the high or low of the second bar back on a significantly higher time frame (or the next bar back that has both a higher high and a higher low or a lower high and lower low). This is our airbag protection, safeguarding us against a volatile market that moves against our position. Remember, it's not necessarily an entry signal; it’s a shield against substantial losses..."

This indicator calculates and displays Stop Loss levels for Buy and Sell positions that don’t have an SL set, following this strategy.

Indicator Variables:

int BAR = 200; // searching within the last 200 bars
int minSL = 25; // activated when 2 bars are not found
bool show_bar = true; // display bars searched for SL
bool show_info = true; // show active orders without SL
color color_BAR = DarkSlateGray; // color of the bar where SL is searched
color color_Curr_BAR = Gray; // color of the current bar
color color_SL = Gray; // color of the SL markers

Stop Loss Level Calculation Example

Fig 1. Bar Found for SL Calculation

SL Not Found Example

Fig 2. Upper Bar Not Found (SL for Sell Position Determined Using Higher Timeframe)

Recommendations:

Set your chart shift to display the SL level on the right side of the current bar:
To enhance visibility, set show_bar=true.
Good luck and happy trading!