The Chandelier Exit relies on the Average True Range (ATR) indicator and is tailored to maintain traders within a trend until a clear trend reversal occurs. It operates on the premise that a trend reversal becomes increasingly likely when the price of an asset moves counter to the prevailing trend by up to three times the average volatility. Its computation involves utilizing the high and low prices across a specified timeframe to derive the Chandelier Exit value.
One of the biggest challenges traders face is when to cut their losses and close a trade, this indicator will help prevent unnecessary losses.
How to Use the Chandelier Exit?
This is a simple indicator to use, the idea is to use it as a signal to exit a trade and not enter, so when you have a buy trade open, you continue to let it run until the price drops below the chandelier red rot. The opposite is true for a short-sell trade, you continue to let it run while the green dots are above the price and close the trade when the price rises above the dots.
Because of the strong correlation between stop loss and volatility, traders use the Chandelier Exit indicator as a trailing stop-loss mechanism to shield themselves from losses stemming from trend reversals. Many seasoned traders advocate employing the Chandelier Exit primarily as a stop-loss tool rather than relying on it for generating trading signals. This preference is due to its susceptibility to producing erroneous signals when used solely as a trading indicator.
When using Chandelier Exit for technical analysis, Charles Le Beau recommended setting an input period of 22 and a multiple of 3 times the Average True Range.
Indicator Settings
When you attach the indicator to a chart or edit the indicator settings, you will have various adjustments you can make.
- ATR Period - The periods for the average true range indicator.
- ATR Multiplier - The multiplier value used in the indicator's formula.
- MA Type - Choose from 8 different moving average types.
Telegram Alerts
When a signal occurs, the indicator will send a Telegram alert directly to your PC or mobile device, this is much faster than email as it is a push notification.
Convert to Automated Robot
Contact our development team with your project requirements if you want to convert this to an automated trading system with additional confirmation signals and risk management.
How To Install & Remove
First, make sure you have the cTrader trading platform installed and then unzip the file and double-click on it to automatically install it onto the platform.
Any Questions?
If you have any questions or bugs, please first search our product help forum for the answer, if you cannot find it, post a new question.
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