The Chandelier is an indicator that helps you manage trailing stops. It uses the Average True Range (ATR) as part of its calculation.
The Chandelier Stop is one of the studies that comes with the
Example of the Chandelier Stop using a 5 minute e-mini S&P future chart with a timeframe restricted RTH (Regular Trading Hours).
In the above example chart I show 2 Chandelier Long Stop lines. The yellow lines uses a look back period of 22, a coefficient of 5 and an ATR length of 22. The blue line uses the same look back period and ATR length but has a coefficient of 6 instead of 5. However, there is also 1 more very important distinction between these 2 stop lines. The blue line has the Lock Stops setting set to true. This setting prevents the stop from lowering itself while it hasn't been hit. It follows the concept that stops can only be moved towards the target and not away from the target. This setting is switched on by default.
Here are two more examples of the Chandelier Stop being used in a short scenario. The parameters are the same as those described above except that the first chart shows the Chandelier Stop with the lock option on the second without.
Configuration and Options
To configure the study please right click on an advanced chart that has the study loaded and from the menu select Edit Studies... and in the subsequent dialog box select the appropriate study from the drop down list in the top left hand corner next to the label Study:
|Lookback period||Number of bars to use in the calculation. Default 22.|
|Coefficient/multiplication factor||This is a number specified by the trader which is multiplied against the ATR during the calculation of the Chandelier Exit. Default is 3.|
|Line Thickness||Thickness of line. Default is 1.|
|Line Color||Color of line. Default is blue.|
|Long Stop||Set this to true (default) if you are calculating where to place a stop for a long position. Set this to false if you are calculating where to place a stop for a short position.|
|Lock Stops||This is a feature introduced by MyPivots that we have not seen mentioned elsewhere. This prevents the stop from being made wider after it has been moved in. By default this is set to true.|
|ATR Length||The number of bars to use in the calculation of the Average True Range. Default is 22.|
Support is always available for the indicators. We suggest that you post your support question in the MyPivots Support Forum for quickest response.
Other indicators in this Pack/Series: