Elder Chandelier Short Exit
The Chandelier Exit, introduced by Charles LeBeau, is described in "Come into My Trading Room" book.
It calculates each stop on a short position in a downtrend from the lowest point reached during that decline. The Chandelier Exit uses a multiple of the Average True Range (ATR), adding it to the lowest low since the trade was entered. It creates a new trade whenever the previous trade is stopped out.
Chandelier Stops differ from traditional stops by having the ability to move against you if the anchor point stays the same but the ATR increases due to volatility. A more conservative approach is to ignore any change in a stop that increases your risk.
- Factor (3) – This is the factor for multiplying the ATR when computing the Chandelier. You may use fractions – this does not need to be an integer;
- ATR_Days (22) – Number of days for computing ATR;
- Wingding_Symbol (159) – Symbol to be displayed.