Concept
Chandelier Stop
Chandelier Stop is a Trend concept. The Library holds 3 implementations, each one a working definition you can pull into Quant.
Top Chandelier Stop indicators
3 total
What is a Chandelier Stop?
The chandelier stop, usually called the chandelier exit, is a volatility-scaled trailing stop developed by Chuck LeBeau and popularized by Alexander Elder. For a long position it hangs from the highest high of the lookback: the stop is that high minus a multiple of ATR; shorts mirror it from the lowest low plus the multiple. A common parameterization uses a 22-bar extreme and 3 ATRs. The name comes from the stop hanging from the price ceiling like a chandelier.
Anchoring to the extreme rather than the close is the distinctive design choice: the stop advances whenever the trend prints a new extreme and gives ground mainly when volatility expands (or when the anchoring extreme ages out of the lookback window). In the raw formula, a rising ATR without a new high lowers a long stop; many implementations therefore add a ratchet so the stop can only tighten. The two behaviors differ meaningfully in volatile pullbacks, so know which one you are running.
How traders use it
- As the exit leg of trend-following systems: the ATR cushion is sized to tolerate ordinary noise while forcing an exit once price gives back a volatility-scaled chunk from the peak; wider multiples exit later, tighter ones get shaken out more often.
- As a continuous bias line: plotted on both sides and flipped on breach, it behaves like other ATR trailing regimes, with price above the long stop read as an intact uptrend.
- As the sizing input: because the initial stop is expressed in ATRs, risk per unit is known up front and slots directly into ATR-based stop distance position sizing.
Chandelier Stop vs other trailing stops
Supertrend: Supertrend also offsets by an ATR multiple, but from the bar midpoint rather than the extreme, with band logic that flips a plotted regime line. The chandelier tracks trend extremes directly and is usually framed as an exit rather than a signal plot.
Volatility Stop: The classic Wilder-lineage volatility stop trails an ATR multiple from the most favorable close. Because the highest high sits at or above the highest close, a chandelier with the same multiplier sits closer to price for longs and tends to exit somewhat earlier.
Parabolic SAR: Parabolic SAR trails via an acceleration factor that tightens with time and new extremes, regardless of volatility. The chandelier's distance is pure volatility: it never tightens simply because a trend has aged.
Related concepts · Trend-following systems
Concept family
Trend
100 concepts mapped · 88 in the Library
Chandelier Stop FAQ
What are the standard chandelier exit settings?
The most-cited defaults are a 22-period highest high (lowest low for shorts) and a 3.0 multiple of 22-period ATR. None of this is sacred: a larger multiple tolerates deeper pullbacks and exits later, a smaller one exits earlier but is shaken out more often, and intraday traders commonly shorten the lookback.
Can the chandelier stop move against your position?
In the raw formula, yes. The stop is the extreme minus a multiple of ATR, so an ATR expansion without a new extreme lowers a long stop. Many implementations ratchet the stop so it never loosens. Both versions exist in the wild and behave very differently in volatile pullbacks, so verify which one you are using.
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