Chande Kroll Stop

The Chande Kroll Stop plots volatility-adjusted trailing stop lines for both trade directions at once. Each side starts from the extreme price of the last p bars (the highest high or the lowest low), offsets it by x times the Average True Range, then extends the preliminary stop with the most protective value of the last q bars. The result is a pair of stepped lines: Stop Long, the trailing exit for longs, and Stop Short, the trailing exit for shorts. Defaults follow the original parameters of p 10, x 1, and q 9, and the build is the standard implementation as published by Tushar Chande and Stanley Kroll.

How to Trade the Chande Kroll Stop?

• Price above both lines: uptrend regime: longs are favored and Stop Long defines the trailing exit.
• Price below both lines: downtrend regime: Stop Short caps rallies as the exit for shorts.
• Price between the lines: an undecided corridor many traders simply sit out until price picks a side.
• Close under Stop Long: the long exit: the move has given back more than its volatility allowance.
• Close over Stop Short: the mirror exit for shorts.

Chande Kroll Stop Settings

• ATR Length (P) (default 10): the lookback shared by the ATR and the highest-high / lowest-low extremes. Larger values anchor the stops to older extremes; smaller values hug recent price.
• ATR Multiplier (X) (default 1): the offset applied to the preliminary stops. Higher values widen both lines and tolerate more noise; lower values tighten the trail and invite whipsaw exits.
• Stop Length (Q) (default 9): the lookback over which the preliminary stops become the final levels. Higher values make the lines steadier and slower to release.

Alerts

The script provides a Long Stop Hit alert when the close crosses under Stop Long, and a Short Stop Hit alert when the close crosses over Stop Short.

Frequently Asked Questions

How does the Chande Kroll Stop differ from the Chandelier Exit?

Can the Chande Kroll Stop be used to filter entries?

What is the main weakness of the Chande Kroll Stop?