# Chandelier Exit

Plots a trailing stop hung from the highest high (for longs) or lowest low (for shorts) of a lookback window, offset by a multiple of the Average True Range. Defaults are a 22-period ATR with a multiplier of 3, following the classic parameterization. This is the standard raw Chandelier Exit with no added logic.

- Indicator in the LuxAlgo Library, by LuxAlgo, published Apr 13, 2020.
- Access: free.
- Concepts: [Chandelier Stop](https://www.luxalgo.com/library/concept/chandelier-stop/) (primary)
- Open on Vela: https://vela.luxalgo.com/chart?pineScriptCodeId=iprdi1bdv8pbg4m3hbkadxjd
- Page: https://www.luxalgo.com/library/indicator/chandelier-exit/

The **Chandelier Exit** is a volatility-scaled trailing stop that hangs from the extremes of the recent trend. For longs, the stop is the highest high of the lookback window minus a multiple of the Average True Range; for shorts, the lowest low plus the same multiple. Both lines plot continuously, stepping with new extremes. Defaults are a 22-period ATR with a multiplier of 3, following the classic parameterization. By default this is the standard raw Chandelier Exit with no added logic; an optional Ratchet Stops input suits traders who prefer a stop that only tightens.

## How to Trade the Chandelier Exit?

- **Close below the Long Stop**: the uptrend has given back its volatility allowance from the peak, the long exit this indicator exists for.
- **Close above the Short Stop**: the mirror exit for shorts.
- **Price riding above a rising Long Stop**: the uptrend is intact; each new high within the lookback steps the stop forward.
- **Stop distance as risk**: the gap to the active stop is ATR-denominated and feeds volatility-based sizing.

Entries come from elsewhere: breakouts, crossovers, patterns; the chandelier manages the trade from its best extreme onward.

## Chandelier Exit Settings

- **Length** (default 22): the window for both the price extremes and the ATR. Longer values anchor to older extremes and advance slower; shorter values track recent swings tightly.
- **ATR Multiplier** (default 3): the volatility cushion. A larger multiple rides deeper pullbacks but gives back more at the end; a smaller one tightens the trail and adds shakeouts.
- **Ratchet Stops** (default off): prevents the long stop from falling and the short stop from rising, resetting once the close crosses through the stop, removing the raw formula's habit of letting a long stop slip lower when ATR expands without a new high.

## Alerts

Two alert conditions are built in: **Exit Long**, when the close crosses below the long stop, and **Exit Short**, when the close crosses above the short stop.

## Frequently Asked Questions

### How is the Chandelier Exit different from a fixed-percentage trailing stop?

A percentage stop keeps the same distance whether the market is asleep or in a storm. The chandelier scales by ATR and anchors to the trend's extreme rather than the last close, adapting without manual adjustment.

### When should I enable Ratchet Stops?

Enable it for a strictly one-way trail. In raw mode a volatility expansion without a new extreme can move the stop away from price: sound volatility budgeting to some, uncomfortable to others.

### Can the Chandelier Exit generate entry signals?

It is designed as an exit, but the lines double as a bias read: price above the long stop marks an operative uptrend. Most still pair it with an independent entry method.

## Related indicators

- [Chandelier Exit Oscillator](https://www.luxalgo.com/library/indicator/chandelier-exit-oscillator/) (Chandelier Stop): markdown at https://www.luxalgo.com/library/indicator/chandelier-exit-oscillator.md
- [SuperTrend AI (Clustering)](https://www.luxalgo.com/library/indicator/supertrend-ai-clustering/) (Supertrend): markdown at https://www.luxalgo.com/library/indicator/supertrend-ai-clustering.md
- [KNN Supertrend Horizon](https://www.luxalgo.com/library/indicator/knn-supertrend-horizon/) (Supertrend): markdown at https://www.luxalgo.com/library/indicator/knn-supertrend-horizon.md
- [Supertrend Parameter Sensitivity 3D](https://www.luxalgo.com/library/indicator/supertrend-parameter-sensitivity-3d/) (Supertrend): markdown at https://www.luxalgo.com/library/indicator/supertrend-parameter-sensitivity-3d.md
- [SuperTrend Recovery](https://www.luxalgo.com/library/indicator/supertrend-recovery/) (Supertrend): markdown at https://www.luxalgo.com/library/indicator/supertrend-recovery.md
- [Evasive SuperTrend](https://www.luxalgo.com/library/indicator/evasive-supertrend/) (Supertrend): markdown at https://www.luxalgo.com/library/indicator/evasive-supertrend.md
- [Gann HiLo Activator](https://www.luxalgo.com/library/indicator/gann-hilo-activator/) (Trend): markdown at https://www.luxalgo.com/library/indicator/gann-hilo-activator.md
- [Trend Magic](https://www.luxalgo.com/library/indicator/trend-magic/) (Trend): markdown at https://www.luxalgo.com/library/indicator/trend-magic.md

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Source: https://www.luxalgo.com/library/indicator/chandelier-exit/ (LuxAlgo Library). Free to use with attribution: https://www.luxalgo.com/library/license/