Индикатор Люстра На Форексе

Chandelier Exit

If you&#;d like to follow along with the e-book version of the blog, click on the play button in the audio player below (at the bottom of the page).

Keeping With The Trend

Finding trending indicators is what we’re all about.  We’ve got one this week, which is billed as an exit indicator.  Okay, sure…whatever.  Technically speaking, pretty much any confirmation indicator can be used as an exit indicator.  But are they the best for the job?  That’s the part we (that’s both you and we) aim to find out through testing and observation.  You’ll see further down in the blog that this indicator’s intended purpose doesn’t really work for us because we have other ideas for calculating exits.  Confused?  Don’t be.  We’ll make sense of it all, because…that’s what we do here.

Friends for a Cause

We’re going to take a look at the Chandelier Exit indicator.  Odd name, right?  It turns out that the “Chandelier” in the namesake was actually a reference to that light thing which hangs in one’s house.

BTW &#; Any information communicated by Stonehill Forex Limited is solely for educational purposes. The information contained within the courses and on the website neither constitutes investment advice nor a general recommendation on investments. It is not intended to be and should not be interpreted as investment advice or a general recommendation on investment. Any person who places trades, orders or makes other types of trades and investments etc. is responsible for their own investment decisions and does so at their own risk. It is recommended that any person taking investment decisions consults with an independent financial advisor. Stonehill Forex Limited training courses and blogs are for educational purposes only, not a financial advisory service, and does not give financial advice or make general recommendations on investment.

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Chandelier Exit Summary

The Chandelier Exit is a volatility based exit. It is based on average true range. See ATR indicator.

The author, Chuck LeBeau explains: It lets " profits run in the direction of a trend while still offering some protection against any reversal in trend."

Chandelier exit rule

According to the theory, traders should exit long positions at either the highest high since entry minus 3 ATRs, or at the highest close since entry minus ATRs.

How Chandelier Exit works

The exit stop is placed at a multiple of average true ranges from the highest high or highest close since the entry of the trade. Chandelier Exit will rise instantly whenever new highs are reached. As the highs get higher the stop moves up but it never moves downward.

Another method, called the "YoYo Exit" works in a similar way to Chandelier Exit, except that the ATR stop works with price Close values rather than Highest Highs. Thus, since Close value constantly moves up an down, the YoYo exit also moves up and down.

ChandelierStops_v1_eunic-brussels.eu4

Chandelier Exit formula

The default settings for Chandelier exits are a day period and a multiple of times Average True Range.

Formula in an uptrend:

Formula in a downtrend:

Other ATR based indicators for MT4

ChandelierStops_eunic-brussels.eu4

VoltyChannel_eunic-brussels.eu4

Chande_Kroll_Stop_eunic-brussels.eu4

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Comments

How install MT4/5 indicator in the terminal?

To install an MT4/5 indicator in the terminal, follow these steps:

1. Download the indicator file (.ex4 or .mq4/.ex5 or .mq5) to your computer.

2. Open the MT4/5 terminal and click on &#;File&#; in the top left corner.

3. Select &#;Open Data Folder&#; from the dropdown menu.

4. In the window that opens, double-click on the &#;MQL4/5&#; folder.

5. Double-click on the &#;Indicators&#; folder.

6. Drag and drop the indicator file from your computer into the &#;Indicators&#; folder.

7. Close the data folder window and restart the MT4/5 terminal.

8. The indicator should now be available in the &#;Navigator&#; window on the left-hand side of the terminal. Simply double-click on the indicator to add it to a chart.

Note: If the indicator is in a .zip file, you will need to extract it first before following the above steps.

And if asks to confirm DLL?

If the indicator you are installing requires access to external Dynamic Link Libraries (DLLs), you may see a pop-up message asking you to confirm the use of DLLs.

DLLs are external libraries that contain code that can be used by other programs. In the case of MT4/5 indicators, they are often used to perform complex calculations or connect to external data sources.

If you trust the source of the indicator and want to use it, click &#;Yes&#; to confirm the use of DLLs. If you are not sure or do not trust the source, click &#;No&#; to cancel the installation.

It&#;s worth noting that some indicators may not work properly without access to their required DLLs. If you choose not to allow access to DLLs and the indicator does not work as expected, you may need to reinstall the indicator and confirm the use of DLLs to get it to work properly.

Chandelier Exit is a volatility based indicator created to enable a trader to stay in a trade until there is a definite trend reversal. As explained below, a trader will be able to avoid early exit and realize maximum returns by using the Chandelier Exit indicator.

Principle and components of Chandelier Exit indicator

The indicator was created by Chuck Le Beau who is a globally acknowledged expert in exit strategies. However, the indicator and the trading system associated with it were introduced to traders and investors by Alexander Elder in his book Come Into My Trading Room published in The indicator derives its name from the resemblance to a chandelier, which hangs from the ceiling of a room.

The Chandelier Exit is based on the principle that there exists a high probability of a trend reversal whenever the price of an asset moves against the prevailing trend by a distance equal to three times the average volatility.

The indicator is created using the ATR values over a given time period. Other than the ATR, the highest high and the lowest low price of an asset over a specific time period is used in the calculation. While using the daily time frame for analysis, it is advisable to use an input period of The reason is that the Forex (or equity) market remains open for 22 trading days in a month. To ensure a smoothing effect and filter short-term fluctuations or noise, the day price levels is suggested for the calculation. For other timeframes, the trader should determine the suitable input period based on a trial and error approach. There are no hard and fast rules for this.

The primary objective of Chandelier Exit, as mentioned earlier, is to provide an alert about an impending trend reversal at the right time. Thus, Chandelier Exit value is calculated in a different manner for a long and short position.

In an uptrend, the Chandelier Exit values are calculated using the formula:

Long Exit = Highest High in a time period X – 3 × ATR with a period Y.

The multiplier value 3 is referred to as the Chandelier Exit multiplier and can be altered by the trader.

Most traders use the same time period for the variables X and Y, although nothing forbids a trader from using different values.

When a trader uses the same value, say 9, it means that the highest high for 9 hours (H1 timeframe) and the Average Trading Range for 9 hours are used in the calculation of the Chandelier Exit. The uniform input results in a more dependable output.

In case of a downtrend, the Chandelier Exit values are calculated using the formula,

Short Exit = Lowest Low in a time period X + 3 × ATR with a period Y.

The calculated values (intraday, daily, weekly, or monthly) are plotted as a line in the price chart. From the above formula, it can be inferred that the Chandelier Exit line will be above the price in case of a downtrend. On the other hand, the Chandelier Exit line will be below the price in case of an uptrend.

The Chandelier Exit’s multiplier can be changed after taking the implied volatility of the asset into consideration. If the time period is too small, then it may create whipsaws. On the other hand, longer time periods will delay the exits thereby diluting the purpose of the indicator. A larger multiplier is required while trading a currency pair with a higher implied volatility (the quantum of rise or fall in the price of an asset as expected by the market). In equities, it is not uncommon to see a trader using a smaller multiplier during a downtrend as the rate of price decline is usually faster. It is not the case in foreign exchange market, though, where the currencies are traded one against the other.

Using the indicator in Forex trading

The manner in which a Chandelier Exit can be used to trade in the FX market is given below.

Long position

1. Wait for a candle to close above the Chandelier Exit.
2. When the next candle opens, enter a long position in the currency pair.
3. After taking the volatility of the currency pair into consideration, place the stop-loss order a few pips below the Chandelier Exit.
4. Keep shifting the stop-loss up as the price makes new highs.
5. When the trend reverses, there will be a forced exit from the market.

Short position

1. Wait for a candle to close below the Chandelier Exit.
2. When the next candle opens, take a short position in the currency pair.
3. With due consideration to the volatility of the asset, place a stop-loss order a few pips above the Chandelier Exit.
4. Keep shifting the stop-loss down as the price makes new lows.
5. When the trend reverses, market will remove the stop and close the position.

The USD/JPY example chart below illustrates the trading strategy on H4 timeframe:

Pros

• Enables a trader to squeeze out the last possible pip out of a trade with negligible risk.
• Allows creation of advanced strategies using multiple indicators.

Cons

• Good knowledge and practical experience are required to alter the Chandelier Exit multiplier value.

Chandelier Exit, to a certain extent, can be considered as an extension of the ATR indicator. With good practice, a trader will be able to filter out erroneous signals and trade the currencies with confidence.

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