Chandelier Exit Indicator Explained

Chuck LeBeau's Chandelier Exit hangs the stop 'like a chandelier' from the trend's ceiling: highest high since entry minus a multiple of ATR (classically 3×, over 22 bars). Anchoring to the extreme rather than the close means normal pullbacks don't shake you out.

How It Works

• Long stop = highest high (N bars) − 3 × ATR; shorts mirror from the lowest low.
• The high-anchor keeps the stop wide through routine retracements.
• The exit fires only when price gives back a full volatility multiple from the peak.

How to Trade It

Chandelier is the trend-follower's exit: it deliberately sacrifices some open profit to stay aboard multi-week runs. Combine with a faster profit-take on part of the position if the giveback on reversals feels too generous.

Building It in Setup.Cash

Add Chandelier Exit in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. Compare with Parabolic SAR, which accelerates instead of hanging steady. For the full category overview, see the volatility & statistics library guide.

Volatility indicators qualify trades rather than generate them — backtest your system with and without this filter and compare the drawdowns.