Chandelier Exit Indicator: ATR-Based Trailing Stop Formula
Developed by Chuck LeBeau, the Chandelier Exit hangs a trailing stop from the highest high (for Longs) or lowest low (for Shorts) using a multiple of Average True Range: Chandelier Long = Highest High (22 periods) - (3 x ATR(22)). If the 22-period high is 1.0850 and ATR is 0.0020 (20 pips), your dynamic trailing stop sits at 1.0790.
Static pip stops fail because market volatility expands and contracts continuously. The Chandelier Exit adapts dynamically to prevailing market conditions, giving trades breathing room during high volatility while tightening protection during quiet trends.
INTERACTIVE POSITION SIZING & RISK SIMULATOR
2026 BENCHMARK & COMPARISON DATA MATRIX
| Market Condition | ATR Multiplier (x) | ATR Value (Pips) | Trailing Stop Distance | Trade Holding Profile |
|---|---|---|---|---|
| Tight Scalping | 1.5x ATR | 15 Pips | 22.5 Pips Trailing | Quick trend capture; rapid breakeven |
| Standard Intraday | 2.5x ATR | 20 Pips | 50.0 Pips Trailing | Standard session swing; filters noise |
| Institutional Swing | 3.0x ATR | 35 Pips | 105.0 Pips Trailing | Long-term trend following; ignores intraday wicks |
| High-Beta Crypto | 4.0x ATR | 80 Pips | 320.0 Pips Trailing | Resilient against liquidation wicks |
Why 3x ATR is the Quantitative Standard
In normally distributed random walks, 99.7% of price fluctuations fall within 3 standard deviations. Setting Chandelier Exits at 3.0x ATR guarantees that price will only trigger your stop if an authentic structural regime shift occurs.
Size Dynamic ATR Stop Loss Orders
Engineered for zero-math error execution. Tested across MT4/MT5 and Binance futures.
FREQUENTLY ASKED QUESTIONS & EXPERT CLARIFICATIONS
Can the Chandelier Exit ever move against the trade?
No! The Chandelier Exit functions strictly as a ratchet: it only ratchets closer in the direction of profit and never moves backwards.
Author: TradeCoreHub Quantitative Risk & Algorithmic Desk. Peer-reviewed against CME tick specifications, FTMO/FundedNext drawdown contracts, and Binance USD-M liquidation mechanics.
Audit Standard: Zero-Math-Error validation. Formulas are calibrated to ensure absolute capital survivability across statistical losing streaks.
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