Technical analysis

Сhandelierstops

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Chandelierstops is an interesting indicator!

 

Welcome, dear readers! Today we look at a rather interesting technical analysis indicator called Chandelierstops. On assurances of the author, this indicator will provide You with regular trading signals, the accuracy of which will be on a very decent level. If this is true or not? – consider later in the article!

Chandelierstops is an interesting indicator for trading

This indicator was created by Chuck LeBeau who is quite well-known figure in narrow circles. According to the Chuck Chandelierstops is a revolutionary technical analysis tool which always points to the formation of a trend with almost absolute guarantee. Looking ahead, we note that the words of the author are greatly exaggerated.

The essence lies in the fact that any indicator is only a Supplement, and it is necessary to pay attention to many other aspects, for example, are important to consider levels of support and resistance.

Besides the huge role you need to take and to choose a broker, it is desirable that he was able to provide You with a low rate of spread.

After analyzing the code of the indicator Chandelierstops, it becomes clear that he bases his testimony on ATR, that is, taken into account the average volatility of the currency pair. With its light and generates a particular signal that a trend is forming in the market. If you delve into the calculations, the formula this tool will appear as: the largest maximum (taken into account 22 days) – 3 X ATR (22 days) is it about upward trend.

For the calculation of the downtrend made the opposite calculations. If you look in General, Chandelierstops will be a great addition to any system. However, it is worth considering the specifics of this tool.

Let’s start with the fact that most of it works well in periods of pronounced trend. It is in these moments that a trader can get good profit with relatively low risks.

It is not recommended to use it during the formation of consolidation. In this case, Chandelierstops will constantly change their testimony, thereby forming a multitude of unprofitable signals. Another point to consider – the indicator is not recommended for use at low ranges because of the noise of the market.

By actually observing Chandelierstops some time, we came to the conclusion that the most stable readings it gives in the four-hour interval. Optionally, you also use hour timeframe, but the number of false alarms in this case will increase.

The indicator settings

The indicator has a few basic variables, the settings of which will help You to optimize Chandelierstops to create all this desired break-even strategy. Let’s learn settings:

  • Length. By default, this parameter is set to 15, its increase will lead to the fact that the indicator will be less sensitive to the volatility of the market, respectively, the total number of signals will be reduced. If you decrease this parameter, Chandelierstops will become much more sensitive to the market.
  • ATR. Initially, this variable is equal to 14, and it is the most appropriate option. In principle, You can experiment and change it.
  • KV. By default, this variable is 4, and it significantly affects the sensitivity of the indicator.
  • Length. This variable is responsible for the displacement of the indicator relative to price. For example, if the parameters You ask 1,2,3,4 and so on, the indicator will shift to the right. If set to negative values, like -1,-2,-3,-4 in this case, the line indicator will gradually shift to the left.

We can only recommend that You leave all the default variables, as in such circumstances, the indicator preserves the balance between the number of signals and their nominal quality.

Trading signals

The indicator generates two potential signal, and through which opening one or another position. Let’s look at the sales!

Opening sale

The example above shows that the indicator was rebuilt higher prices and changed the color to red. At this moment you can open a trading position for sale, which turned out to be profitable.

If we talk about shopping, it is necessary to wait for formation of the reverse signal:

Open purchase

In this case we can see clearly that the indicator was painted blue and rebuilt lower prices. Just when the formation of these conditions it was necessary to open a buy position.

In General, this indicator significantly lags behind the price. By and large, this is nothing abnormal, given the fact that it is a trend. This point should definitely be considered when opening one or another position.

Final conclusions

Speaking in the General context, Chandelierstops is a very interesting indicator, which has its distinctive features. When used correctly it will help to capture a truly global market movement, which will give the opportunity to earn large profit.

When using this indicator you must understand that it is not a kind of Grail – it’s just a tool. Always follow money management rules and always try to optimize his system to the realities of the market. Good luck!

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