Chandelier Exit
A trailing stop placed a multiple of average true range below the highest high since entry.
Formula
Long Exit = Highest High over n periods - Multiplier x ATR; Short Exit = Lowest Low over n periods + Multiplier x ATR
Unit
₹
In depth
The chandelier exit hangs from the highest point reached, which is what distinguishes it from stops anchored to the entry price — it ratchets up as new highs are made and never moves down. Scaling by ATR means the distance adapts to volatility, so the stop loosens in turbulent conditions rather than firing on ordinary noise. The typical setting is 22 periods with a multiplier of 3, giving a wide stop suited to position trading. It is an exit rule, and nothing about it forecasts where price will go.
Worked example
Highest high since entry ₹536 with ATR of ₹14 at a multiplier of 3 gives an exit at 536 - 42 = ₹494. A new high of ₹560 with unchanged ATR moves the exit to ₹518; a fall never moves it down.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Chandelier Exit” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.