Chandelier Stop Long/Short Anchored

Description:

In the realm of risk management and trading strategies, the chandelier exit has been a popular tool for determining optimal stop-loss levels. Developed by renowned trader Chuck LeBeau, the chandelier exit helps traders identify potential exit points by dynamically adjusting stop-loss orders based on market volatility.

Input Parameters:

Anchor to: Select the criteria of anchoring the indicator. For example, you can anchor the indicator to time by selecting Year to Date. You can also anchor the indicator to Recent Gap or Highest volume or to Start of the month among many other options available.
Window: The amount of candles a candle must dominate over in order to count as an appropriate anchor point". So in case, you do Window=5, then you'll be essentially anchoring to Williams Fractal points. If you do Window = 20, then candle A will be recognized as the anchor point only in case no candle from 10 candles to the left and 10 candles to the right from A dominates over A.*
ATR Factor: A multiplier applied to the Average True Range (ATR) indicator, adjusting the sensitivity of trading strategies or indicators to market volatility by determining the distance of exit or stop-loss levels from the current price.
ATR Length: Number of periods used in the calculation for Average True Range (ATR).
Band Type: You can plot bands (a bundle of multiple levels) around this indicator and define the levels accordingly. There are three types of bands available to use i.e. - Percentage, Std. deviation (also known as volatility bands), and VbP Ribbon (gets thicker around the areas where more volume has been traded).

Use Cases:

Trend Following: This indicator helps traders stay in a position as long as the trend remains intact by providing a dynamic trailing stop-loss level that adjusts based on market volatility. Traders can use it to ride trends while minimizing the risk of being stopped out by short-term market fluctuations.
Risk Management: Setting appropriate stop-loss levels is crucial for managing risk in trading. The Chandelier Stop Long/Short Anchored provides a reliable method for adjusting stop-loss levels according to market volatility, helping traders protect their capital and limit losses in adverse market conditions.
Exit Strategy: The indicator serves as an effective exit strategy by signaling potential trend reversals or weakening momentum when the price breaches the Chandelier Stop level. This prompts traders to close their positions to lock in profits or limit losses, ensuring disciplined trading and preserving capital.

This feature can be used in: