Chandelier exit is a volatility-based exit. This is based on the average true range. The author, Chuck LeBue, points out: it profit moves in the direction of a trend, while still offers some protection against any reversal in the trend.”
How to trade
According to the principle, a trader should either exit at the highest point since entry minus 3 ATR, or have the nearest pass since entry minus 2.5 ATR.
Exit stop has been placed at the highest or the highest close to the average true categories since the entry of the trade. Whenever you reach new heights, the chandeliers will come out. As the high places rise, the stop-go up but it never moves.
Another method works similarly to Chandelier exit, except that ATR stop works with close value instead of the highest highest. Thus, since the close value moves downwards continuously, the exit also moves up and down.