ProShares UltraPro QQQ ETF (TQQQ)

[TREND1]

CHANDLR 5,2 IMPORTANT POINTS

Introduction


Developed by Charles Le Beau and featured in Alexander Elder's books, the Chandelier Exit sets a trailing stop-loss based on the Average True Range (ATR).

The indicator is designed to keep traders in a trend and prevent an early exit as long as the trend extends.

Typically, the Chandelier Exit will be above prices during a downtrend and below prices during an uptrend.

Conclusions


The Chandelier Exit is mostly used to set a trailing stop-loss during a trend.

Trends sometimes extend further than we anticipate and the Chandelier Exit can help traders ride the trend a little longer.



Even though it is mostly used for stop-losses, the Chandelier Exit can also be used as a trend tool.

A break above the Chandelier Exit (long) signals strength, while a break below the Chandelier Exit (short) signals weakness. Once a new trend begins, chartists can then use the corresponding Chandelier Exit to help define this trend.



http://stockcharts.com/school/doku.php?st=chandlr&id=chart_school:technical_indicators:chandelier_exit