Chandelier Exit Indicator For MT4
Table Of Contents:
- Chandelier Exit Indicator For MT4
- Trading ideas with the Chandelier Exit Indicator For MT4
- Chandelier Exit Indicator For MT4 after regular divergences
- Spotting great setups with support and resistance levels
- Chandelier Exit Indicator For MT4 - Conclusion
The Chandelier Exit Indicator For MT4 is mostly used by the position traders who love to ride the trend by using the trailing stops. The indicators create a price channel that acts as the dynamic support and resistance level. Usually, stops are placed based on simple calculations of the dynamic levels. The tool is highly reliable since it follows the ATR or Average True Range formula.
Partially Automated Trading Besides Your Day Job
Alerts In Real-Time When Divergences Occur
Trading ideas with the Chandelier Exit Indicator For MT4
As mentioned above, the indicator is mostly used for calculating the price level of a trailing stop for an already opened position. But you can use the indicator also to generate entry signals very effectively.
I will now show you two ways how this great little helper can give you high probability entry signals:
1. entry signals after regular divergences
2. entry signals after pullbacks from support/resistance price levels
Chandelier Exit Indicator For MT4 after regular divergences
In my opinion the MACD is the best tool to detect regular divergences which turn the direction of the trend with high probability.
Therefore, we will now put the MACD indicator on the chart along with the Chandelier Exit Indicator For MT4 and we will search for regular divergences.
In the following screenshot we have spotted a bullish regular divergence:
The bullish divergence is labeled on the left side of the chart. While the price is moving in a downward trend and makes lower lows, the MACD indicator starts making a higher low. This is called a bullish regular divergence.
As you probably know, regular divergences tend to reverse the direction of the trend. Now the Chandelier Exit Indicator For MT4 comes into play as a confirmation, that the downward trend has ended and the new upward trend has started.
How does the chandelier indicator does the confirmation that the new upward trend started?
The chandelier indicator starts drawing its values with orange color as soon as the price action reverses the trend to the upside. This change of the color gives you also the buy signal for your long trade.
The great advantage of the chandelier indicator is that it gives you always a good position to place your stop loss order. After you opened the trade, you can simply move your stop loss further upward according to the values of the indicator and try to ride the new upward trend as long as possible. The screenshot above shows you how you can move the stop loss.
You can use the next color change (from orange to purple) to exit your buy trade.
You can apply the same principles to enter a high probability sell trade. In the following screenshot I have spotted a bearish regular divergence which is indicated by the MACD indicator. As soon as price moves in direction of the divergence and the chandelier indicator starts drawing purple values then you can open a sell trade. You can place the stop loss directly at the purple line and move the stop loss according to the subsequent profit move:
The change of the color from purple to orange can be used as an exit signal of your sell trade. If you have little experience with spotting regular divergences, then this indicator can help you a lot!
Spotting great setups with support and resistance levels
As you probably know, support and resistance price levels tend to reverse the direction of the trend. You can use this trading knowledge to your advantage by combining it with the signals of the Chandelier Exit Indicator For MT4.
As shown in the following screenshot you can spot a recent support price level and then wait for the price to revisit this support price level. If the price gets rejected heavily from the support price level then you will see a sharp reversal which looks like a V-formation.
Such V-formations within support zones are a strong indication that the market most probably will make a bigger upward move. You can use this knowledge to your advantage and wait for a buy entry signal which is delivered by the chandelier indicator when it starts drawing orange values.
Now you can open a buy trade and place the stop loss directly at the orange line of the chandelier indicator. You can ride the subsequent trend by moving the stop loss according to the orange line. At any time in the future (hopefully after a big profit move) the price will cross the orange line and the chandelier indicator will start drawing purple values. This is the moment where your buy trade will be over.
Check this indicator if you want to have a tool that can draw you support and resistance price levels from different time frames on your trading charts.
Chandelier Exit Indicator For MT4 - Conclusion
The chandelier indicator is a handy tool which can be used in many ways. You have seen how it can be used as a tool to calculate dynamic stop loss levels which can give you huge winning trades by giving the price room to move during the profit move.
You have also seen how the indicator can be even used to calculate entry signals. You should always apply sound trading knowledge in combination with any indicator that you use for your trading.
