Forex signal indicator Chandelierstops
In this article, I suggest you get acquainted with another technical analysis tool. This is the forex signal indicator Chandelierstops. It allows a trader to open a trade order at the beginning of an emerging trend. This means that the probability of closing it with a good profit is very high. It is possible to use the indicator in trading any currency pairs. The statistics shows that Chandelierstops is the most effective on higher timeframes. Its algorithm is based on the popular ATR indicator. Signals are formed after processing the historical data on the average price volatility of the traded instrument.
Forex signals indicatorChandelierstops is designed for trend trading. During the price consolidation period, the percentage of false signals sharply increases. To avoid unnecessary losses, it is better not to use its signals at this time.
Chandelierstops indicator parameters
In order to get a profitable trading strategy on the basis of this instrument, you need to optimize its parameters. There are only three of them.
Parameter ATRperiod allows you to set the period to be used in calculations. By default it is 14.
Parameter Length determines the degree of indicator’s response to market volatility. The higher its value, the more signals there will be at their lower quality. And vice versa.
And finally, the last parameter is KV. Its value is 4. The indicator is sensitive to changes in this parameter, which allows you to choose the best value for its quality signals.
How to trade on Chandelierstops signals
This indicator draws on the chart two colors: red and blue. Depending on the color and price location relative to the line, a trading signal is formed.
Let’s take a look at the signals on the price chart as an example:
The color of the indicator line changed from blue to red and the price is under the line. That means you can open a sell order. Then the color changed from red to blue and the price is above the indicator line. So it’s time to open a buy.
After entering the market, the indicator line can be used to determine the level of stop-loss setting. And then move it behind the line.
Although Chandelierstops, when used correctly, shows very good results, I would not recommend blindly trusting its signals. To reduce the risks, it is necessary to choose a filter for it. The system requires thorough testing on a demo account.
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