← Glossary

Chandelier stop

The chandelier stop trails below the highest high reached over a rolling window rather than the current price, so it only ever tightens as new highs form — it never widens on its own. That's what makes it a trailing stop rather than a static one: it locks in more of a favorable move as price extends, while still giving room proportional to the instrument's ATR.

Chandelier(long) = max(High, n) − (K × ATR(n))

This explains what chandelier stop measures. It isn't investment advice — see the disclaimer.