Chandelier Stops Forex Trading Strategy


Traders earn from the markets because they have an edge. That is all there is to it. Traders who have an edge could earn huge sums of money. Traders who do not have an edge could lose a whole lot of money. But what is it really? What is an edge?

Different traders define an edge in different ways. Some say an edge comes from indicators. Others say it comes from the psychology of a trader. Others say it is money management. Still, others say their edge comes from hedging. Some traders say it is a price action. Wherever that edge comes from, if it allows traders to profit over the long run, then it is an edge.

In my opinion, a trading edge is something that allows a trader to have a statistical advantage based on probabilities if he is doing the same thing multiple times. This means that if a trader is using the same trading pattern and he is either winning more often or winning bigger, then he could have an edge.

Some traders gain an edge because they have an extremely high win rate. Some would claim even up to 80% win rate. Yet this may also come at the cost of a lower reward-risk ratio. Others gain an edge by having high reward-risk ratios. Despite a lower win rate, they could still be profitable in the long run.

Chandelier Stops Forex Trading Strategy is a strategy that is geared towards capturing trending markets right from the get go and exiting the trade before the trend reverses. This gives us a strategy that gains an edge because of a good reward-risk ratio.

Chandelier Stops v1

Chandelier Stops v1 is a technical indicator which was developed to help traders identify trend direction based on the Average True Range (ATR) of a currency pair.

One of the most popular ways to identify trend direction is by looking at how price moves in relation to the ATR. Some traders would say that if price reverses by more than twice the ATR, then the trend has already reversed.

This is the same concept behind the Chandelier Stops v1. It first identifies the trend direction. It then plots a line on the opposite side of the trend based on a multiple of the ATR. If price closes on the opposite side of the line, then price would be considered to have reversed.

The indicator also changes the color of the line to clearly indicate the direction of the trend. A blue line indicates a bullish trend, while a red line indicates a bearish trend.

There are also other variables that could be tweaked such as the multiple used, the number of periods used on the ATR, and the shifting of the line.

The Chandelier Stops v1 indicator can be used as a trend reversal signal based on the shifting of the lines and the changing of its color.

It could also be used as a stop loss placement tool. Traders can place the stop loss behind the line and trail it as the trade progresses.

BT Trend Trigger

BT Trend Trigger is a custom indicator which is intended to help traders identify and confirm a trend reversal.

It is an oscillator type of indicator which plots a line that oscillates around zero. A positive line could also indicate a bullish bias, while a negative line could also indicate a bearish bias.

On top of this, the indicator also plots a horizontal line that shifts to either -50 or 50. If the indicator detects a bullish bias, the line shifts to positive 50, while if the indicator detects a bearish bias, the indicator shifts to – 50. To confirm a trend, the BT Trend Trigger line should cross above 50 on a bullish trend, or below -50 on a bearish trend.

Trading Strategy

This trading strategy is a simple trend reversal strategy which is based on the confluence of the trend reversal coming signals from the Chandelier Stops v1 and the BT Trend Trigger indicators.

On the Chandelier Stops v1 indicator, the signal will simply be based on the shifting of the line and the changing of its color.

The BT Trend Trigger signal on the other hand will be based on the BT Trend Trigger line crossing over either -50 or 50, depending on the direction of the trend.

Indicators:

  • ChandelierStops_v1
  • BTTrend Trigger

Preferred Time Frames: 30-minute, 1-hour and 4-hour charts

Currency Pairs: FX majors, minors and crosses

Trading Sessions: Tokyo, London and New York sessions

Buy Trade Setup

Entry

  • The Chandelier Stops v1 line should shift below price action and should change to blue.
  • The BT Trend Tiger red line should shift to 50.
  • The main BT Trend Trigger line should cross above 50.
  • Enter a buy order upon confirmation of these conditions.

Stop Loss

  • Set the stop loss below the Chandelier Stops v1 line.

Exit

  • Close the trade as soon as the main BT Trend Trigger line crosses below the red line.
  • Close the trade as soon as the Chandelier Stops v1 line shifts above price and changes to red.

Chandelier Stops Forex Trading Strategy

Chandelier Stops Forex Trading Strategy 2

Sell ​​Trade Setup

Entry

  • The Chandelier Stops v1 line should shift above price action and should change to red.
  • The BT Trend Tiger red line should shift to -50.
  • The main BT Trend Trigger line should cross below -50.
  • Enter a sell order upon confirmation of these conditions.

Stop Loss

  • Set the stop loss above the Chandelier Stops v1 line.

Exit

  • Close the trade as soon as the main BT Trend Trigger line crosses above the red line.
  • Close the trade as soon as the Chandelier Stops v1 line shifts below price and changes to blue.

Chandelier Stops Forex Trading Strategy 3

Chandelier Stops Forex Trading Strategy 4

Conclusion

This trading strategy is not a high probability type of trading strategy. It does not have a high win rate like other trading strategies have. This is common among trend reversal strategies.

However, because this strategy is a trend reversal strategy that aims to take trades at the start of a trend and exit prior to the end of the trend, it could potentially earn huge profits in a single trade. This open-ended exit allows the strategy to have a high reward-risk ratio.

Traders who would prefer a higher probability trade setup using this type of strategy could use it as an entry signal coming from reversal zones. Traders could also incorporate price action to support the trade setup.


Forex Trading Strategies Installation Instructions

Chandelier Stops Forex Trading Strategy is a combination of Metatrader 4 (MT4) indicator(s) and template.

The essence of this forex strategy is to transform the accumulated history data and trading signals.

Chandelier Stops Forex Trading Strategy provides an opportunity to detect various peculiarities and patterns in price dynamics which are invisible to the naked eye.

Based on this information, traders can assume further price movement and adjust this strategy accordingly.

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How to install Chandelier Stops Forex Trading Strategy?

  • Download Chandelier Stops Forex Trading Strategy.zip
  • *Copy mq4 and ex4 files to your Metatrader Directory / experts / indicators /
  • Copy tpl file (Template) to your Metatrader Directory / templates /
  • Start or restart your Metatrader Client
  • Select Chart and Timeframe where you want to test your forex strategy
  • Right click on your trading chart and hover on “Template”
  • Move right to select Chandelier Stops Forex Trading Strategy
  • You will see Chandelier Stops Forex Trading Strategy is available on your Chart

*Note: Not all forex strategies come with mq4/ex4 files. Some templates are already integrated with the MT4 Indicators from the MetaTrader Platform.

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