Chandelier Stop

A Chandelier Stop is a dynamic stop-loss level that moves up as a stock's price rises, helping you lock in gains while protecting against sudden reversals. It's calculated by taking the highest price over the last 22 days, then subtracting a multiple of the stock's volatility (usually 3 times the Average True Range, which measures how much a stock typically swings daily). You'll see traders use it to automatically exit positions if the stock drops below this trailing level. For example, if TechCorp hits new highs but then drops sharply, your Chandelier Stop would trigger a sale before losses pile up. It's popular because it adapts to market conditions—volatile stocks get wider stops, calm ones get tighter ones.