Hello Fellow ChartWatchers!
I'm very happy to announce that we've just added a new overlay to our system - the Chandelier Exit. This overlay is a favorite of our good friend Dr. Alexander Elder. He discusses it extensively in his books. It is a trailing stop overlay meaning that it tries to determine a good price level for exiting an existing position. In that regard, it is similar to Welles Wilder's Parabolic SAR overlay. Here's what it looks like in action:
Notice that the red line on this chart could have been used effectively as a trailing stop-loss during the uptrend.
For more details on Chandelier Exits including how they are calculated and used, please see our new ChartSchool article on them.