Chandelier exit flip
The Chandelier Exit hangs a trailing stop from the recent high, like a chandelier from a ceiling, three ATRs below the highest close of the last 22 bars, with a mirror line above the recent low. This strategy uses the two lines as a stop-and-reverse system on 15-minute NIFTY futures bars: it is always either long or short, flips when price closes through the active line, and holds positions across days.How it trades
Results
PRE-BUILT · DEFAULTSWhere it made and lost money
As an always-in trend follower it needs movement. Trades held while NIFTY fell more than 1% made ₹5,33,848 over 32 trades and those held through a rise of more than 1% made ₹2,68,997 over 23, because the 3-ATR line trails far enough back to stay with a real trend. When NIFTY moved less than 1%, 90 trades lost ₹1,66,325 as price crossed the line back and forth. By entry day, trend days made ₹3,03,003 over 53 trades and choppy days lost ₹1,77,062 over 86. After a VIX close above 14.5 it made ₹2,68,775 over 59 trades; after VIX below 11.5 it lost ₹67,964 over 73.
About this strategy
- Build 15-minute bars of the near-month NIFTY future, continuous across sessions.
- Long line: the highest close of the last 22 bars minus 3 times the 22-bar ATR. Short line: the lowest close plus 3 ATRs. Each line only moves in the trade's favour.
- A bar closing above the short line turns the trend up; a close below the long line turns it down.
- Flip the position at the first tick after the signal bar: close the old side and open one lot the other way.
- Hold overnight with no other stop or target; the opposite line is the trailing stop.
- On futures expiry day, close at 15:15 and reopen the same side in the next month; the lines restart for the new contract.
Why traders use it
Tying the stop to volatility means it sits further away in wild markets and closer in calm ones, so normal noise is less likely to knock the trade out. Hanging it from the highest close lets a winning trade run while locking in more as the trend extends. Being always in the market means no big move is missed. The method is simple, objective and widely available on charting platforms, which keeps it popular with trend followers.
The year in plain words
On NIFTY from 1 Oct 2025 to 30 Sep 2026 the strategy logged 236 trades, about 20 a month with a median hold of 22 hours. Only 33% won, but the average win (₹15,438) was more than twice the average loss (₹6,458). Net P&L was ₹1,61,945 before costs and ₹1,04,829 after ₹20 per order and slippage. February to April made over ₹3.4 lakh as strong trends ran, while July and August lost over ₹1 lakh together. The ₹1,62,129 drawdown and a 13-trade losing streak show how rough the ride was.
What the settings do
Risks
- Long losing streaks are normal: 13 in a row in this period, with a drawdown above ₹1.6 lakh.
- Positions are held overnight with no stop other than the trailing line, so gaps go straight through it.
- Profit depends on a few strong trend months; a year without them could lose heavily.
- Frequent flips make costs significant, cutting about a third of the before-costs profit here.
Who it suits
Patient trend followers with margin for a NIFTY futures lot held overnight, who can sit through long losing streaks and large drawdowns while waiting for big moves.
Questions traders ask
What is the Chandelier Exit indicator?
It is a trailing stop placed a multiple of ATR below the highest price (or close) of recent bars for longs, and above the lowest for shorts. Because it uses ATR, the distance widens in volatile markets and narrows in quiet ones. Many traders use it as an exit; this strategy also uses it to reverse.
Is the Chandelier Exit strategy profitable on NIFTY?
In this backtest from 1 Oct 2025 to 30 Sep 2026 it made ₹1,61,945 before costs and ₹1,04,829 after ₹20 per order and bid-ask slippage, with a ₹1,62,129 drawdown before costs. Most of it came from February to April. Past results do not guarantee future ones.
What are the usual Chandelier Exit settings?
The classic settings are a 22-bar lookback and a multiplier of 3 ATR, which this strategy uses on 15-minute bars. Shorter lookbacks or smaller multipliers flip more often.
Why does a 33% win rate still make money?
Because winners ran much further than losers. The trailing line cuts losing trades fairly quickly but stays with winning trends, so the average win was more than twice the average loss.