The Chandelier Exit is a technical evaluation indicator that helps merchants establish potential reversal factors out there. It’s primarily based on the concept markets have a tendency to maneuver in tendencies, and that these tendencies could be recognized by wanting on the highs and lows of the worth motion. The Chandelier Exit indicator is plotted as a line on a value chart, and it strikes up and down with the worth motion. When the worth motion is trending up, the Chandelier Exit indicator will likely be beneath the worth, and when the worth motion is trending down, the Chandelier Exit indicator will likely be above the worth.
The Chandelier Exit indicator can be utilized to establish potential buying and selling alternatives by in search of divergences between the indicator and the worth motion. For instance, if the worth motion is making new highs, however the Chandelier Exit indicator is making decrease highs, this may very well be an indication that the pattern is weakening and {that a} reversal could also be imminent. Conversely, if the worth motion is making new lows, however the Chandelier Exit indicator is making larger lows, this may very well be an indication that the pattern is strengthening and {that a} continuation of the pattern is probably going.
