How To Add An Chandelier Indicator In Thinkorswim

The Chandelier Exit is a popular indicator used in trading to set trailing stop-loss levels based on volatility. Adding this indicator to your Thinkorswim platform can help you manage risk and optimize trade exits effectively. Here’s a step-by-step guide to get started.

What Is a Chandelier Indicator?

The Chandelier Exit calculates stop-loss levels by anchoring to the highest high over a specified period and subtracting a multiple of the Average True Range (ATR). This helps traders lock in profits and limit losses dynamically as the price moves.

Step-by-Step Guide to Adding the Chandelier Indicator

1. Open Thinkorswim:
   
   • Launch the Thinkorswim platform and log in to your account.
2. Go to the Charts Tab:
   
   • Navigate to the Charts section from the top menu.
   • Load the stock, ETF, or futures chart where you want to apply the indicator.
3. Access the Studies Menu:
   
   • Click on the Studies button in the upper-right corner of the chart.
   • Select Edit Studies from the dropdown menu.
4. Search for Chandelier Exit:
   
   • In the Studies window, type “Chandelier Exit” into the search bar.
   • If the indicator isn’t available by default, you may need to create a custom script (explained below).
5. Add the Indicator:
   
   • Highlight the Chandelier Exit from the list and click Add Selected.
   • Adjust the settings, such as the ATR multiple and period, to suit your trading style.
   • Click OK to apply the indicator to your chart.
6. Customize the Appearance:
   
   • Right-click on the indicator line to change its color, thickness, or style.
   • Ensure the visual settings are clear and easy to interpret during trading.

Also Read: How Much To Make 109K After Taxes

How to Create a Custom Chandelier Indicator (If Not Preloaded)

1. Access ThinkScript Editor:
   
   • From the Studies menu, click Create to open the ThinkScript editor.
2. Input the Script:
   

Use the following ThinkScript code as an example:
input length = 22;

input atrMultiplier = 3.0;

def atr = Average(TrueRange(high, close, low), length);

def highestHigh = Highest(high, length);

plot chandelierExit = highestHigh – (atrMultiplier * atr);

chandelierExit.SetDefaultColor(Color.CYAN);

3. Save and Apply:
   
   • Name your script (e.g., “Custom Chandelier Exit”) and save it.
   • Add it to your chart from the Studies menu.

Benefits of the Chandelier Indicator

• Dynamic Stops: Adjusts with market volatility.
• Risk Management: Helps protect gains and limit losses.
• Customizable: Tailor settings to align with your trading strategy.

Adding the Chandelier Exit indicator to Thinkorswim is straightforward and can greatly enhance your trading approach. Experiment with different settings to find the best fit for your trading style and market conditions.