ChandeKrollStopUpReturn value of the technical indicator “Chande Kroll Stop” upper band, usually used for placing stoploss on short positions.
Syntax:
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ChandeKrollStopUp[Pp,Qq,X] |
This indicator is a potential stop for a short position. It is displayed as a red line overlaid on the price chart. The red line is the stop level for a short position.
Calculation :
First high stop = Highest[p](high) – x * Average True Range[p]
Stop short = Highest[q](First high stop)
The parameters which the user can set include : the number of periods for the calculation of the average true range (default : 20), the multiplier in the formula (default : 3).
Interpretation :
This indicator is a potential stop for any position (short or long). It is calibrated on the true range and for this reason, it is independent from the security’s volatility. Remember, true range is the highest in the absolute of the 3 following values :
(today’s high – today’s low)
(today’s high – yesterday’s close)
(today’s low – yesterday’s close)
The difference is proportionnal to the average true range of P bars.
It is possible to place a buy upon breakout of the upper band and a stop sell upon breakout of the lower band.
Example:
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i1 = ChandeKrollStopUp[10,20,3] //initiate a long position when price cross the ChandeKrollStop upper band if(Open<i1 AND Close>i1) THEN BUY 1 share AT MARKET ENDIF |
Is this an error?
“The red line is the stop level for a long position.”
Should it say Short position or have i misunderstood context?
Thank you
You are right, there is something not good there 🙂 I’ll change it with the right description. Thanks for pointing it.
It is possible to have the formula to be entered in the proBuider? Thanks