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Plotting stops on Advanced Charts is a feature available to BollingerOnBollingerBands subscribers. BBStops ™, Chandelier Stops and Parabolic Stops and Systems can be plotted for long and short positions, as single trades or as continuous systems, and a detailed trade report is provided. In addition, Ice Breaker signals can be plotted on the chart accompanied with a detailed trade report. Like all our chart features, your stop parameters are saved and will be reloaded using the same settings the next time you log in. As data is updated your stops are updated automatically, and an updated trade report is generated.

Chandelier Stops
  • Chandelier Stops: Chandelier stops were popularized by Chuck LeBeau. They are dynamic, progressive stops that can be calculated starting with the period after you enter a trade. The formulas are simple and robust. For sell stops when you are long the stop is the highest high since you entered the trade less n times the m-day Average True Range (ATR). For buy stops when you are short the stop is the lowest low since you entered the trade plus n times the m-day ATR. The usual defaults are n = 3 and m = 10, so that means a "normal" Chandelier sell stop is the highest high since entry less three times the 10-period ATR.

    True Range (TR) is a measure of range that incorporates any gaps that may occur in the price structure between periods. For the TR high, the value is this period's high or last period's close, whichever is higher. For the low the value is this period's low or last period's close, whichever is lower. TR is the TR high minus the TR low. ATR is an n-period average of TR.

    Chandelier stops can be computed each period an open position is held as ATR will change even if a new high (when long) or low (when short) since entry isn't recorded. One question that often comes up is whether to allow the stop to back off? For example, if this period's stop for a short position is 33.35 and next period's is 33.5 due to an expansion in ATR, should we stick with the more conservative stop of 33.35 or allow it to back off a bit to 33.5? Chuck LeBeau's answer is that backing off is a feature of Chandelier stops that should be allowed and that is good enough for us.

    Chandelier Stop Options Menu
    As shown above, to plot a Chandelier Stop, you need to specify the entry date formatted as follows (YYYY-MM-DD), the position type (Long or Short), the m and n parameter. You can enter a decimal for the n parameter. You have the option to display one stop or continuous reverse positions which opens a new trade at the end of each trend. Do this by checking the 'always in' checkbox. If unchecked, only one trade is shown. Make sure the Chandelier Stops checkbox is checked.
    Please note that if your entry date is for a date prior to the data currently showing the stop function will not calculate.

    Chandelier Stop Trade Report
    After plotting the stop line, a detailed trade report is displayed in the same options menu. This is illustrated above. You can pop out the report for an unobstructed larger font view by clicking the 'pop up' button.

    Chandelier Stop Chart
    After you plot the chart, the Chandelier Stops will be plotted starting from the entry position to the exit position if the conditions are met, otherwise the trade will remain open. For always in options, the stop will reverse when it is closed and a new trade is initialized. The lines and signals for each trade are also drawn.
    For a long trade: A green arrow is drawn at the entry and a red arrow is drawn at the exit if the position is closed.
    For a short trade: A red arrow is drawn at the entry and a green arrow is drawn at the exit if the position is closed.


Parabolic Stop And Reverse (SAR)
  • Parabolic Stops And Reverse (SAR): This is a price and time trading system introduced by Welles Wilder in his 1978 book "New Concepts in Technical Trading Systems". The SAR (stop and reverse) indicator trails the price as the trend extends over time. In an uptrend, the indicator rises below the price line and in a downtrend the indicator falls above the price line. When the price trend breaks below or above the indicator line, the indicators stops and reverses.

    The algorithm used for calculating the SAR:

    In an uptrend:(Long Trade)
    Current SAR = Prior SAR + Prior AF(Prior EP - Prior SAR)
    Where EP (Extreme Point) is the highest high in the current trend
    AF (Acceleration Factor) which starts at 0.02 and increases by 0.02 each time a new high is made in current trend. Stops increasing at a certain limit (0.2)
    In an uptrend, never move tomorrow's calculated SAR above yesterdays or today's low. If the calculated SAR is higher than either of these values then use the lower low of the two as the SAR and use this value for SAR calculation for the next day.
    If tomorrow's SAR is greater than tomorrow's low, then close the position and reverse the trade.

    In an downtrend:(Short Trade)
    Current SAR = Prior SAR - Prior AF(Prior SAR - Prior EP)
    Where EP (Extreme Point) is the lowest low in the current trend
    AF (Acceleration Factor) which starts at 0.02 and increases by 0.02 each time a new low is made in current trend. Stops increasing at a certain limit (0.2)
    In a downtrend, never move tomorrow's calculated below the high of yesterday or today. If the calculated SAR is lower than either of these values then use the higher high of the two as the SAR and use this value for SAR calculation for the next day.
    If tomorrow's SAR is less than tomorrow's high, then close the position and reverse the trade.

    Parabolic Stop Options Menu
    As shown above, to plot the Parabolic Stop and Reverse system, specify the entry date as follows (YYYY-MM-DD), the position type (Long or Short), the AF step (0.02) and the maximum AF (0.2) parameter. Make sure the Parabolic Stops checkbox is checked.
    Please note that if your entry date is for a date prior to the data currently showing the stop function will not calculate.

    Parabolic Stop Trade Report
    After plotting the stop line, a detailed trade report is displayed in the same options menu. This is illustrated above. You can pop out the report for an unobstructed larger font view by clicking the 'pop up' button.

    Parabolic Stop Chart
    After you plot the chart, the Parabolic Stops will be plotted starting from the entry position to the exit position if the conditions are met, otherwise the trade will remain open. The stop will reverse when it is closed and a new trade is initialized. The lines and signals for each trade are also drawn.
    For a long trade: A green arrow is drawn at the entry and a red arrow is drawn at the exit if the position is closed.
    For a short trade: A red arrow is drawn at the entry and a green arrow is drawn at the exit if the position is closed.


BBStops ™
  • BBStops: BBStops are an adaptation of the stops included in Welles Wilder's Parabolic Price Time System. These stops increment both with the passage of time and the progress of the trade. They start at an interval above/below the entry day as a function of Bollinger Envelopes and then progress automatically as time passes and as price changes. If the entry is a buy, BBStops start beneath entry at an interval determined by the lower Bollinger Envelope calculation. For a sell the interval is a value above the entry determined by the upper Bollinger Envelope calculation. You chose the Bollinger Envelope multiplier. The default is 1.5.

    BBStop Options Menu
    As shown above, to plot a BBStop, specify the entry date as follows (YYYY-MM-DD), the position type (Long or Short), the AF step (0.02), the maximum AF (0.2) parameter and the Bollinger Envelope multiplier (default is 1.5). Make sure the BBStops checkbox is checked.
    Please note that if your entry date is for a date prior to the data currently showing the stop function will not calculate. BBStop Trade Report
    After plotting the stop line, a detailed trade report is displayed in the same options menu. This is illustrated above. You can pop out the report for an unobstructed larger font view by clicking the 'pop up' button.

    BBStop Chart
    After you plot the chart, the BBStop trade will be plotted starting from the entry position to the exit position if the conditions are met, otherwise the trade will remain open. Only one single trade is plotted. The lines and signals for that trade are also drawn.
    For a long trade: A green arrow is drawn at the entry and a red arrow is drawn at the exit if the position is closed.
    For a short trade: A red arrow is drawn at the entry and a green arrow is drawn at the exit if the position is closed.


Ice Breaker Signals
  • Ice Breaker Signals:
    John Bollinger developed the Ice Breaker trading system in 2002 and it continues to be profitable despite all the changes in the markets. Ice Breaker uses Bollinger Envelopes (BE) to generate its signals. Like Bollinger Bands, BEs are driven by market volatility, but instead of using a simple moving average of the closing prices, they use moving averages of the highs and lows. Likewise, instead of using the volatility of the close, Bollinger Envelopes use the volatilities of the highs and the lows.

    Ice Breaker was designed to trade the NASDAQ 100 ETF, the QQQ, which was known on the floor as "the cubes", hence the name. Ice Breaker has been through a lot of changes since then. First we expanded it to trade two other Index ETFs, the Dow Jones Industrial Average ETF, DIA, and the S&P 500 Index ETF, SPY. Then we added a rigorous exit system.

    Ice Breaker has remained profitable over the years and is now available complete with Chandelier stops on www.EquityTrader.com Pro and www.BollingerOnBollingerBands.com for any of the 5,000 securities in the EquityTrader universe as well as www.BBForex.com Pro for all available currency pairs.
    Click on the indicator tab, Ice Breaker is the last category on the list. Ice Breaker Options Menu
    The issue traded will be the issue on the chart with the signals coming from the symbol in the "Signals Symbol" box. Make sure the "Ice Breaker Trading" checkbox is checked.

    Ice Breaker Trade Report
    When you click the plot icon on the lower right of the indicator box, an Ice Breaker report will appear as shown above and the entry and exit signals will appear on the chart in the form of arrows, green up arrows for buys (entries) and red down arrows for sells (exits) as shown below.

    Ice Breaker Chart