Chande Kroll Stop Indicator MT4 | MT5

The Chande Kroll Stop, developed by Tiushar Chande and Stanley Kroll, is a trend-following indicator that sets flexible stop levels based on market volatility. It uses the ATR to calculate two lines:

• Stop Long Line (Blue): Plotted below price, based on the lowest low over a period, plus a multiple of ATR.
• Stop Short Line (Red): Plotted above price, based on the highest high over a period, minus a multiple of ATR.

Furthermore, this indicator is often used in trending markets with high volatility. It helps traders identify trend direction, determine exit points, and avoid premature stop-outs due to noise. 

• Trend Identification: 

- Long trades: When the price moves above the SL and SS lines, it signals an upward trend. Traders could enter long when the price closes above the red line.

- Short trades: When the price falls below the two lines, it suggests a bearish trend. Traders may consider entering short when the price closes below the blue line.

• Potential reversal:

- If the price closes below the SL line, it signals a potential bearish reversal. Traders should exit their buying trades.

- If the price closes above the SS line, it indicates a potential bullish reversal. Traders should exit their selling trades.

1/ In the first trading example on the MetaTrader 4 chart, when the price rises above the SL and SS lines and then closes above the red line, it signals a potential bullish trend. Traders should enter long on the EURCHF pair, setting their stop-loss price below the blue line.

Toward the trend's end, when the price falls below both lines and closes below the SL line, it indicates a potential bearish reversal, and traders should exit their long positions and enter selling in the market.

2/ In the second trading example on the MetaTrader 5 chart, when the price drops below the SS and SL lines and then closes below the blue line, it signals a potential bearish trend. Traders should enter short on the USDJPY pair, setting their stop-loss price above the red line.

Near the trend's end, when the price rises above both lines and closes above the SS line, it indicates a potential bullish reversal. In this scenario, traders should wait for a second significant bullish candle to exit their short trades and enter buying in the market.