What is Chande Kroll Stop?
The Chande Kroll Stop draws two lines on the price chart, Stop Long in blue and Stop Short in orange. Each starts from the extreme of the last 10 bars, is offset by one average true range, and is then held at its furthest value over the last 9 bars. The result is a pair of stepped levels that adapt to volatility and move less often than price.
The Chande Kroll Stop suggests where a stop could sit given recent range and volatility. It does not tell you when to enter, does not size a position, and does not guarantee that price respects either line.
How to use Chande Kroll Stop
- Price against both lines. Price above both lines is commonly read as an uptrend, below both as a downtrend. Between them, the trend is unclear.
- Stop Long as a long stop. In an uptrend Stop Long typically sits under price. A close below it suggests the move has given back more than recent volatility would explain.
- Stop Short as a short stop. In a downtrend Stop Short typically sits above price, and a close above it is the mirror warning.
- Line steps. Both lines move in steps because they take extremes over a window. A step in your favour means a new extreme has entered; a step against you means an old one has dropped out.
These are ways to read the lines, not entry or exit signals on their own.
Settings
| Setting | Default | What it changes |
|---|---|---|
| ATR Length (p) | 10 | Bars used for both the average true range and the first highest-high and lowest-low window. Higher gives steadier, slower lines. Minimum 1. |
| ATR Coefficient (x) | 1 | How many ATRs the first-pass stop is offset from the extreme. Higher gives the trade more room. Whole numbers only, minimum 1. |
| Stop Length (q) | 9 | Bars in the second window that each stop takes its extreme over. Higher holds a level for longer. Minimum 1. |
Adjust the lengths and the ATR coefficient in the indicator settings.
Calculation
The stops are built in two passes. The first offsets a recent extreme by a multiple of the average true range, the second takes the extreme of that result over another window:
true range = max(high - low, |high - previous close|, |low - previous close|)
ATR = Wilder's smoothing of true range over 10 bars
first high stop = highest high over 10 - 1 * ATR
first low stop = lowest low over 10 + 1 * ATR
Stop Short = highest first high stop over the last 9 bars
Stop Long = lowest first low stop over the last 9 barsThe ATR uses Wilder's smoothing, where each bar moves the average one tenth of the way towards the new true range at the default length. On the very first bar there is no previous close, so the true range is just the bar's high minus its low.
The second window is what makes the lines step rather than wander. A level stays put while it remains the extreme of the last 9 first-pass values and moves only when a new extreme arrives or the old one leaves the window.
Limitations
- It lags. Two windows of past bars sit between price and the line, so after a sharp turn the stops can take several bars to catch up.
- It can step against you. Taking an extreme over a window is not a one-way ratchet. When an old extreme drops out, a line can move away from price.
- Volatility spikes widen it. A single large bar raises the ATR, pushing both first-pass stops further from price for as long as it stays in the average.
- Choppy markets put price between the lines. In a range the two lines can cross over each other and price can sit between them for long periods, which gives no reading.
- It is not a strategy. On its own it carries no entry rule, sizing or risk management.
Frequently asked questions
The Chande Kroll Stop is a pair of trailing stop lines based on the [average true range](/library/indicator/atr). Stop Long is aimed at long positions and Stop Short at short ones. Each is a recent high or low offset by the ATR, then held at its furthest value over a second window so it moves in steps.
Price above both lines is generally read as an uptrend and below both as a downtrend. In a long, Stop Long is the reference level for a stop; in a short, Stop Short is. A close through the relevant line is taken as a sign the move has reversed by more than recent volatility explains.
Yes. The indicator declares three inputs: ATR Length (p), default 10; ATR Coefficient (x), default 1, whole numbers only; and Stop Length (q), default 9. Each has a minimum of 1. Open the indicator's settings on the chart to change them.
Values on closed bars are not revised. The current candle's lines move while it is live and settle when it closes. Because the ATR is smoothed from the start of the loaded history, scrolling back to load older bars recalculates it, and values near the very start of the range can shift slightly.
SuperTrend keeps one band that flips from below price to above it when the trend changes. The Chande Kroll Stop always shows both a long and a short level, built from window extremes rather than from the bar's midpoint, and leaves the reading of the trend to price's position against them.
Use the Add to chart button at the top of this page. It opens BTC/USDT on Binance in the Altrady Charts terminal with the built-in Chande Kroll Stop already applied. On any other market, open the indicator picker on the chart and choose Chande Kroll Stop from the Trend group.