Comparing Five Trailing-Stop Methods with a Shared Ratchet and Risk Zones

Summary

This indicator offers five ways to calculate a trailing stop: ATR or Supertrend distance, Chandelier levels based on recent swings, Donchian swing extremes, a standard-deviation channel, or a fixed percentage from an anchor price. Each method supplies candidate long and short stops to a shared ratchet: the active stop can move toward price but does not loosen in the same direction until a close crosses it and changes the trend state. An optional higher-timeframe ATR uses the last closed higher-timeframe value to avoid intrabar updates.

A separate safe-zone display measures the distance between price and the active stop in ATR units, labeling the buffer safe, watch, or critical. The indicator also provides trend-flip markers, stop-distance information, and alerts for stop crossings and critical-zone entry. These features describe stop placement and proximity, not a tested trading system: the document reports no backtest or performance evidence. Stop behavior depends on the chosen method, lookback, multiplier, anchor, and chart data, while gaps or fast price moves can pass beyond a plotted stop before an exit is available.

Key ideas

• The indicator provides five alternative formulas for long and short trailing-stop candidates.
• A shared ratchet keeps the active stop from moving away from price while the trend state persists.
• The safe-zone display measures price-to-stop distance using ATR and classifies the buffer into three zones.
• An optional higher-timeframe ATR references a closed bar to avoid intrabar repainting.
• The indicator supplies stop and trend alerts but provides no evidence of strategy performance.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.