--- title: Perfect Stop Filter description: "  [![](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Buy.png)](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Buy.png) [![](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Sell.png)](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Sell.png)   This filter uses the \"Chandelier Exit\" to consider an instrument as a buy or sell. It is good for spotting trend reversal, and is usually implemented as a Sell or Cover Filter (Stop Loss). The Chandelier…" url: "https://portfolioboss.com/documentation/perfect-stop-filter/" updated: "2022-08-27" category: "Chapter 7 - Filters & Rules" --- # Perfect Stop Filter   [![](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Buy.png)](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Buy.png) [![](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Sell.png)](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Sell.png)   This filter uses the "Chandelier Exit" to consider an instrument as a buy or sell. It is good for spotting trend reversal, and is usually implemented as a Sell or Cover Filter (Stop Loss). The Chandelier Exit is calculated by finding the *highest* or *lowest price* during a specified period, and then subtract/add such price by the multiplied [ATR](https://portfolioboss.com/documentation/n-atr-above-below-sma-filter/). During an *uptrend*, the Chandelier Exit will *subtract* the *highest* price of the period by the multiplied ATR, thus the Chandelier indicator appears below the prices most of the time. If an instrument's closing-price goes below this indicator, it's a strong sign the trend will reverse toward a downtrend. Such condition is good for exiting a Long Position, or entering a [Short Position](https://portfolioboss.com/documentation/a-strategy-for-short-selling/).   [![](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Indicator-Uptrend-000.png)](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Indicator-Uptrend-000.png)   Now, during a *downtrend*, the Chandelier Exit will *add* the *lowest price* of the period by the multiplied ATR, thus the Chandelier indicator appears above the prices. If an instrument's closing price goes above the indicator line, it's a good sign the trend will reverse toward an uptrend. Such condition is good for entering a Long Position, or exiting a Short Position.   [![](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Indicator-Downtrend-000.png)](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-Indicator-Downtrend-000.png) It's important to note: due to the way this filter is calculated, the indicator line *never goes down* during an *uptrend*. Ditto it never goes up during a downtrend. Such behavior means the filter is good as a stop-loss: The stop-loss line will go higher as the price goes higher, thus locking your profit from a downward movement (if the price hits the indicator, the strategy will exit the position). It also applies for a Short Position: As the price goes lower, the stop-loss will also go lower; so, your profit is protected from an uptrend (whenever the price goes upward and hits the stop-loss, your Short Position will be exited).   ---   **1.**  The first parameter defines whether you're looking for instruments that close "Above" or "Below" the Chandelier indicator.   [![](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-1st-Param.png)](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-1st-Param.png)   --- **2.**  The second parameter defines the *period* to look for the Highest/Lowest price, as well as the ATR duration.   [![](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-2nd-Param.png)](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-2nd-Param.png)   --- **3.**  The third parameter defines the ATR multiplier. Usually you want to input a value of up to 3 here. Which means if the closing-price breaks that 3x ATR, it's a strong indication of a trend change.    [![](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-3rd-Param-1.png)](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-3rd-Param-1.png)   But if the portfolio's volatility is high, you may want to increase this value, so you don't get false signals due to the ups and downs of the price.   --- **4.**  The fourth parameter, "Dynamic Multiplier", will *automatically change* the ATR multiplier if the instrument's volatility changes.     [![](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-4th-Param.png)](https://portfolioboss.com/wp-content/uploads/2019/10/Perfect-Stop-Filter-4th-Param.png)   In other words, you don't set the ATR multiplier manually; the strategy will set it for you, depending on volatility.   ---   #### Note:   In Portfolio Boss, the Chandelier Exit is called "Perfect Stop", and if you use this filter, a "Perfect Stop" indicator is shown on the instrument's Price Chart.         [**Back to Top**](https://portfolioboss.com/documentation/perfect-stop-filter/#backtotop)