I cannot comment on safe zone of chandelier stops.
Concerning the stop placement you first need to determine what your objective is, a single thrust large or small, wave 1-3 getting out at wave 4, maybe wave 5 only or the entire trend. This should be defined before you enter the trade. You need to know what you are trying to accomplish before entering a trade so you can manage it to that effect.
I often will play multiple strategies within the same trade, that is entering with multiple positions with each position having a different objective. I will look how the issue is behaving before entering the trade. It is important to note the moving averages the issue seems to be respecting. We cannot see into the future but we can use the past as a guide. I like to set my moving averages to follow the lows, not the close in an uptrend. I may use a 10, 20, 34 and 50 all exponential, occasionally I will use others. With different timeframes I use different moving averages. It may sound counter intuitive but I use faster moving averages with the lower timeframes, slower with higher timeframes.
When you get a close below a moving average you exit a position. A quick move up then a close below the 10 is where I may exit my first position. This will help cover my costs without moving my stops to the breakeven point of the trade. I do not like moving my stops to the breakeven point because I find this area is often tested stopping me out. Taking profits at a close below the 10 gets me out on the first small thrust. My next exit is when the price crosses or closes below the 20, maybe a wave 2 correction assuming I was in at wave 1. For this example let’s say the 34 rides out a wave 2 correction but take me out at a wave 4 correction and so it goes. You get the idea. Each issue is different as well as the different timeframes and moving average used and objectives of the trade. Now I want to make an important point here. You need to be very aware of what the moving averages are doing and when they start to normalize. In a sharp reversal from a bear to bull market, versus a move from consolidation, the moving averages are going to act differently until they can normalize or in other words start to run parallel to each other. So this technique may not be useful in the first part of a trend. In actual fact I usually use other exit strategies in the beginning of a trend. In my opinion the initial stages of a trend are the most difficult and unpredictable, and toughest to manage successfully. This technique is also tough to use in a volatile market. The above technique is a simplified example but often very effective.
In a volatile market or a market that tends to move sideways for a while during a correction I may use a Fibonacci stop provided I am not going to give back too much of the move. Trend line violations are not much good in a market that likes to move sideways before continuing on. Other stops I may use in volatile markets are a percentage change of a moves pullback (not Fibonacci, your charting package should have this built in), or a statistical pullback based on the average recent pullback for that issue. A small average pullback may be 20 pips with the largest being 25, so I set my stop at 26 or 27. A larger pullback like a wave 2 or 4 may average 50 with the largest being 70. I will set my stop around 70. Again it depends on the issue, timeframes and other factors.
Linear regression channels can be helpful at times. These are basically statistical trend channels. 95% of the bars should close within the channel. Regression channels work well with consistent smoother trends but can be modified like using sliding parallels with median lines. An aberrant move once the channels are set may need to be accounted for, truncated moves within the channel also occur.
What you will notice over time is many of the different techniques you may employ will often get you out at about the same price. You will see a moving average running almost on top of a regression line or trend line, or a one bar stop exiting you about the same time as 10 moving average.
There are many different exit strategies. You need to be able to adjust to the conditions, objectives, timeframe, and issue. My point is one size does not fit all. Be flexible and alert to what you are looking at. You need to choose the tools/techniques which best fit the conditions being faced.
