21 Feb 2018



FOUR RULES OF ATR (AVERAGE TRUE RANGE INDICATOR)


(1) When  used ATR as an indicator, ATR'S actual dollar amount is not significant higher volatility currency pair should have true range.


(2) When a currency pair is in its lower ATR range, it is a sign that the pair is consolidating, or trading within a narrow proce range. This can followed by continuation of the pair in the direction it had previously been going, or it could signal a reversal. By the time the ATR began to rise, meaning the day's trading range is increasing, it should be clear which the pair is going and you can buy or sell accordingly.


(3)  When a currency pair is in its ATR range, it's a sign of high volatility and suggests a currency pair is trending. Since trends tend to be sporadic and short-lived, the higher end of the range may signal an end to the trend, if you are already in trade, you might consider existing.

(4)  Sometimes you' ll notice that the ATR and currency price aren't going up or down at the same time, instead their movement are opposite each other, one going up while other is going down. This divergence occurs because true range is an absolute value( and thus always a positive number). When the ATR is going down and the price is high, it is going into consolidation period. This makes it slightly different from most oscillator-type indicators where upper limits signal overbought territory and lower limits oversold.

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