The idea is to use the 2 ATR ST and as filters to direction of trade and to take trades once price is above or below the 1 SD (the first band around the 50 ).
Entries are made off of tests of the 1 SD band or tests of the 2 ATR ST . The stop may be any of the 1 SD band, 2 ATR ST , or 3 ATR ST , that gives the price comfortable room and/or desirable reward to risk.
Stops may be trailed off of either of the ATRs (2 or 3), as long as they remain mostly on the other side of the 1 SD band (as in 3 fourths of the time, or more), relative to price.
In the case of longs, consider selling all, or a portion, of the position whenever price forms a candle setups (with confirmation) near "extreme" levels, relative to either the SD bands or 50 (the thick black line on the chart indicates a 25% to the 50 ). Anything at or above the 2 SD line is extreme, particularly 3 SD and up. Especially be weary if price has tested a band two or three times previous and even more so if or are showing divergence with price tops.
In case of shorts, treat everything said for longs in reverse. Look for candle setups out of the extreme conditions.
Examples of candle formations that I'd be on the lookout for include "tweezer tops" (or candles), long wick candles that counter the trend (some may prefer to wait for confirmation by a follow through day, but I let the circumstances determine what option is best), and multiple days of fractals near a price range top (in which case the stop could be hugged up against the bottom of the range).