Using ATR To Find Daytrading Opportunities

When The Trend Is Not Your Friend

There's something to be said for the idea that ATR is more important than trend direction for intraday trading.

This chart shows how this can happen.

Overall the trend is up. It has pullbacks here and there but whether the larger trend is pointed up or down the big range days are at lower prices and when price pushes up to expand the overall range higher the daily ATR drops.

This means that just because the trend is headed upward you might want to avoid daytrading at all. Even trading long can be dangerous when the range is so compressed.

There are lots of big green large range days down in the pullback areas.

The ES has not been triggering on my scripts hardly at all and I was wondering why since you'd think with all time high prices it would be a field day.

This shows why and I'm going to be adjusting things to find where the high expected ATR days are likely to be rather than finding where it has broken from the value area.

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Here's an idea to make ATR more portable between symbols you're trading since it's going to report in the units of whatever the symbol uses. Apply a momentum indicator such as RSI to ATR and look for days when the range has increasing momentum to find dates where you have a likely to find large intraday trends.

This video shows how to apply an indicator on another indicator.

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05:05

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Using ATR 1 and bollinger bands period 200 and width 1 seems to work as well. For instance finding the breakout of the last big triangle on btc.