41. How to Use the Average True Range (ATR) To Set Stops

[gpcdist]

A 2%for the cost of security or the total account

[thinkingsharp]

David you got see this video about ATR it is really cool youtube.com/watch?v=u-PfrzZTB0­A

hehe

[FreeFOREXautoROBOT]

have great results with EA, there is one 100% Free

[TimothyMcCready]

Nice video presentation: while money management gets a lot of lip-service, few actually detail what it means, or what it means to trade without it. Using ATR as a means of determining a non-arbitrary exit point is one great way to incorporate money management into an overall trading PLAN!

Nice work.

Stay timid,

Timothy "Timorous" McCready

[SilverShamrock71]

Given that volatility expands and contracts in cycles on most if not all instruments, it is usually in a state of flux anyway. Personally I think just using a three day average of pivots for additional S&R would be just as affective. Also, any S&R should not be adhered to religiously, as S&R levels are being broken all the time, otherwise markets would be constantly range-bound, they should just be viewed as potential reaction points.

Not trying to be smart, just calling it the way I see it.

[laton2010]

stay away from forex it is the biggest scam business in the world. the 5% winners are the market seller in agreements with brokers. stay way from this devil business. go to another markets

[golfcoachhc]

Great videos , David. The video is nice, precise and short. Great stuff.

[laton0]

free signals

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[loveall18]

Awesome,, it was very usefull

[qtracker68]

nice bull flag too:)

[elwalvador]

This is very useful information, I have been trying to find an indicator that mesuares volatility so that I can put a stop underneath pivot points that's far enough away to let the stock move a little with out getting stopped out of the trade.

In you experience Dave, what have you found to be the most profitable ATR multiple, 1 ATR below the entry point, 1.5? 2?

[jgray110]

Bulls make money, Bears make money, Pigs get slaughtered.

[amgalanbator]

poor pigs, I am a pig, how dare you say that. You profit a lot from pigs, remember that.

[jgray110]

Bulls make money, Bears make money, Pigs get slaughtered.

[ILHG2357235]

ANY GUYS UP?

SOMEONE TALK TO ME wq

[Frrobs]

Hi David, last Q for today :) I would like to use the ATR as a daytrader. But the value could change from e.g. 5 to 15 min. chart, which is normal I suppose as the period and therefore the time horizon is fixed (in my tool at 14). So what time span would you take as a daytader (e.g. S&P). In your example your time span was 14 days.

Thanx again for your great vids. Frrobs

[InformedTrades]

Hey Frrobs, The default setting normally for the ATR is 14 periods. While this does not adjust automatically the indicator does adjust depending on what time period you chart is set to. So for example if you are looking at the daily chart then it is going to take the last 14 days. If you are looking at a 1 hour chart it is going to take the last 14 hours etc. Best Regards, Dave

[Frrobs]

Thanx for your answer (and the other ones). I suppose 14 is a magic number :-)

Regards,

Frrobs

[chasleo]

I understand the overall concept here - but in looking at an ATR for one of my charts I realized it doesn't show a dollar value in change/difference, but rather a numerical representation of overall volatility.

I'm wondering how you came up with your values for a stop - perhaps you could please elaborate upon ATR interpretation and execution in further videos - the detail within these screens when enlarged loses focus and the numbers can be difficult to read.

[InformedTrades]

Hi Chasleo, You are correct that the ATR gives a value which represents volatility. So for instance if a stock has an ATR of $2 and is trading at $40 a share, then for example I may place a stop 1 ATR away from the current price which would be $38 if I bought to enter the trade. Best Regards,

Dave

[InformedTrades]

Also if you head over to InforedTrades I have the charts that are in the videos posted below the video on each page of the Trading Basics course which you can find in the free courses section of the site. Best Regards, Dave

[MoneyMatthew]

Thanks for taking the time to make this video..Great information and presented greatly as well...

[InformedTrades]

Hey Money Matthew, Thanks for the comment am glad you like it. Best Regards, Dave

[ladypolo2007]

I think your videos are great. There aren't alot of reliable free information out there. Keep up the good work for the willing traders.

[InformedTrades]

thanks a lot for the comment I am glad you like the videos. I have tried to categorize what I feel is the best information out there outside of my own videos on my website so be sure to check that out as well. Best, Dave