How to Use ATR Strategies in Forex Trading||how to use atr in intraday trading Best Forex Strategy
How to Use ATR Strategies in Forex Trading||how to use atr in intraday trading Best Forex Strategy
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Time Frame: 4H
Indicators:
20 SMA
40 SMA
ATR (20)
Uptrend Setup Conditions:
A. Close of setup bar (20 SMA and 40 SMA)
B. Close of one bar ago (20 SMA or 40 SMA)
C. (HH5-LL5) 2.5*ATR(20)
D. HH3 HH10
Note: setup good for next three bars
HH5 = Highest High of the last 5 bars start from setup bar
LL5 = Lowest Low of the last 5 bars start from setup bar
HH3 = Highest High of the last 3 bars start from setup bar
HH10 = Highest High of the last 10 bars start from setup bar
Uptrend Entry Rules:
Once setup bar occurs, we can consider placing a trade for the following bar as
follows:
= Buy Stop at the HH3 + 3 Pips + Spread
Stop Loss
Place a stop loss at the LL3 – 3 pips
Exit Strategy
Profit Target 1: sell ½ position at Entry price + 0.75 ATR(20)
When Profit Target 1 is hit, change the stop on the remaining ½ position to
breakeven.
Continue to move the stop up after each bar closes as follows:
sell remaining ½ position at LL3 – 3 pips only if higher than breakeven.
Profit Target 2: sell remaining ½ position at Entry Price + 1.5 ATR(20)
Downtrend Setup Conditions:
A. Close of setup bar (20 SMA and 40 SMA)
B. Close of one bar ago (20 SMA or 40 SMA)
C. (HH5-LL5) 2.5*ATR(20)
D. LL3 LL10
Note: setup good for next three bars.
HH5 = Highest High of the last 5 bars start from setup bar
LL5 = Lowest Low of the last 5 bars start from setup bar
LL3 = Lowest Low of the last 3 bars start from setup bar
LL10 = Lowest Low of the last 10 bars start from setup bar
Downtrend Entry Rules:
Once a setup bar occurs, we can consider placing a trade for the following bar as
follows:
= Sell Stop at the LL3 – 3 Pips
Stop Loss
Place a stop loss at the HH3 + 3 Pips + Spread
Exit Strategy
Profit Target 1: buy ½ position at entry price – 0.75 ATR(20)
When Profit Target 1 is hit, change the stop on the remaining ½ position to
breakeven.
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