Need Linda Bradford's volatility channel
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Hi,
How to plot a 0.5ATR, 3ATR and 4ATR channel on the screen?
Thank you
source: https://www.lbrgroup.com/images//Linda%20Paris%20on%20Trade%20Management/TradeManagement.ppt
Relationship between targets & stops with random entries
•Stop and reverse off randomly generated trade points yields a 50% win/loss ratio as well as a profitable system 50% of the time.
•Random entry with Large Target and Large Stop (3 ATRs): The win/loss ratio still hovers around 50%. (3 ATRs is just outside the “noise’ inherent in price action).
•Random entry with Small Target and Large Stop (1ATR/3ATR). The win/loss ratio jumps up to 70%+. While the chances of getting 1 ATR before a 3 ATR stop is hit are greater then 70%, it still is not a profitable system. If we use a target of .5 ATRs and leave the large stop in place, the win % jumps to 82%. The increase in % win should be encouraging for the short term discretionary trader.
•Random entry with Small Target and Time Stop (1ATR/8bars). Though the % win drops to 65%, the size of the average loss decreases. So, while a larger fixed stop gives a trade more time to be profitable, a discretionary trader may choose to exit if the trade does not work within a reasonable amount of time.