ATR Moving Average
ATR Moving Average draws a moving average of the standard Average True Range( ATR ) in the same window.
|ATR period ||Set Price period for ATR calculation |
|ATR level||Set ATR value for thresholding( only whole number, ignore leading zeros e.g. 0.00089 = 89 )|
|MA Period||Set moving Average Period|
|MA Method||Set moving average method( Simple, Exponential, Smoothed and Linear Weighted )|
|MA Shift ||Set moving average shift |
The ATR is a technical analysis indicator that measures market volatility by decomposing the entire range of an asset price for that period. Higher ATR values means higher market volatility.
By theresholding these values, we can create a filter that shows when the market is volatile.
Method 1 :
a. Identify a region on chart where the market is less volatile( price is moving slowly or sideways ).
b. Check the ATR value e.g 0.00089
c. Set the ATR level to the whole number starting on right, ignore leading zeros .e.g 0.00089 = 89
Everytime the ATR value is above the threshold then the price movement must be more volitile than the region we started with in a.
The points where the ATR crosses the level can be used to generate signals.
This method is useful if you want to filter volitility when you have specific ATR values.
a. Identify a region on the chart where the market is volatile( price is increasing or decresing rapidly ).
b. Identify the number of candles( period ) in the region e.g. 5
c. Set ATR MA Period to this number and ATR Period to a higher number e.g 10
Everytime the moving average( ATR MA ) is above the ATR the market is volitile for the given period.
The points where the ATR and MA cross can be used to generate signals.
This method is useful if you want to filter volitility without specific ATR values.
For MT4 : ATR Moving Average MT4