Daily ATR Indicator

Daily ATR Indicator

The Daily ATR Indicator for MT4 measures the daily volatility of any forex asset

Volatility is a vital factor in the forex market that every trader must check before placing any trade. This is because traders always anticipate taking advantage of a highly volatile market. The best way to measure the volatility of the market is using the Daily ATR Indicator.

The foundation
Indicator for MT4 measures the daily volatility of any forex asset. These indicator plots two levels per day. The red levels indicate where the highest daily ATR is. Contrarily, the yellow levels indicate the lowest daily ATR. The diagram above shows the Daily ATR Indicator on the EUR/GBP H4 chart.

From the chart above, the red level (0.85661) is the current upper daily ATR level. Furthermore, the yellow level (0.85350) is the current lower daily ATR level. The prices between these two levels shows the trading range of forex assets per day.

A higher volatility of prices occurs when a forex asset moves past any of the ATR levels. A break below the yellow levels means the selling pressure is high for the day. Conversely, a break above the red levels implies that the buying pressure is high for the day.

The Daily ATR Indicator for MT4 is specifically suited for intraday trading.

This is because intraday traders open and close their trades positions in a day. Thus, they can place entries, exit and stop loss using the indicator levels. Most traders wait for the price to move past the ATR levels before placing any trades.

Buy entries are mostly placed when the price breaks the upper ATR level. Many traders on long trade can also exit the buy trades at the up-level. For long trades, stop-loss are mostly placed at the lower level.

Contrarily, sell entries are mostly placed when the price breaks below the lower level. Short positions’ take-profits can be placed at the lo-level. Also, stop-loss for short positions can be placed at the upper level.

Conclusion
The Daily Average True Range (ATR) indicator is a powerful tool to determine the daily trading range. Many intraday traders specifically use this indicator for entries and exits of trades. Indicator should not be solely used as a trading strategy. Thus, the indicator is best used with price action and other technical indicators such as MACD.