ATR Channels price channel indicator
Efficiency of a trading strategy largely depends on the quality of the market analysis tools it uses. Today I would like to offer you the indicator of price channels ATR Channels. Perhaps he’ll be the basis of your lucrative TC. His algorithm includes the readings of moving averages, as well as ATR. For instructions on how to install an indicator in MT4, see the article “Metatrader 4 Cheat sheet”. It is displayed on the chart as a channel formed by several lines:
ATR Channels indicator settings
To experiment with
the parameters, you need to know what they mean.
Parameter PeriodsATR allows you to set the period of oscillator ATR. The degree of smoothness of the curves will depend on its value
on the chart.
With the MA_Periods parameter, you can specify the period of the main
moving average (green).
For choosing the type of averaging
the MA_type variable is used.
Mult_Factor1, Mult_Factor2, and Mult_Factor3 parameters are used to set up the internal (blue lines), middle (blue lines), and outer (red lines) channels.
Indicator, which is going on today
speech, building dynamic channels. This allows for more accurate analysis
the market situation compared to equidistant channels.
Blue and red lines indicate overbought/oversold zones.
To make a trading decision
you need to see where the center line of the channel, which is painted in
green. If up, buy, if down, sell. And for the sake of…
We use one of two levels of take-profitting
overbought/oversold (blue and red).
If the channel lines have moved away from
of the baseline (green) at a considerable distance, it indicates
increased volatility in the market, which increases the risks in trade. In this one.
it is better to refrain from opening trade orders.
Good results show
trade within the inner channel formed by the blue lines. Transactions
are opened when the price reaches one of the lines of the channel, and are closed when
approaching the price to the opposite channel line. If the price has hit one of
lines, trading is conducted within a wider channel.
SL is a prerequisite. For this purpose, you can use either local extrema or ATR Channels lines.
In spite of the simplicity of this instrument, it requires certain skills. Test its work in demo trading.