Trading in markets with trend or no trend
The ATR (No)Trend strategy
About 70% of the time the market shows no trend. Many trading strategies become ineffective. The ATR (No)Trend strategy is very attractive because it can be used in markets with a trend and markets without a trend.
The ATR (No)Trend strategy consists of two bands: a broad band and a narrow band. Both bands are calculated on the basis of the Average True Range (ATR). The ATR is the best indicator to measure volatility.
The narrow band always evolves within the broad band. The wide band indicates the trend. Green indicates the trend is positive (bullish). Red indicates the trend is negative (bearish). This example shows the two bands of the strategy. The strategy can be used on all instruments (market indices, forex, stocks...) and on all time-based charts.
Conclusion: The ATR (No)Trend strategy is one of the few trading strategies that can be used in a market with a trend and in a market without a trend (a sideways market).
Opening positions
This strategy is relatively unique in that it gives two types of signals. If the price breaks out of the broad band and resolutely rises (falls) then a break-out signal is given. This is a market with a trend. If the price turns within the broad band, this is a pull-back signal. These signals appear in a sideways market.
Break-out trading signals
When both bands have the same opinion (colour) and the price moves significantly outside the broad band, the NanoTrader platform shows a signal.
This example is a buy signal. Both bands are green and the price rises above both bands.
Pull-back trading signals
A signal appears when the trend of the narrow band reverses in the lower (upper) 1/3 of the broad band. Pull-back signals fall within the broad band.
This example is a buy signal. The narrow band turned green in the lower 1/3 of the broad band.
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Register nowThis example shows an ideal scenario with four signals: two break-out signals (1 and 4) and two pull-back signals (2 and 3).
Closing positions
The ATR (No)Trend strategy operates with a price target order and a stop loss order.
Closing break-out positions
The stop loss order tracks the broad band. The price target order is set at 3x initial risk. This results in an interesting return-to-risk ratio of 3.
This example shows the price target order and the stop loss order (red line) Notice how NanoTrader automatically raises the stop loss order based on the wide band.
Closing pull-back posities
The stop loss order is placed at the lowest (highest) price of the last four candles. The price target order is placed close to the top (bottom) of the broad band.
This example shows two pullback positions, a buy and a short sell position. In both cases, the price target is reached.
Use this FREE trading strategy
Follow these steps in the NanoTrader Full platform:
1. Open the chart of the instrument you want to trade.
2. Select the "WHS ATR (No)Trend" strategy in the "WHS Strategies" folder.
3. Activate "TradeGuard+AutoOrder" in the chart to trade semi-automatically or "AutoOrder" to trade automatically.
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