ATR Exit
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- In an upward trend, the long trailing stop line (orange line under buy) appears and advances upward until the close crosses under the line.
- In a downward trend, the short trailing stop line (magenta over sell) appears and declines until the close crosses over the line.
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Description
The ATR Exit indicator uses the candle close + ATR value to draw trailing stop lines (orange under buys, magenta over sells) that advance with the trend until the trend changes direction. It uses a multiple of the Average True Range (ATR), subtracting it’s value from the close on buy, adding its value to the close on sell. Moreover, the trailing stop lines are generated to support the order’s trend direction (long or short):
- In an upward trend, the long trailing stop line (orange line under buy) appears and advances upward until the close crosses under the line.
- In a downward trend, the short trailing stop line (magenta over sell) appears and declines until the close crosses over the line.
While we use the ATR Exit as a trailing stop, it can be used in a volatility breakout strategy. The trader or EA can buy whenever the close crosses above the upper trail line and sell whenever the close crosses below the lower trail line.
This ATR exit trail is superior to using a fixed percentage because its change is based on the volatility characteristics of the underlying instrument and time frame. As Investopedia makes clear, “as the trading range expands or contracts, the distance between the stop and the closing price automatically adjusts and moves to an appropriate level, balancing the trader’s desire to protect profits with the necessity of allowing the [instrument] to move within its normal range.” (r)
- Find trends with this ATR based indicator
- Can work with trending mode or band mode
- Can be used as one of the trailing stops for Ultimate Trailing Stop EA
| Current version: | 1.0 |
| Operating system: | Windows 7/8/10 |
| Published:7 | 7 October 2020 |
| Trading platform: | MetaTrader 4 |
| Updated: | 16 December 2020 |
Parameters:
- AtrPer (14) – Indicator Period;
- Factor (3) – This is the factor for multiplying the ATR. You may use fractions – this does not need to be an integer;
- Shift (1) – Indicator shift;
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