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Advanced system #16 (30 min ATR breakout)

Time frame: 30 min
Currency pair: any.
Indicators:
ATR 14
EMA 14 set on ATR 14.

i-FractalsEx: period 3, max bars (500 or any other number - it doesn't matter here).
Download: i-FractalsEx.ex4

Steps to set EMA14 over ATR 14 properly:
a. put ATR on the charts as usual.
b. from the Navigator window (on your left) drag Moving Average on ATR and in the settings make sure to put:
- period: 14
- MA method: Exponential
- Apply to: Previous Indicator's Data

Trading plan:

The idea:
To take a trade when the market prepares to accelerate.
This happens in a distinctive cycle where slow conditions by the end of the day (end of the New York session, through the Asian session) are changed by a fresh morning session (right after 00:00 EST).
ATR will help us to anticipate and prepare for that exact moment where the market is about to accelerate, while we'll focus on preparing a breakout range to catch the move.

The rules:

When ATR is reading above 14 EMA - the market is active - that's where we want to be trading.
When ATR is resting below 14 EMA - there isn't much activity going on - that's where we don't need trade.

Use Fractals to set a breakout range.
Set a pending order above and below the range when ATR approached the 14 EMA from below and is about to cross (approximate timing here).

Preparing for the first trade:

- Find the last occurrence where ATR went below 14 EMA.
- use colored fractals from iForexEx indicator to create a breakout range. Use only those colored fractals that fall withing the period where ATR is below 14 EMA.
- if there are several same color fractals found, use the most distant ones - those that will create a wider range.
- when ATR approaches the 14 EMA from below and is about to cross (it's always an approximate timing, rather an anticipation, but you'll learn to identify it quickly after a few days), set pending orders above and below the range. One of them will be triggered on the breakout.
- SL - the opposite side of the range.
- min TP target = the width of the range, after that you can:
a. keep a position as long as ATR is rising and its above 14 EMA.
b. close when ATR goes below 14 EMA.
c. if you took partial TP or have a second order in place, you can keep them running for the rest of the day, even when ATR goes below 14 EMA until ATR falls to 0.0014, after that initiate a trailing stop and let it close with a stop.

That's the strategy. Hope you like it.

Hi

Great method and idea.
I have a question though....how do I save your article for future reference?
I tried right click but unable to select and save.
Thanks.
Newboy

Good Method Edward i must say, will start testing it from tomorrow.
Can i trade it anytime, when ATR goes below EMA during whole trading day?
Here are rules what i observed:
1: Mark the range when ATR cross below and is below EMA, and mark the high and low of range.
2: When ATR is near to break above EMA set pending orders at High/Low of range.
3: SL other side of box.
4: TP 1st size of range. 2nd when ATR cross back below EMA. 3rd When ATR goes below 0.0014 set trailing stop.

Regards,
faisal

Edward,

Where can i find iFractals indicator. can i use simple fractals?

Regards,
faisal

Please make Template
TNX

I tried to put 14EMA on ATR 14 window but my platform is not allowing me to paste both indicators combined. How can i fix it?

Hi everyone,

sorry, forgot to add the indicator: i-FractalsEx.ex4

@Newboy:
copying of the content is not encouraged, sorry about that. It's a necessary measure to prevent copyright violation. Unfortunately, because of known copyright abuse (which is a common issue for many online resources), the good traders also have to adjust to new conditions.

@Faisal:
Ideally, it should be the beginning of the trading day - before 4-6am EST. Any new entry signal that comes after 12 noon should be ignored.
I support your rules. There is plenty of opportunities to take advantage of using ATR+EMA.

You can definitely use regular fractals. What the i-Fractals does, it excludes/deletes certain fractals according to the period set, so that you see fewer fractals on the chart.

@User:
if you use MT4, you'll succeed by following the steps given above: "Steps to set EMA14 over ATR 14 properly"
If, however, you have another platform, then it depends on its functionality. It's better to ask your broker if such feature is available.

Kind regards,
Edward

Hello Edward
I have some more questions :)

1. Sometimes ATR just touch the EMA and turns back below so how to ignore this move, candle can easily hit our pending order.
2. Can we take entry when candle close outside of box as a conservative approach?
3. What if we dont get high or low ifractal arrow for range box?

Regards,
faisal

Hello Edward,

Where can i discuss my chart setups with u????

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