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#4 Range-bound trading (ATR & Standard Deviation)

Submitted by Manus168

Hello Ed;

I just want to share how to detect Range or Trending Market, but unfortunately this
technique I just try & apply only in EUR/USD at H1 TimeFrame; please feel free to tweak.

Here's The Deal:

At EUR/USD Timeframe H1;
try to put this 2 Indicators: ATR(14) & Standard Deviation(14)
Now here's the rules ...

If you find ATR(14) > then the Standard Deviation(14) it means EUR/USD = Ranging/Sideways.
If you find ATR(14) < then the Standard Deviation(14) it means EUR/USD = Trending.

The Logic behinds is; if the SD is smaller then the ATR it means Market in range of the 14 bars because ATR is measure the range (high to low) of the N bars (in this case 14 bars); BUT if SD is more large then the ATR it means Market break the boundaries of High to Low 14 Bars Range
& the result Market is Trending.

Please feel free for comment Bro Edward.

Happy Trading ;)

Best Regards;

Manus168



http://forex-strategies-revealed.com/


Hi there,
Can you please post a screenshot. The main goal is to enter/ exit trades or to identify the current price behaviour?
I assume it is the second. Any way, if this is a stratergy, pls share how to enter/exit.

Thank you in advance.

As you can see in the attached picture I would rather check if both ATR and Standard Deviation point upward to determine if the market is trending. This gives better indication I think.

Regards,

Philipp

Hi there;

Just FYI: this is not a trading system, it is just for detec the market is Trending or Sideways.

Here's the screenshoot.

All The Best;

Manus168

Excellent , thank you sir

You're welcome; Kind Regards: Manus168

Plz wher can i find SD indicator

SD Indicators is a Standard Deviation; you can find at Metatrader.4 Indicators/Trend/Standard Deviation.

Kind Regards;

Manus168

Hi all.
The Trend Strength Indicator that I have made is based on the same concept as mentioned here.
It plots the rate of change between the Atr and Std at whatever period you choose.
Simply put.
If it is going up the trend is gaining strength.
If it is going down it is losing strength and is either turning into a range or a reversal to be seen soon.
If it is hugging the bottom you are in a ranging market.

I can see this useful as a breakout assistant or as a heads up for a consolidation period. This is in addition too whether you should pay more attention to your trend signals or range signals whichever they may be.
Generally the shorter the time frame the longer the period you should set.
Default is 14.

Chart and Trend Indicator below. Good trading all.

Brooky_Trend_Strength.mq4