Top 3 Strategies to Profit From the ATR Indicator (Prop Trader Secrets)
Вставка
- Опубліковано 29 тра 2024
- SMB Capital trading workshop (free) tinyurl.com/ycx8szmz
Garrett on Twitter: / garrettdrinon
#tradingindicators #ATR #daytrading
00:00 - Intro to ATR
11:24 - Example 1
15:14 - Example 2
19:34 - Example 3
21:39 - Wrapping Up
SMB Disclosures www.smbtraining.com/blog/smb-...
SMB Capital trading workshop (free) tinyurl.com/ycx8szmz
Garrett on Twitter: twitter.com/GarrettDrinon
when I register for a workshop or presentation do I need to be available at a certain time or do you provide a link to the workshop to access it online anytime I am available?
23:05 I am just learning trading papermoney on think or swim, how do I enter an ATR trailing stop ?
Mike I would love to be apart of this superb organization! Wallstreet1982!
I use ATR daily! I'm full time trader. It's probably the biggest component to my profit taking targets.
What else do you use that you like ?
What is the best setting according to you?
How do you choose which ATR time chart you use does it depend on how long you want to keep the position
Can't wait to watch this. When I read about ATR in a book and heard a few top traders mentioning it in interviews it was almost an aha moment, I've now added it to one of my strategies as part of key entry criteria. It was the missing link.
I like to use ATR as a percent of the closing price to compare across stocks. I've also started using Keltner channels based on your prior video to spot overextensions. Now, I am going to play around with using it as a trailing stop or target prices.
Brilliant insight on the many uses of ATR. thanks Garrett and all at SMB.
It was really, really awesome! Having known about ATR, I could never think about using this crucial piece of information in such incredible ways. I mean hats off to you guys for really making us understand the way we can play around with ATR for creating a Trading Edge. Thanks a lot....
Thanks, Garret. You are the best. Thanks for clarifying that confusion about the ATR indicator.
💪
glad you enjoyed!
Garrett is one of my new fav SMB video makers. Shoutout to the Steven Spencer materials from back in the day.
Thanks for quite useful information! It is very good to use ATR for taking higher RR Ratio...
ATR is insanely useful. Sizing across stocks to compensate for volatility. Ranges on multiple time frames, like 2x off the 20 SMA. Helpful video, thanks.
How do you use ATR to size positions?
@@DustinHallen Risk/ATR=Size
@@peppercornfury if you trade breakouts on the daily and the breakout occurs after after a 0.25 ATR move, do you offset your sizing to account for that? It's your stop at the low of day less 1 ATR?
@@DustinHallen Suppose you could slice it how you please, including deciding that you want some multiple of the ATR to be the denominator. In my case it is a generic sizing strategy used on intraday ATRs, such as the 5-minute ATR. I would be range trading with maybe a stop of 1xATR and a target of 2xATR. Entering near 2xATR from the 20 SMA and targeting the 20 SMA.
@@peppercornfury I see. Thank you!
Wow, i´ve been using these ideas for a while. I wish I had learned them sooner! Great content, thanks for sharing!
Thanks for that very informative.. im learning tons from all you guys at smb putting out this great content..
Very good video on Average True Range. Thanks!
Thank you for sharing this video. It was informative.
I like that "Who The Hell Knows" how to write that formula.
My favorite educator/trader with smb let’s goooo!
Thank you Garret, solid video as always !
This is a really helpful post, thank you. One question, ATR is calculated over a range of time. So what is a good range of time? And does this change for more volatile stocks? I’m thinking about daily time frames.
We need "Life of a Prop Trader" and hear what they personally go through each day. That would be awesome!
Caffeine?
Thank you! Great explanation!
Very helpful information. Thank you.
Garrett really explains trading concepts, in such an easy-to-understand practical way, thank you for the brilliant content.
Always look forward to a new video 🎉🥳
Great content like always! Thx Garret!
you’re welcome, glad you enjoyed
Amazing info thanks Garret 🙌🏼
you’re welcome
Excellent explanation!!!
I'm a VWAP guy but will consider the ATR indicator going forward.
Thanks Garret great info!!
you’re welcome
Thank you so much for this one!
you’re welcome
Great lessons as always 👏🙏
glad you enjoyed
Brilliant one! ATR, the atomic metric for stock moves. Keltner channels...that's what Justin was using to place overextension trades on a bar by bar trade, right?
Thank you for responding to the comments requests. I was one of the peole who asked for a more in depth video about ATRs.
thanks for your suggestions!
@@garrettdrinon Thank you for the free quality content
you're welcome@@gb18f50
Awesome. Thank you !
Great video, thank you
ATR and ATPR for different needs.
Hi Garrett. I like the idea of normalizing an individual stocks intraday/ 3-5 day move by discussing it in terms of how many ATR's it has moved. On your desk, is this normalization done with Keltner Channels or do you express it by dividing ATR14 by ATR1? If the latter, it seems that would vary depending on the timeframe... or am I missing something? Great content as usual! Thank you!!
Thank you!!!
THANK YOU GARRET : )
you’re welcome
As always great and useful knowledge to improve and enhance our trading. When calculating your daily ATR, what time period is generally being used on the desk? 14? I really like the idea of the ATR trailing stop, Ill have to test that one..
default is 10 days on our platform
if you want to pick up on changes in volatility then 10 is great
if you want a super stable normalization for a model then sometimes the longer the better, like 200
do you offer any in house training? like if I flew there from Florida could I come there and further my trading education?
Send an email to info@smbcap.com please
normelizing expectations of the risks and the wins in better words !
Have you guys used APTR ? is the same but represented as a percentage TOS has it.. I believe is easier to work with and also can normalize the ranges between tickers
Thank you for the great content! From your experience, what is the number of candles to be used for the calculation on the daily timeframe and others. Huge thanks again
10 is good for a faster, more sensitive measure - 50 is good for a longer and stable measure
the atr changes wildly depending on which time frame chart you are looking at so which one are you using?
Hi.. what is the average period used to calculate daily ATR in the examples you have shown in this video?
Very useful! 👍
Good stuff, but can u tell me if there is anything ATR could be used for ( except trail) which cannot be done through Keltner..even trail could be..thnx
Keltner is built on ATR
just all variations on the same measurement, utilizing it in different ways
whole idea is normalization via measuring volatility
This guy is the MCA of Prop Trading “strictly ATR is the style I go…never prop trade with the pantyhose”
Good lesson. I'm trying to use ATR to set my strike prices on iron Condor, trading SPX. I typically use 21-30 days for expiration. What's the best way to apply the ATR in this case?
i’d need to know more about your strategy to be more specific with an idea, but using some reference to a weekly candle ATR in this case might be useful
@@garrettdrinon thanks for the quick response. What other info do you need?
Which indicators are you using a lot? And you changing settings or not?
Do you fund traders with their own strategy? I have one that shows up in the market every single day for large caps, but I need to be able to manage 50 lots minimum, or else there is no point.
Great Video thank you. Can you just confirm are you using the prior days ATR for calculations or an average of the ATR?
To calculate the daily atr correctly pick the last say 20 days. Add up the ATR for those 20 days and then divide that number by 20 and you’ll have the average daily ATR for the last 20 days. 😊
Could I get help understanding how at 20:20 price going from about $20 to $90 in five days represent 4.5 daily ATRs?
Hi Garrett I loved the video… especially the trailing stops wow that’s a game changer for me as this is one of my difficulties. I was wondering if you can help me with something though… I have to trade on IBKR and their ATR seems different to what you use. Are you familiar with IBKR ? And can you help me understand how to use their ATR so I can set it correctly? If at all possible please. I thank you in advance with whatever you can help me with ❤
i’m glad you got something out of it! sorry, but i don’t use IBKR so i can’t help you there, but i looked on their site and it appears they do have a traditional ATR indicator available
THE most important indicator along with EMAs to me.
Regarding stddev, it is based on gaussian normal distribution which rarely ever occurs in trading. Hence, no point in using it, and as a result Bollinger bands don't make sense.
ATR is great and all, but which periods do you use on which timeframes? Throwing up the stock ATR study gives you 14 period. Well that looks a lot different on a 1 minute chart versus a daily chart. How would one go about communicating with other traders, if they are talking about different periods of ATR? Assuming everyone on the desk is told to use a certain period, so this makes sense, but if you meet some random trader who uses ATR, you might use it completely different than them? Or am I missing something?
when speaking on the desk we’re always referring to daily ATR, our default period is 10 days - when using ATR for specific strategies then we can drill down to shorter timeframes and this becomes specific to the strategy you’re trading
the period does not make a huge difference
the timeframe makes a huge difference
Statisticaly, greater the number of periods you consider, greater is the validity of your measure of the volatility. Lets say if you want the mean volatility for one hour, better take 200 hours thant just 8. So there you can see that if you consider both, you have a comparison of recent volatility with long terme one. My hypothesis is that mesuring it over historical time gives you kind of «intrinsic» volatility of the stock, while the last datas gives you the effect of the addition of new informations. But of course, using the same parameters than the crowd is never a bad idea, whatever.
I use ATR relative to ADR to filter stocks for overnight hold
Can you give more details on how you use this with overnight holds? You present an interesting concept.
@@DustinHallen you can choose a long lens ATR and ADR settings. ADR is range without gaps. ATR is range with gaps. Divide one by the other. If smaller the difference, the smaller the probability of the gap over a chosen period.
@@helloworld6330 interesting! Thank you!
Would someone please explain to me and everyone who doesn't know what a day one move or a day 3 move is?
You mean ATR value changes with price of the stock depending on volatility. How ATR value is helpful for trading. Which ATR value is better- higher or low.
Probably a stupid question here, how/where do I find what is the daily ATR of a stock?
Great video, thank you ! How many bars do you set up the daily ATR ? and why?
for a lookback period for the average?
@@garrettdrinondo you use 14 period or 20?
@@garrettdrinon correct, some charting platforms will have 14, 20, 21 days per default, and as the daily ATR value is very important for this strategy as shown in the view, I was trying to find out what is the number that SMB uses as standard. Thank you again.
Thanks for the video - not sure I got the 4.5 ATRs in 5 days example
you’re measuring how many daily ranges a stock can trade from low to high in 5 days. 4.5-5 is alot for certain setups as it means it has traded higher an average daily range every day without pulling back on the daily timeframe
@@garrettdrinon "Ok, if I'm understanding correctly, a stock that moves 4.5 ATRs over a 5-day span generally signals a strong trend. I am guessing this is related to the concept of 'average true move,' where each leg of the stock's movement sets the stage for the next leg. In this video , where the stock topped and then reversed, if the prior 5-day leg saw the stock moving just 3 ATRs, then a subsequent 4.5 ATR move in the following 5-day leg could likely be considered an overextension, correct?"
@@garrettdrinon "Thanks for the explanation.If I'm understanding correctly, a stock that moves 4.5 ATRs over a 5-day span generally signals a strong trend. Is this linked to the concept of 'average true move,' where each leg of the stock's movement sets the stage for the next leg ? So for example where VFS topped and then reversed, although it's not visible on the chart, if the prior 5-day leg saw the stock moving just 3 ATRs, then a subsequent 4.5 ATR move in the following 5-day leg could likely be considered an overextension, correct?"
@@johnotaranNot necessarily. It’s a average meaning it can go above or below. If 3 is a average then you could bevgetting a 5 move and a 2 move that averages at 3 but doing 5 doesn’t mean it’s extended. That’s just normal but on average it’s 3 because sometimes it does 2 rather then 5. You can’t say something is strong just based on moving 5 ATR because ATR will be different on each stock. Just think of it as an average range the stock will move but it can go above or below the ATR number.
ballin
You must know your exit before you enter the trade in the first place
💪💛🍻
Great video, but I noticed his voice would go up and down in volume at times when he was finishing a sentence or point.
Thanks! and not sure if that was a varying distance of the mic as i moved around or not but will work on that
@@garrettdrinon Cool. And thank you for all the amazing vids.
I didn't really notice it. I wouldn't be to worried about changing anything. But that's my take on it.
Good ah-ha moment.
Use an ATR multiple on a LTF to set stop loss and targets, this will result in better profitability.
ATR I use custom is 21 & 1 with 7 & 14 sma
I came here to learn how to invest after listening to a guy on radio talk about the importance of investing and how he made $960,000 in 4 months from $160k, somehow this video has helped shed light on some things, but I'm still confused, I'm a newbie and I'm open to ideas.
The digital market turned out favorable! $60,000 every month. I can now give back to the locals in my community and also support God's work and the church, God bless America❤
So if you gonna watch the video, just skip the forst 10 min. I do t know why they do t realize, the time is precious and no need for ...whatever.
Where’s the inside day? Please explain. You’re trying to teach right? Don’t assume everyone knows inside day. Thanx
an inside day is when the daily candle range prints inside the range of the previous candle, in this case day 1 is earnings day, then an inside day, then a breakout
+++++
Why always talking stocks ? Trade Indices
11 x 70 IS NOT 360... (the comment that BRK is 70x the price of AMC). I hope the rest of this is more accurate than your math skills. 😬😆
i think for some cases ADR wud be a simpler tool achieveing the same objective :)