How to use the ATR indicator?

Since ATR is primarily a tool for measuring volatility, it cannot be used as a stand-alone tool for trading the market. You will use it in conjunction with your trading strategy to fine-tune your entry, stop loss placement, and profit target👇

The ATR indicator is not a trend indicator. Some traders are mistaken in believing that market trend and volatility are the same thing. But this is not true at all. Volatility may be low while the trend continues to move. Market volatility is always changing. Periods of low volatility alternate with periods of high volatility. And vice versa. Therefore, we can expect that if the market is in a state of low volatility for a long time, this period may change to high volatility.

🤔How can we determine the moments when the price may break out of a level?

We wait until volatility approaches its minimum values on the weekly timeframe. We find consolidation in this period. We trade for a level breakdown.