ATR strategy nets 289 points on Dow Jones this past week using the 180 minute chart. Although the Dow Jones has not been moving as much as it typically does, price has been bouncing off the ATR on the 180 minute chart for the last week.
ATR Strategy Nets 289 on Dow Using ATR for Entry
The chart below shows the four trades, with date of entry, that have completed within the last week on the Dow Jones. There have been five trades but one is still in progress. The four completed trades were:[sociallocker]
- Entry on 3/2/16 nets 93 points
- Entry on 3/3/16 nets 86 points
- Entry on 3/7/16 nets 63 points
- Entry on 3/8/16 nets 47 points
- Latest entry is up about 50 points so far
Why enter at the ATR? The ATR strategy enters at the ATR because it is the lowest point of risk. While others may wait for a breakout at the ATR, this only serves to increase risk and does not increase winning percentages. So why waste money on losing trades when you can trade into a higher timeframe, with an entry that is guaranteed to lower your risk. In other words, if you are wrong, you will be wrong very quickly instead of suffering.[/sociallocker]
Of course if you can lower your risk then losses or much easier to overcome. The larger the loss the harder it is to overcome with profitable trades.
And, it’s been somewhat of a tough week because instead of moving the typical 246 points per day, the Dow has only been moving about 150 points per day for the last week (really low volatility prior to the Fed Rate Announcements set for next week). Being able to capture half of that in a simple ATR strategy is really cool.
The ATR Strategy is based on the TradersHelpDesk Trend ATR indicator for TradeStation, NinjaTrader and Multicharts.