Trading Gold using the ATR entry strategy resulted in a total of nine entries, six of which were winning trades. Out of the nine entries, three were losers and six were winners. They were a combination of longs an shorts. Filtering with the 180 minute chart would decrease the losses by one trade.
Each trade shown on the chart above was generated using the entry at the THD proprietary ATR stop (+ sign). Two of the losses did not have diverging volume, which we use as a filter on entry provided you have studied volume analysis and divergence. One of the winners did not have diverging volume on entry but diverging volume did come in 3 bars later, which also gave a better entry into the first positive short trade.
Trading Gold Using the ATR Entry Strategy – Entries and Exits
The chart below shows the entry and exits for trading Gold using the ATR entry strategy. The results for the strategy was a profit of 7.7 points or 77 ticks o $770 total based on trading just one contract for each trade.
These are the same entries that I use everyday. Price is at an ATR that is going into a higher timeframe. In this case, the trades are going into the 180 minute chart. Initially, the 180 is at a Congestion Dot, then breaks thru the Congestion Dot and retraces back to the ATR. This pattern repeats over and over again.
- The ATR on the lower timeframe is where we look for the support or resistance.
- Volume divergence should appear as price approaches the ATR stop.
We use the ADX to identify when price is most likely to pullback to the ATR. Fairly simplistic methodology but one that has been proven to work time and time again.
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