All traders can use the information on how much an instrument typically moves in a certain period for plotting either profit targets or stop losses, this indicator is designed specifically for placing stop losses with a stop loss level indication and it is best to use this indicator in conjunction with other indicators.
To calculate the average true range for a given symbol you need to do the following:
- Current high price minus the previous close price.
- Current low price minus the previous close price.
- Current high minus current low.
The result does not matter if it is negative or positive as it is the absolute value that is used with the final calculation by taking all these values from each period which is typically set at 14.
Current ATR = ((Prior ATR x 13) + Current TR)/14
How to Use This Indicator
This indicator should be used together with other indicators to help you set your take profit and stop-loss targets, you will need to manually adjust your stop loss each time the ATR level changes unless you use the cTrader ATR Trailing Stop cBot which will do this automatically for you.
How to Automatically Track The ATR
Your positions can have their stop loss automatically track the calculated ATR price by locking in profits and reducing your risk while you are away from your charts.
The following settings are available for this indicator.
- Show Info -this shows who created the indicator, set it to no to hide the information.
- MA Type - option to choose from 7-different types of moving averages.
- Period - ATR indicator period.
- Weight - ATR indicator weight.
- Use High & Low - change the calculation of the indicator to use the highest high and lowest low or the default calculations.
How To Install & Open Indicator's
First, make sure you have the cTrader trading platform installed and then simply unzip the file and double-click on it to automatically install onto the platform.
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* Manual trading only - source code not available.