ATR By Time [Chart]

May 5, 2020

What is ATR By Time (Chart)?

This premium indicator is a companion script to my ATR By Time indicator.

This companion script draws your stop loss price to the chart directly. In the above example, the black line represents a regular 1x ATR stop loss above and below price action, while the colored lines are the 1x ATR By Time indicator values when set to use the "Smallest ATR" in the settings menu.

When set to "Smallest ATR", the script calculates the regular ATR and the ATR By Time of Day and compares the distance of the two values. It then selects whichever value is smaller to be used as the stop loss, and adds or subtracts it to the most recent swing high or low (or the closing price if desired).

This allows for tighter stops and larger position sizing during certain times of day for aggressive traders when set to Smallest ATR, or wider stop losses during more volatile periods of the day for conservative traders when set to Largest ATR.

Stop Loss Distance Options:

- Regular ATR
- ATR By Time
- Smallest ATR
- Largest ATR

More Information

Similar to my RVOL By Time indicator, the ATR By Time indicator works on any market that has consistent trading session lengths. So it works best on Forex & Crypto, but also works on some Stock and Futures markets.

Instead of calculating the ATR based on recent price data like the regular ATR indicator, it calculates an ATR value for each candle based on that candle’s time of day.

For example, if you set the Lookback setting on this indicator to 14, then instead of calculating the ATR based on the past 14 candles, it will calculate an ATR value based on the past 14 trading sessions for each candle (as an average).

So in other words, your 10:00AM candle will show the average of the past 14 10:00AM candles rather than the past 14 candles leading up to that 10:00AM candle.

This is extremely useful for day traders in particular as it allows you to gauge the average range of candles during certain times of day instead of only by the most recent price action.

It also draws a regular ATR (optional) – so this is essentially an enhanced ATR script that gives you multiple readings on price volatility.

If you are interested in trying the script or you want more information on how the script works, there is more information available on my website including instructions on how to apply for a free trial: ATR By Time Feature Page.

Good luck with your trading!