ATR Scaling Indicator
ATR Scaling Indicator
- Objective - Use for entry point
- Description - ATR Scaling is the introduction of Average True Range to scaling it into 1 Standard diviation. Since the average Ture Range in general has a wide distribution of data, we need to scaling the data to reduce fragmentation.
- Applications - The principle of ATR Scaling is to use it as an entry point when the value of the Scaling ATR crosses above the lower band of the Bolinger Band.
- Recommendation - The fact that ATR Scaling has crossed above the lower band is not indicative of a trend in the market. ATR Scaling should be used in conjunction with indicators used to filter trend, for example Supertrend, Exponancial Moving Average.