ATR Channels Forex Trading Strategy

Trading is an art that must be approached with caution and a sense of restraint when executing trades.

The ATR Channels forex trading strategy is designed to help traders execute trades with caution and great precision on all types of markets.

Learn below how to start using this versatile currency strategy:

Chart Setup

MetaTrader4 Indicators: AVQ_trend.ex4 (Inputs Variable Modified; Length=10), ATR Channels.ex4 (default setting)

Preferred Time Frame(s): 1-Minute, 5-Minute, 15-Minute, 30-Minute, 1-Hour, 4-Hour, 1-Day

Recommended Trading Sessions: Any

Currency Pairs: Any pair

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Buy Trade Example

Fig. 1.0

Strategy

Long Entry Rules

Initiate a buy entry if the following indicator or chart pattern gets displayed:

  1. If price closes above the middle magenta line of the ATR Channels custom indicator as seen on Fig. 1.0, price is said to be pushed higher i.e. a trigger to buy the designated currency pair.
  2. If the green bars of the AVQ_trend.ex4 custom indicator gets displayed on the candlesticks as seen on Fig. 1.0, price is said to be pressured to the upside i.e. a signal to buy the specified forex pair.

Stop Loss for Buy Entry: Place stop loss 3 pips below trading support.

Exit Strategy/Take Profit for Buy Entry

Exit or take profit if the following rules or conditions holds dominance:

  1. If while a buy signal is ongoing price closes below the middle magenta line of the ATR Channels custom indicator, it is a pointer denoting increasing bears in the market, hence an exit or take profit is recommended.
  2. If a red bar of the AVQ_trend.ex4 custom indicator is seen on the candlestick when a buy signal is ongoing (refer to Fig. 1.0), it is an indication of a possible reversal away from the current trend, an exit or take profit is advised.

Sell Entry Rules

Enter a sell order if the following holds precedence:

  1. If price closes below the middle magenta line of the ATR Channels custom indicator as depicted on Fig. 1.1, price is said to be pushed lower i.e. a signal to sell the currency pair of focus.
  2. If the red bars of the AVQ_trend.ex4 custom indicator gets displayed on the candlesticks as shown on Fig. 1.1, price is said to be pressured to the downside i.e. a signal to sell the specified FX pair.

Stop Loss for Sell Entry: Place stop loss 3 pips above trading resistance.

Exit Strategy/Take Profit for Sell Entry

Exit or take profit if the following takes center stage:

  1. If while a sell signal is running price closes above the middle magenta line of the ATR Channels custom indicator as shown on Fig. 1.1, it is pointing to more bulls in the market, hence an exit or take profit is recommended.
  2. If a green bar of the AVQ_trend.ex4 custom indicator is seen on the candlestick when a sell signal is running (refer to Fig. 1.1), it is an indication of a likely price reversal away from the current mood, an exit or take profit is recommended.

Sell Trade Example

Fig. 1.1

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About The Trading Indicators

The AVQ_Trend.ex4 custom indicator is a trend following indicator that paints the candlesticks green during a bullish trend and red during a bearish trend.

The ATR Channels.ex4 custom indicator on the other hand is an Average True Range Channels indicator that gauges the volatility of the market.

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