Study Guides
Study Guide: ATR

Using the ATR Trailing Stop for further “Hint” of direction:

-      ATR Trailing Stop is simply a calculation, using the stock's Average True Range.

-      Average True Range is the average stock price fluctuations within a certain time period.

-      Chris uses the ATR Trailing Stop crossover as a visual indication for possible direction changes.

-      ATR Stop crossovers usually coincide with moving average crosses.

Chris uses a 2.9 ATR with 9 periods with EXPONENTIAL for his ATR trailing Stop in Thinkorswim.

The ATR Trailing Stop will change color from Red to Green depending on if the price is above which will display a green line or below it which will display a red line. 

Chris's TOS settings