Binomo offers numerous technical indicators and one such indicator is ATR. The full form of ATR is the Average True Range. You can use this indicator to identify the potential trends and reversals
Let’s understand What is the Average True Range and how you can use it to find the possible trends and reversals in the Binomo trading platform.
What is the Average True Range?
ATR or Average True Range is a technical analysis tool that is made from the moving average that oscillates around the zero line. When the moving average line is oscillating below the zero line it signals an upcoming bullish trend and conversely, When the moving average line is oscillating above the zero line it signals an upcoming bearish trend.
How to calculate the Average True Range?
ATR = (1/n) ∑TR over the ‘n’ period
Calculating ATR is very simple and easy. Firstly, you need to calculate the TR (True Range ) value of the security. True range values are calculated as the difference between the Absolute high and closing price plus the difference between the current low and the last close.
Secondly, determine the time period usually 14 days and lastly, plot the ATR indicator in the form of the moving average of the true range values over the determined period of time.
How to use Average True Range Indicator indicator on Binomo?
Finding and using the ATR indicator on Binomo is quite simple and easy. Just follow the steps given below.
Open Binomo account => Set the default chart to candlestick => Select your desired currency you want to trade => Click on the indicator button => Search for the ATR indicator in the list => Select the name => Configure the indicator as per your requirements => You can also change the time and colour of the indicator.
Average True Range Indicator Strategy: How to find buy and sell signals using the Average True Range Indicator on the Binomo
You can easily find high-quality buy and sell signals using the Average True Range Indicator. However, The two most popular ways of using this indicator are
Solo ATR: You can use this indicator solely on Binomo. This indicator is made from a single moving average line which oscillates around a zero line. When the moving average line intersects above line zero it signals a bullish trend and you can place a buy trade and the opposite when the moving average line intersects below line zero it signals a bearish trend and you can sell trade here.
Combined with trend indicator: If you really want the best results with the Average True Range indicator you should definitely consider the Average True Range indicator with other trend indicators like a Weighted moving average.
You can consider a buy signal when the ATR line intersects the above zero line plus the price intersects above the Weighted moving average line. Vice versa You can consider a sell signal when the ATR line intersects the below zero line plus the price intersects below the Weighted moving average line.
Note: Make sure to use a Weighted Moving Average with a shorter time frame like 15 to 20 while combining with the Average True Range.