ATR Breakout Entries by Ken Calhoun
How do you know when a breakout is truly a breakout? The more confirming indicators you have, the better. Here are two indicators you can use to identify true breakouts, and if you have even more confirming signals, there’s a strong chance you’ll make profitable trades.
You can find strong swing trading breakouts by combining J. Welles Wilder’s average true range (ATR) with simple moving average (MA) crossovers. When you visually scan for new breakout entries, you should seek to trade charts that have both of these technical trade signals occurring right before you enter the position.
The ATR increases when the high/low daily ranges increase over time, using a standard 14-step parameter. This indicator helps you find stocks with larger trading ranges, which are found when institutional buying is on the rise...