Random thoughts on low ATR breakouts

Excuse the half-formed ideas, just playing around with something and want some feedback.

Right from when I started trading forex, one of the things I learned was trends don't usually start from opposite trends, they start from periods of low volatility.

With this in mind, I looked at the ATR(14) on the 30mins and hour charts. Can I take a low ATR value as an indication that a new trend/breakout is looming?

Here's what I have in mind:
when the ATR dips below a certain level, place entry orders at the recent (10-14 bars back) high and low. When the price goes through one, the trade is taken. s/l is at the other entry level.
Exits (always the most difficult part) are a trailing stop of 50% of profit (first calculated after an acceptable amount of profit, say 25 pips).

My ideal indicator is not actually the ATR but one which looks at each of the previous 14 bars, if none of these bars has a range greater than 15 pips, indicate it on the chart. You're primed for a potential big move. These numbers are for GBP/USD.

I'm sure this has been discussed before, not sure where though.

Thoughts, sneers, tweaks all welcome.

Here are two charts to make it clearer. I'm off to bed.

http://picnac.com/images/7623Untitled 4.jpg


http://picnac.com/images/9775Untitled 3.jpg

i like the shankly quote in your sig. as a follower of lfc i might take up golf after theglorious win over barcelona yesterday... bellamy cracks me up.

i guess your method is similar to 'box breakout' or 'volatility breakout' methods that have been discussed around the FF.

i use atr to inform my exits at times, not by itself of course...

There is a way to use atr for breakouts
Remember we are doing VOLATILITY breakouts and not PRICE breakouts

2 very similar concepts but at least in my POV, two sides of the same coin, same style different execution.

I know this thread has been ages but not too many discretionary traders trade the Volatility breakout cuz it's boring and not alluring enough for their taste / passion. But i digress..

So Price Breakouts are the general breakouts we all learn from Gurus and internet forums, the change in price that made the bollinger's bands to expand / compress are Price Breakouts, they(bb) can also be used as a Volatility Breakout, as such:
Take you atr and then bollinger band your atr (the SMA data of your BB uses the ATR data instead of price data) and when your ATR breaks-out from the BB bands that is a volatility breakout.

If you are reading this, use it as a Volume/Volatility Indicator,

To trade/not trade || enter/exit when high volatility (atr > upper bb)
To trade/not trade || enter/exit when low volatility (atr < lower bb)

To trade/not trade || enter/exit AFTER high volatility (atr crossUNDER UPPER bb)
To trade/not trade || enter/exit when AFTER low volatility (atr crossOVER LOWER bb)

The latter examples are almost identical to the Williams VIX Fix, Basically a Synthetic VIX.

Edit: Oh and if you are reading this hit me up, let's talk about systematic trading and stuffs. I'll reply