Calculate the TP using ATR | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

Using RR to calculate expectancy 0 replies

Correct number of weeks for ATR and hour ATR 1 reply

Calculate ATR for specified time period 0 replies

ATR using O/Close 4 replies

Creating bands using ATR 11 replies

Attachments: Calculate the TP using ATR
Exit Attachments

Calculate the TP using ATR

  • #1
  • First Post: Aug 28, 2015 9:35pm Aug 28, 2015 9:35pm
Hi there
Long story short. I have been reading an article describing a(nother) trading strategy where ATR is used to set the SL and TP. While the SL part is clear for me, the TP is something I'm not sure I understood.
The author writes that the take profit is calculated by this formula: (ATR Value*3 + Trade open price)
Now I understand (please correct me if I'm wrong) that the ATR works a little like this:
Example: ATR = 0.00222 (when you open the trade) so TP would be 666+trade open price. My question is: What is the trade open price? Is it the currency value, the price on the chart?
It's a little confusing because on some pairs is less than 1 (UsdChf 0.96) - so it won't matter much when he ads it to the ATRx3, while on others is more than 100 (UsdJpy 121.7).
This formula is from here.
Using the RobotFX EAs for a while https://www.robotfx.org/
  • #2
  • Aug 28, 2015 10:50pm Aug 28, 2015 10:50pm
Hi Wattaman! What traders usually do when they are using Average true range, is for setting stop loss, that they have the ATR indicator plotted on the chart to begin with,
then you see a number, what they do is they take that number x3 to get their stop loss. based from the entry point. I never heard of using atr as targets, I think you must mean ADR average daily range? it is the range of today that price is supposed to go. setting targets based on atr would be too tiny in my opinion.

I'm not sure either what that author means, but I think he means the opening price of the setup candle above or below the ma?
thats my best guess
Bulls are stupid Animals!especially when Im short!
  • #3
  • Aug 28, 2015 11:00pm Aug 28, 2015 11:00pm
Here it is :
We will use ATR value to set our take-profit and stop-loss level.
Stop Loss level:
(ATR Value*1.5 + Trade open price) + 10 PIPS = ATR + open price of candle that closed above/below, example 1.12978, + 10 pips
Take Profit Level:
(ATR Value*3 + Trade open price)
Manual exit of trade :
- For Buy Entry : If Candle closes below yellow
moving average.
- For Sell Entry : If candle closes above blue
moving average.

to simplify it, you would begin with the opening price off the setup candle,
then add ATR and 10 pips
Bulls are stupid Animals!especially when Im short!
  • #4
  • Aug 28, 2015 11:09pm Aug 28, 2015 11:09pm
Quoting roughtrader
Hi Wattaman! What traders usually do when they are using Average true range, is for setting stop loss, that they have the ATR indicator plotted on the chart to begin with, then you see a number, what they do is they take that number x3 to get their stop loss. based from the entry point. I never heard of using atr as targets, I think you must mean ADR average daily range? it is the range of today that price is supposed to go. setting targets based on atr would be too tiny in my opinion. I'm not sure either what that author means, but I think he means...
Thank you, Roughtrader. I knew about the SL. Some are using ATRx2, others ATRx3 etc.
Looks like the TP will remain a mystery, at least the + trade open price part. Adding 0.96 to the TP will not make much of a difference, but adding 121 will do, especially on the lower timeframes. He writes only about ATR, not ADR.
I'd open an account at Dukascopy just to ask this guy about it, but I saw others asked in comments and he didn't replied.
Anyway, curiosity is killing me, so... time to browse the net.... again
Using the RobotFX EAs for a while https://www.robotfx.org/
  • #5
  • Edited 8:39am Aug 29, 2015 8:27am | Edited 8:39am
Quoting wattaman
Hi there Long story short. I have been reading an article describing a(nother) trading strategy where ATR is used to set the SL and TP. While the SL part is clear for me, the TP is something I'm not sure I understood. The author writes that the take profit is calculated by this formula: (ATR Value*3 + Trade open price) Now I understand (please correct me if I'm wrong) that the ATR works a little like this: Example: ATR = 0.00222 (when you open the trade) so TP would be 666+trade open price. My question is: What is the trade open price? Is it the...
Use the indicator attached to make it easier. It will give ATR in pips for any pair.
"Trade Open Price" is entry price.
The example in the chart would be if you went long and used SL=Entry Price-ATR and TP=Entry Price+(ATRx3).

***ADR is the same as ATR except that it refers to "DAILY" range only. ATR is referring to the timeframe you're using.
Just like 50 PERIOD moving average is the same as 50 DAY moving average except that day MA refers to "DAILY" timeframe.
Attached Image (click to enlarge)
Click to Enlarge Name: USDCHFDaily.png Size: 34 KB
Attached File(s)
File Type: ex4 ATR in Pips.ex4   3 KB | 3,891 downloads
  • #6
  • Aug 29, 2015 1:24pm Aug 29, 2015 1:24pm
Quoting wattaman
{quote} Thank you, Roughtrader. I knew about the SL. Some are using ATRx2, others ATRx3 etc. Looks like the TP will remain a mystery, at least the + trade open price part. Adding 0.96 to the TP will not make much of a difference, but adding 121 will do, especially on the lower timeframes. He writes only about ATR, not ADR. I'd open an account at Dukascopy just to ask this guy about it, but I saw others asked in comments and he didn't replied. Anyway,...
got you, but there is only one opening price that makes any sense and that is the open of the setup candle.
I really don't think he is talking about the daily open, that would be way to large, but who knows?
maybe you could experiment and see which one works best?
Bulls are stupid Animals!especially when Im short!
  • #7
  • Aug 29, 2015 1:25pm Aug 29, 2015 1:25pm
Quoting srt
{quote} Use the indicator attached to make it easier.
Thanks for sharing Srt
Bulls are stupid Animals!especially when Im short!
  • #8
  • Aug 29, 2015 10:04pm Aug 29, 2015 10:04pm
Quoting srt
{quote} Use the indicator attached to make it easier. It will give ATR in pips for any pair. "Trade Open Price" is entry price. The example in the chart would be if you went long and used SL=Entry Price-ATR and TP=Entry Price+(ATRx3). ***ADR is the same as ATR except that it refers to "DAILY" range only. ATR is referring to the timeframe you're using. Just like 50 PERIOD moving average is the same as 50 DAY moving average except that day MA refers to "DAILY" timeframe. {file} {image}
Thanks for the indi and the explanation, Srt. You see, I was thinking 106*3+0.9625 - that didn't make much sense, since + or - 0.96 would be almost the same. Now I see it. And I suppose it is subtraction for sell
0.9625+
___318
0.9943
Using the RobotFX EAs for a while https://www.robotfx.org/
  • #9
  • Jan 6, 2016 4:11pm Jan 6, 2016 4:11pm
Quoting wattaman
My question is: What is the trade open price?
Hope this photo helps you find where to look for the open price.
Attached Image (click to enlarge)
Click to Enlarge Name: 1000px-Candlestick_chart_scheme_01-en.svg.png Size: 36 KB

More on candles
https://en.wikipedia.org/wiki/Candlestick_chart

Once you figure out what the ATR is on the time frame you like to trade, 1.5*ATR for SL and 3*ATR for TL. That's 1:2 risk : reward ratio which is pretty standard and reasonable.

I use ART a bit different. I'd like to think it's a bit more advanced way in terms of telling me when to flat the position, but this is not what we are discussing here.

Hope this help. Good luck.
If u luv happiness, start w/ discomfort, make friends w/ pain and failure.
100 Hits 0 Miss All Time Return: 35.8%
  • #10
  • Jan 7, 2016 5:31pm Jan 7, 2016 5:31pm
Quoting FXSayWhat
I use ART a bit different. I'd like to think it's a bit more advanced way in terms of telling me when to flat the position, but this is not what we are discussing here. Hope this help. Good luck.
Thanks for those who showed interest in this subject. I received couple message on how I do it.

Sorry, For now I am NOT planning to thoroughly explain it due to my busy schedule while already have handful of threads need to update and follow up. I won't put a thread up when i am not able to follow up with it.

In general, as a hint, I'd suggest you use ATR as some sort of position progress tracker. Use it to measure how effective your position is in terms of how much profit it generated in any given time. That's all for now till I have the time to bring it up with charts and pictures for detail explanation.

Cheers and good trading, guys.
If u luv happiness, start w/ discomfort, make friends w/ pain and failure.
100 Hits 0 Miss All Time Return: 35.8%
  • #11
  • Feb 3, 2016 2:57pm Feb 3, 2016 2:57pm
Quoting wattaman
Hi there Long story short. I have been reading an article describing a(nother) trading strategy where ATR is used to set the SL and TP. While the SL part is clear for me, the TP is something I'm not sure I understood. The author writes that the take profit is calculated by this formula: (ATR Value*3 + Trade open price) Now I understand (please correct me if I'm wrong) that the ATR works a little like this: Example: ATR = 0.00222 (when you open the trade) so TP would be 666+trade open price. My question is: What is the trade open price? Is it the...
The trade open price is the price that your trade opens at? If you want to take profit at 3ATR you add or subtract, depending on whether you're buying or selling, the value of 3ATR to your open price. Don't really understand what the problem is??
  • #12
  • Mar 6, 2016 9:35am Mar 6, 2016 9:35am
Is there an indicator that will do the above with the ATR? I downloaded one indicator, but it draws all lines above the price.....TP & SL !!
  • #13
  • Mar 23, 2017 10:48pm Mar 23, 2017 10:48pm
Quoting springer
Is there an indicator that will do the above with the ATR? I downloaded one indicator, but it draws all lines above the price.....TP & SL !!
No indicator that I know of, but with a bit of fiddling you can use the Fibonacci Tool to do the work for you and draw the line as well

Good luck, John
It takes a lot for me to IGNORE you, but you can try.
  • #14
  • Mar 24, 2017 8:17am Mar 24, 2017 8:17am
thank you so much friend.
All the best. More so thank you for your contribution here.
  • #15
  • Apr 20, 2017 11:42am Apr 20, 2017 11:42am
Well, I don’t have any particular trading tool for my SL and TP! I always use my TP ad SL in order to the position of support and resistant area! It’s true, I am not interested on low profit ratio like 1:1 1:1.5! Because, I know the importance of quality trading! I seem, support and resistant levels are too secure in this case!
  • #16
  • Feb 6, 2019 4:57am Feb 6, 2019 4:57am
Hi

Does anyone have an indicator that will work out what the stop loss and take profit would be based on the ATR. In the indicator settings, I would like to be able to define the ATR factor for both TP and SL so for example I may want my TP to be 3 X ATR and the SL to be 1.5 X ATR
  • #17
  • Feb 6, 2019 7:01am Feb 6, 2019 7:01am
Quoting leigheds
Hi Does anyone have an indicator that will work out what the stop loss and take profit would be based on the ATR. In the indicator settings, I would like to be able to define the ATR factor for both TP and SL so for example I may want my TP to be 3 X ATR and the SL to be 1.5 X ATR
I would use the FIB Tool

assuming the use of Metatrader
It takes a lot for me to IGNORE you, but you can try.
  • #18
  • Last Post: Feb 6, 2019 7:05am Feb 6, 2019 7:05am
Yes, I'm using MT4.
How would I use the FIB tool, I'm not familiar with that method of working out TP and SL?
0 traders viewing now