This indicator is based on ATR ( average true range ). The weather emojis are signaling changes in volatility . It generates a signal by breaking the ATR line.
Average True Range (ATR) is the average of true ranges over the specified period. ATR measures volatility , taking into account any gaps in the price movement.
Calculation ATR = (Previous ATR * (n - 1) + TR ) / n Where: ATR = Average True Range n = number of periods or bars TR = True Range The True Range for today is the greatest of the following: Today's high minus today's low The absolute value of today's high minus yesterday's close The absolute value of today's low minus yesterday's close
💥 how to use :
🌈 - Long/Buy ⚡️ - Short/Sell green ▲- adjust leverage or long hold red ▼ - adjust leverage or short hold
Exit line - ATR trend line . can be used as an SL line.
💥Trading Strategy
This indicator is appropriate for swing or day traders. Timeframe recommendation: 1H or 4H
when 🌈 /⚡️ appears it's a first entry point for long/short. If ▲/▼ signal follows after 🌈 /⚡️ then hold your position until it shows the opposite signal.
However, since ATR is an indicator to find out trend changing points the signal might not be accurate on the "no trend" zone
In "NO TREND ZONE", you may stop trading by using this indicator and wait for the best signal or you may do the followings:
Try to use 21 EMA trend line - after the entry signal if the candle breaks the 21 EMA towards the opposite direction, close 50% of your position. DO NOT FORGET TO EXIT on an opposite signal to your position. - e.g. enter at 🌈 > exit at ⚡️
Try to avoid entering a new position in NO TREND ZONE and try to use other indicators (such as RSI , Stoch , ADX , KDJ..etc.) as well to get a better result.
TY