When to look for a buy signal on the ATR?
Look for a buy signal based on your strategy. You should review historical ATR readings as well. Even though the stock may be trading beyond the current ATR, based on history, the movement may be quite normal. If you’re using the ATR on an intraday chart, such as a one- or five-minute, the ATR will spike higher right after the market opens.
Why does the average true range ( ATR ) move up?
For stocks, when the major U.S. exchanges open at 9:30 a.m. ET, the ATR moves up during the first minute. That’s because the open is the most volatile time of day, and the ATR simply indicates that volatility is higher than it was at yesterday’s close.
What does the high low range in Renko mean?
The high-low range puts two data points into play and increases the fluctuations, which results in added bricks. The examples below show Renko charts for the S&P 500 and the box size is set at 10-points for both. The first chart is based on closing prices and the second is based on the high-low range.
For stocks, when the major U.S. exchanges open at 9:30 a.m. ET, the ATR moves up during the first minute. That’s because the open is the most volatile time of day, and the ATR simply indicates that volatility is higher than it was at yesterday’s close.
Look for a buy signal based on your strategy. You should review historical ATR readings as well. Even though the stock may be trading beyond the current ATR, based on history, the movement may be quite normal. If you’re using the ATR on an intraday chart, such as a one- or five-minute, the ATR will spike higher right after the market opens.
What are the different types of Aroon indicators?
There are two separate indicators: Aroon-Up and Aroon-Down. A 25-day Aroon-Up measures the number of days since a 25-day high. A 25-day Aroon-Down measures the number of days since a 25-day low. In this sense, the Aroon indicators are quite different from typical momentum oscillators, which focus on price relative to time.
When does Aroon show an uptrend signal?
For an uptrend signal, the first stage occurs when Aroon-Up moves above Aroon-Down. This shows new highs becoming more recent than new lows. Keep in mind that Aroon measures the time elapsed, not the price. The second stage is when Aroon-Up moves above 50 and Aroon-Down moves below 50.