ATR Trend (Volatility)

Average True Range (ATR) is the premier tool for measuring market volatility. It doesn't tell you the direction of the price, but rather the intensity of the movement.

How it Works in Safety Score

The EA uses a unique "Relative Volatility" logic. It compares the Current H1 Volatility against the Long-Term H4 Average.

• Decreasing Volatility (H1 < H4 Avg): The market is calming down. Safe for trading.
• Increasing Volatility (H1 > H4 Avg): The market is heating up. Danger of sudden spikes.

Formula

Current_ATR = ATR(Period=14) on H1 Chart
Baseline_ATR = Average of last 20 ATR(14) values on H4 Chart

Score Logic:
If Current_ATR < Baseline_ATR  →  +2 Score (Safe)
If Current_ATR > Baseline_ATR  →  -3 Score (Danger)

Recommended Settings

• Period: 14 (Standard). Lower (7) is too twitchy; Higher (21) is too slow.
• Lookback: 20 (H4 candles). This gives a ~3-day baseline of "Normal Volatility".

Q&A

Q: Why use ATR instead of just price change?
A: Price change hides the "chop". A market can move 0 pips net but swing 100 pips up and down. ATR captures that danger.

Q: How does this help Grid systems?
A: Grid systems die in expanding volatility. By detecting when H1 volatility exceeds the H4 average, we stop opening new grids before the explosion happens.