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>From notes taken from Mr. Michael Gur Dillon's workshop of Oct 97:
ATR uses the market's current volatility for stops. Add ATR + entry. Mr.
Dillon has done extensive work showing the effects on profit and loss by
using 1, 1.5, 2, and 2.5 ATR on varying futures markets. Mr. Dillon is the
author of the AccuTrend System and the Symmetry Wave System. His book
(don't they all write?) is "The Symmetry Wave Method".
The method he gave us was based on a 55 bar breakout with a 9 bar pivot
setup using a 2 ATR. At that point, (2ATR) the stop would be moved to
breakeven. Go back 10 days to get ATR (10) for re-entry if necessary or
one tick above previous high (if stopped out).
My notes and the printed illustrations are too numerous for me to type. I
write my notes poorly, but I also tape the workshop so that I can later
interpret what I have written.
>From Mr. Dillon's teaching, I have used the ATR (10) for day trading to
both determine when the High/Low of the day has perhaps occured and how far
I should expect price to move from that High/Low. For an example, if you
would create the formulas: Mov(C+(ATR(10)*.5),1,S) and
Mov(C-(ATR(10)*.5),1,S) then plot them over a daily price chart, you will
see that price very often will go to that point then make a daily reversal.
If price blows through either point, that is a strong move and a good
entry point. Very often, you will find that price will reverse at these
points and this will put you position to buy at or near the days Low or
Sell Short at or near the days High. Naturally, since this is computed on
yesterday's bar, this is a "projected" price. After trading is underway
after the opening hour range has been established, one can and should
re-calculate the anticipated ATR range for the current day.
Try this on the TBond contact and one could well be suprised how the 10/20
ATR for varying periods vary so little.
ATR and adaptive usuages have made a dramatic change in my trading and net
profit. To look upon it as a measure of volatility only is very
restrictive. I view it the same as a sign post on a highway: If I am
driving from my home town of Shreveport to Dallas, Tex (a distance of 189
miles), when I see the sign "Dallas 89 miles" I then know how far I have
traveled and, if I'm on the correct road, how much futhur I have to go to
reach Dallas.
Oops! Started typing and forgot to quit. Sorry for the length. Hope this
answered your questions, Debra and Adam.
Al Taglavore
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